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| {{#Wiki_filter:UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) 0K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1999 OR 0 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Registrant, State of Incorporation, IRS EmployerNo. | | {{#Wiki_filter:}} |
| Identification Commission File Number Address of Princlpal Executive Offices and Telephone Number 72-1229752 1-11299 ENTERGY CORPORATION (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000 ENTERGY ARKANSAS, INC. 71-0005900 1-10764 (an Arkansas corporation) 425 West Capitol Avenue, 40th Floor Little Rock, Arkansas 72201 Telephone (501) 377-4000 ENTERGY GULF STATES, INC. 74-0662730 1-2703 (a Texas corporation) 350 Pine Street Beaumont, Texas 77701 Telephone (409) 838-6631 72-0245590 1-8474 ENTERGY LOUISIANA, INC.
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| (a Louisiana corporation) 4809 Jefferson Highway Jefferson, Louisiana 70121 Telephone (504) 840-2734 ENTERGY MISSISSIPPI, INC. 64-0205830 0-320 (a Mississippi corporation) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 368-5000 0-5807 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)
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| Echelon One 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000
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| Securities registered pursuant to Section 12(b) of the Act:;
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| Name of Each Exchange on Which Registeredl SrTitle of Class Common Stock, $Q0,01 Par Value - 236, 145,752 New York Stock Exchange, Inc.
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| Entergy Corporation shares outstanding at Febnipry 29, 20,00 Chicago Stock Exchange Inc.
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| Pacific Exchange Inc.
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| 8-1/2% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
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| Entergy Arkansas Capital I Securities,, Series A Entegy Gulf States, Inc. Preferred Stock, Cumuative, $100 Par Value.
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| $4.40 Divid Series Newyork Stock Exchange, Inc.
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| New York Stock Bxchange, Inc.
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| $4.52 Dividend Series New York Stock Exchange, Inc.
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| $5.08 Dividend Series Adjustable Rate Series B (Depository Receipts) New York Stock Exchange, Inc.
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| Preference Stock, Cumulative, without Par Value New York Stock-Exchange, Inc.
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| $1.75 Dividend Series 8.75% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
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| Entergy Gulf States Capital I Securities, Series A Entergy Louisiana Capital I 9% Cumulative Quarterly Income Preferred New York Stock Exchange, Inc.
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| Securities, Series A Securities registered pursuant to Section 12(g) of the Act:
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| Registr Title of Class Preferred Stock, Cumulative, $100 Par Value Entergy Arkansas, Inc.
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| Preferred Stock, Cumulative, $0.01 Par Value Preferred Stock, Cumulative, $100 Par Value Entergy Gulf States, Inc.
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| Entergy Louisiana, Inc. Preferred Stock, Cumulative, $100 Par Value Preferred Stock, Cumulative, $25 Par Value Preferred Stock, Cumulative, $100 Par Value Entergy Mississippi, Inc.
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| Preferred Stock, Cumulative, $100 Par Value Entergy New Orleans, Inc.
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| 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 check 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 III of this Form 10-K or any amendment to this Form 10-K. []
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| 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 directly or indirectly the sole holder of the common stock of Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Resources, Inc.
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| 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 I and Il hereof.
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| TABLE OF CONTENTS Page Number Definitions 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 I Item 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 LU Item 10. Directors and Executive Officers of the 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 IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 211 212 Signatures Report of Independent Accountants on Financial Statement Schedules 220 S-1 Index to Financial Statement Schedules Exhibit Index E-1 This combined Form 10-K is separately filed by Entergy Corporation, Entergy Arkansas, Inc.,
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| 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.
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| This report should be read in its entirety. No one section of the report deals with all aspects of the subject matter.
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| FORWARD LOOKING INFORMATION Investors are cautioned that forward-looking statements contained herein with respect to the revenues, earnings, competitive performance, 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.
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| DEFINITIONS Certain abbreviations or acronyms used in the text and notes are defined below:
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| Abbreviation or Acronym Term
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| /t t AFUDC Allowance for Funds Used&During Construction Algiers 15th Ward ofthe City ofNew Orleang, Louisiana ALJ Administrative Law Judge ANO 1 and 2 Units 1 and 2 of Arkansas Nuclear One Steam Electric Generating Station (nuclear), owned by Enteigy Amsas".
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| APB Accounting Principles Board, APSC Arkansas Public Service Cdinmissio' Availability Agreement Agreement, dated as of June 21, 1974, as amended, among System Energy and Entergy Arkansas, Entergy Louisiana, Fntergy Mississippi, and Entergy New Orleans, and the assignrm ts thereof, '
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| Board Board of Directors of Entergy Corporation Boston Edison Bostoh Edison Companyt.
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| BPS '- British pounds sterling Cajun Cajun Electric Power- Cooperative,, Inc. :(<urrently in Chapter 11 bankruptcy reorganization) ,
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| Capital Funds Agreement Agreement, dated as-of June.21,;1974,. as amended, between System Energy and Entegy Cozporationý and the hs signments 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 3 1, 1998 Council Council of the City of New Orleans, LOuisiana DXC.,,Circuit United StatesCourt of Appeals afor theDistrict of Columbia Circuit
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| 'DOE .. United States DepartmeitofEnergy domestic utility companies Entergy Arkansas,. Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, anctEntergy New Orleans, coilectively EITF Emerging Issues Task Force:
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| EMF Electromagnetic fields ENHC EntetgyNuclear Holding Company .
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| EPA Environmental Protection Agency EPAct Energy Policy Actofr 19921 EPDC Entergy Power Development Corporation, EPMC Entergy Power Marketing Corporation Enteigy Trading and.Marketing, Ld ETHC Entergy Technology Holding Company*.
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| EWG Exempt wholesale generator. under PUHCA Enterg Entergy Corporation and its various direct and indirect subsidiaries Entergy Arkansas Entergy Arkansasi4nc, .
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| E. eg Corporation Entergy Corporation, a Delaware corporation
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| -EidtergyGulf States . Entergy lff "States; Inc., including its:wholly owned subsidiaries - Varibus Corporation, GSG&T, Inc., Prudential Oil & Gas, Inc., and Southern Gulf Railway Company i
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| DEFINITIONS (Continued)
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| Abbreviation or Acronym Term Entergy London Entergy London Investments plc, formerly Entergy Power UK plc (including its wholly owned subsidiary, London Electricity ple), which was sold by Entergy effective December 4, 1998 Entergy Louisiana Entergy Louisiana, Inc.
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| Entergy Mississippi Entergy Mississippi, Inc.
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| Entergy New Orleans Entergy New Orleans, Inc.
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| Entergy Nuclear Entergy Nuclear, Inc.
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| Entergy Operations Entergy Operations; Inc..
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| Entergy Power Entergy Power, Inc.
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| Entergy Services Entergy Services, Inc.
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| FASB Financial Accounting Standards Board FERC Federal Energy Regulatory Commission FUCO an exempt foreign utility company under PUHCA Grand Gulf 1 and 2 Units 1 and 2 of Grand Gulf Steam Electric Generating Station (nuclear), 90%
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| 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 *.:, ..
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| Internal.Revenue Service...
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| KV
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| * kilovolt-. . :... ...
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| KW kilowatt KWH kilowatt-hour(s)
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| London Electricity London Electricity plc - a regional electric company serving London, England, which was acquired by Entergy London effcxtive February 1, 1997, and was sold by Entergy effectivi December 4,4998 LDEQ Louisiana Department of Environmental Quality LPSC Louisiana Public Service Commission MCF 1,000 cubic feet of gas Merger The combination transaction,, consummated on December 31, 1993, by which Entergy Gulf States became a subsidiary of Entergy Corporation MPSC Mississippi Public Service Commission MW Megawatt(s)
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| N/A Not applicable Nelson Unit 6 Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, owned:70% by Entergy Gulf States- . i.
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| NISCO Nelson Industrial SteamCompany 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 for remediation of environmental contamination)
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| PUCT Public Utility Commission of Texas PUHCA Public Utility Holding Company Act of 1935, as amended ii
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| DEFINITIONS (Concluded)
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| 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)
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| River Bend River Bend Steam Electric Generating Station (nuclear)
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| 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.
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| System Fuels System Fuels, Inc.
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| 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%
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| owned or leased by Entergy Louisiana White Bluff White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas iii
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| PART I
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| :Item 1. Business BUSINESS OF ENTERGY General Entergy Corporation is a Delaware corporation which, through its subsidiaries, engages poruipallyjn the development, and following businesses: domestic utility operations, power marketing and trading, global power its subsidiaries. Entergy domestic nont-utility, nuclear operations. It has no significant assets other than the.stock of, Corporation.,and its Crplation- is a.registered public utility holding company under PUIHCA. ,As suck, Entergy subsi$1aries generally are subject to the broad regulatory provisions.of PUHCA. PUHCA g..erakly lits registered holdingt 1compa.y; activity to. domestic, integrated utility businesses, domestc and foregn electc
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| ,pub.ie utility and, certain and information service businesses, genertion ventures, foregp .utilityownership, te*ecormmunications operating s*aments
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| .other 'domestitc gergy related businesses-, Financial information regarding Entergy, Corporatioon's Siscontained in Note*1,4 to the financial statements.
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| Domestic Utility Oneratio s.
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| Entergy Corporation has five wholly-owned domestic retail electric utility subsidiaries: Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. As oflDecember 31j: 1999, of customers primarily in portions these utility companies provided retail electric service to approximately 2.5 million natural gas States. furnishes
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| ,the states of Arkansas, Louisiana, Misssippi,.and Texas. In addition,. Entergy -Gulf gas utility..riwice utility,.service in and around BoonnRouge,,losiana, and Entergy New Orleans furnishes natural to&seaonal fluctuations, with in New Orleans, Louisiana. The business of..the domestic utility compan'es.is subject the domestic utility the peak sales period normally occurring during the third quarter of each year.. During 1999,- 27.8%; commercial companies' combined retail elktfic sales ai ai.percentage of total electric sales were, residential electric
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| - 21.6%; an*ii4dstrial - 39.5%. Retail electric revenues from thesp setors as a. percentage of total and revenues were: residential - 35.6%; commercial - 24.0%; and industrial -. 30.0%.. Sales to governmental municipal sqr.s and to nonaffiliated utilities are accounted for the balance of energy sales. The major industrial the chemical, petroleum refining,- paper,. and food products industries. Tfrr.tilrates and services of Entergy'sindomestic customers of the domestic utility companies retail utility subsidiaries are regulated by state and/or local regul*.ry autlhoities.
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| corporation that Entergy Corporation also owns 100% of the voting stock of System Energy, an Arkansas capacity rnd System Energy sells all of the energywand owns an ;aggegate leaIes intbrest f~oIýits iii Grand undivided 90%Gulf1 ir .,rest at who1eale its oiilyGulf.
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| to Grand in customers, ,ntergy Airkansa, Entergy Louisiana, EntergyMisgissipi, and Entergy New Orlean.: Management discusses sales from GrandGulf 1 more thoroughly in Financial ýand Supnort
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| "-CAPITAL 9REQUIRUq MtENTS AND FUTURE FINANCING: - Certain SVstem Agree it -Jil Power' Sales Agreement' below. System Energy's ivholesale power sales are subjf to the Unit jurisdictiirofFER .
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| .'-Entergy"Services, a Delaware corporation ",holly-owned by Entergy Corporation, provides management, subsidiaries of "ad'"inistrativie, accountin, legal, engineering, and other services primarily to the domestic utility Corporation "Eritergy Corpbtitidn. E"terg'y Operations,. a Delaware corporation, s: also wholly-owned by Enteigy
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| -ah jovidem nucleart manag6iet, operations and maintenance services under contact for ANO, River.Bend, Eittergy Waterford 3, and Grand Gulf 1, subject to the owner oversight of Entergy Arkansas, Entergy Gulf States, Entergy Mississippi, and Louisiana, and System Energy, respectively. Entergy Arkansas, Entergy Louisiana, of System Fuels, a Entergy New' Orleans own 35%, 33%, 19%, and 130/6, respectively, of the common stock for
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| " Louisiana corporation that implements and manages certain progrnams to procure, deliver, and store fuel'supplies those companies. Entergy Services, Entergy Operations, and System Fuels provide their services to the domestic approved by the SEC utility companies and System Energy on an "at cost" basis, pursuant to service agreements under PUHCA. Information regarding affiliate transactions is contained in Note 13 to the financial statements.
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| Entergy Gulf States has wholly-owned subsidiaris 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, whfich 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.
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| Power Marketine and Trading Eittergy conducts its power~marketing and trading business primarily through three subsidiaries, Entergy PoWeri,,EPMC, and ET&M. -:Entergy Power is a domestic power producer that owns 665 MW of fossil-fueled
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| :generation assets located mn Arkansas. Entergy Power's capacity and energy is sold at wholesale principally to
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| .,-EPMO.and -Entergy Arkansas. Entergy Power's wholesale power sales are subject to the jurisdiction of FERC.
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| EPMC engages in the marketing and trading of physical and financial energy commodity products; industrial energy matiagement, and risk management" services. It has authority, from the SEC to &W in. a wide range of energy commodities and related financial products. ET&M is engaged in the marketing and trading of physical 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 will be called Entergy Wholesale Operations.
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| Global Power Development Entergy"s global power developmentbusiness is focused on.,icqUiring or: developing power generation projects in North-America and Western Europe and will evaluatepotential opportunities in Latin America. This business owns interests in the..folowing foreign electric generationasets:
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| Investment Percent wrship Status Argentina - Costanera, 1,260 MW 6% operational Argentina -Costanera-iepansion, 220 MW 10% operational "Chile- San Isidiro, 375 MW 25% operational Pakistan - Hub-River, 1,200 MW -5% . operational Peru - Edegel - 83 MW 24% operational United Kingdom - Saltend, 1,200 MW 100% under construction United Kingdom - Damhead Creek, 800 MW 100% under construction Entergy's global power deyelopment business has several other development, projects in the planning stages, imcluding projects in Texas, Louuisiana, Mississippi, Spain, and Bulgaria. Fairfield is a planned 1,000 MW combined
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| *,cycle gas turbine merchant power plant to be constructed in Fairfield, Texas,, adjacent to Entergy Gulf States' service S.te*tory. Riverisde is a planned.425 MW combined cycle gas turbine cogeneration plant-to be cqnstructed in Lake "Chailes, Louisiana. Riverside is qxpected to 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
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| * cycle gas turbine merchant power plant is in the planning stages for construction near Castelnou, Spain. Entergy plans; to work with the National Electric Company of Bulgaria to modernize andl upgrade Maritza East I1, an 840 MW coal-fired power plant located in Bulgaria. In preparation for its development 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.
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| 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, S.A., which is the retail electric distribution company for the southern part of Buenos Aires, Argentina.
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| Domestic Non-Utility Nuclear Operations plants and Efitergy's domestic non-utility nuclear power business is focused on acquiring nuclear power in the United'States.
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| prtoding operations And management services to nuclear power plants owned by other utilities Plant acquisitions are made through Entergy's wholly-owned subsidiary, ENHC, and operations and management Nuclear.
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| services, including decommissioning services, are provided by Entergy's wholly-owned subsidiary, Entergy In July 1999, Entergy acquired the 670 MW Pilgrim Nuclear Station located in Plymouth, Massachusetts from with Boston Edison and other Boston Edison. The facility has firm total output power purchase agreements (PPAs) 2001, which utilities that expire at the end of 2004. One hundred percent of the plant output is committed through decreases to 50% by 2003.
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| for the Entergy's nuclear business has an outstanding offer to the New York Power Authority (NYPA) located near Oswego, New York and acquisition of NYPATs 825 MW James A. FitzPatrick nuclear power plant York. On February 24, NYPA's 980 MW Indian Point 3 nuclear power plant located in Westchester County, New that the NYPA Board of 2000, NYPA received a competing offer for the purchase of these plants. It is anticipated management expects to Trustees will meet in mid to late March to consider the offers. If Entergy's offer is accepted, close the acquisition by the fourth quarter of 2000.
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| to lease and In December 1999, Entergy signed an agreement with ýRochestei Gas and Electric (RG&E) in Scriba, New York. Nine operate the Nine Mile Point 1 and 2 nuclear power plants, totaling 1,754 MW, located Mile Point 2 is co-owned by Mile Point I is owned by Niagara Mohgvk Power Corporation (Niagara), and Nine Long Island Lighting Company (doing RG&E, Niagara, New York State Electric & Gas Corporation (NYSEG),
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| and operating agreement is subject to business as LIPA), and Central Hudson Gas & Electric Corporation. The lease Niagara's and NYSEG's ownership RG&ENs ability to close on its exercise of its right of first refusal to acquire (NYPSC). Niagara interests in the plants and is subject to approval by the New York Public Service Commission to a third party. Entergy's and NYSEG filed a proceeding with the NYPSC for the sale of th* ownership interests proceeding. In that proceeding, the staff of the non-utility nuclear business intervened as a party to the NYPSC ownership and operation of the Nine Mile NYPSC has.stated that it will explore various alternatives for the future
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| *plai*t.. o .:
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| operations and Entergy Nuclear provides services to plants owned by other utilities, including engineering, administrative support, maintenance, fuel procurement, management and supervision, technical support and training, and decommission nuclear electric power and other managerial or technical services required to operate, maintain, Yankee and Millstone Unit 1 facilities. Currently Entergy is providing decommissioning services for the Maine provides decommissioning nuclear power plants. The cost of decommissioning and insuring the plants that Entergy services for are the responsibility of the plant owners.
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| Business Sales its security monitoring business which In January 1999, Entergy disposed ofMississippi, operated primarily in North and
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| 'South Carolina, Alabama,. Florida, Georgia, Louisiana, and Texas. In June 1999, Entergy disposed of Local Exchange its interest in the HypeniOn Telecommunications joint ventures, which operate three Competitive Rouge, Louisiana. These CLECs Carriers (CLECs) in Little Rock, Arkansas; Jackson, Mississippi; and Baton provide long distance carrier access and local exchange services.
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| 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 investment in under PUHCA. Absent SEC approval, these regulations limit Entergy Corporation's aggregate of consolidated retained earnings at the time domestic and foreign generation businesses to an amount equal to 50%
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| in the UK and Australia an investment is made. Using the proceeds from the sale of electric distribution businesses 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.
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| International operations are subject to the risks inherent in conducting business abroad, including possible nationalization or expropriation, price and cureny exchage controls, inflation, limitations, on foreign participation in local enterprises, and other restrictions. Changes in the relative value of currencies.pwy favorably or unfl.vorably affect the financial condition and. results of opeons of Entergy's non-U.S. businesses. In addition, exchange control restrictions* i* certain countries may limit or prevent the repatriation of earnings.
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| Selected Data Selected domestic utility customers and slbs data for 1999 are summarized in the following tables:
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| Customers as of December 31,1999 Area Served Electric Gas (In Thousands)
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| Entergi Arkansai Portions of Arkansas and Tennessee 638 Entergy Gulf States Portions of Texas and Louisiana 669 "89 Entergy Louisi . Portiopof Lo*u0iana 635.
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| . ntergy 4Missippi. -Port*, of Misissippi 395 Entergy )w Orleans: Cityof.New Orleans, except Algiers, whi *
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| ..is prOvded electric service by Entergy Louisiana 185 .*46
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| ,Totatlcustomers 2,522 235 1999'- Sdet6d Dome~tic Utility Electric itiergf Sales Data Pitr~Extet : mta Entegy' Arkansas Gulf States Louisiana Mississippi New Orleans Energy Entegy (a)
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| InGWfl)
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| 'Electric lepartii:';
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| Sakesto retail customots 18,66 " " 34,348 29,095 12,518 5,895 - 100,519 Skales fxcr resale::
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| 7,592 671? 415 1,774 441 7,567 Odiers 4,868 3,408 831 426 180 9,114 Total 31,124 38,433 30,341 14,718 6,516 7,567 110,233 Steam Department Sales to steam products cWustcnr 464 - 464 Total "31,124 38,897 30,341 14,718 6,5.1. 7,567 110,697 "Avrageuse per residential customer (OMD 11,955 15,322 15,033 14,180 12,674 - 14,034 (a) : Includes the effect of intercompany eliminations.
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| 1999 - Selected Natural Gas Sales Data MCF,'.respectively, of natural
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| - .Entergy New Orleans and Entergy Gulf-Staes sold: 15,106,716 and-6i064,879 1998,. and 1997, revenues from natural gas to retail customers in 1999. For the periods ended December 31, 1999, products and services are discussed New Orleans' gas operations were not material for Entergy Gulf States. Entergy below in "BUSINESS SEGMENTS."
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| Refer to "SELECTED FINANCIAL IDATA FIVE-YEAR, COMPARISON OF ENTERGY CORPORATION- ;AND'. D SUBSIDIARIES, ý ENTERGY ARKANSAS, JENTERGY : GULF STATES, NEW ORLEANS,-- and SYSTEM ENTERGY ':LOUISIANA, ENTERGY MISSISSIPI;- ENTE*RGY for further information .
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| with respect to report, ENERGY" which follow each company's financial statements in this operating statistits..
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| As of December 31, 1999, Entergy had 12,375 employees as follows:
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| Full-time:
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| *En tergyCorpxr*tion
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| *
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| * 1490 Eatergy A6iias 1,595 833 Entergy Louisiana
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| * itergy Mississippi *p11 Intergy New QrlneaPs .362..
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| System Energy 3,249 Entergy Operations Enter-gy SerVices * -2,172
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| * Other subsidiaries - 1,102 12,214 Total Full-time Part-time 12,75 Toa Entergy Coine-tition period of approximately the As a result of the actions of federal legislative and regulatory bodies over the gas, and other energy related products and past twenty years, wholesale markets have developed in which electricity, rates. These wholesale markets services are purchased and sold at market-based (rather than traditional cost-based) ways in which public utilities conduct their are continuing to grow and evolve. This has resulted in changes in the now include not only public utilities business and in the nature of the participants in these wholesale markets, which traders, wholesale generators of and but also power marketers and traders, other energy commodity marketers electricity, and a wide range of wholesale customers.
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| of the United States, including Major changes in the retail utility business are now occurring in some parts and Arkansas adopted legislation in 1999 states in which Entergy's domestic utility companies operate. Both Texas into distinct distribution, transmission, aimed at separating ("unbundling") traditional integrated public utilities competition into the generation generation, and various types of retail marketing businesses and introducing domestic utility businesses operate have yet to component of utility service. Other jurisdictions in which the Entergy decide whether to embrace retail competition and utility unbundling, but each of these other jurisdictions is studying the matter.
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| It is anticipated that changes 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 some cases, actions by one jurisdiction may even come intoconflict with actions by another, creating mutually incompatible obligations for public utilities and holding.companies, indluding 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 However; 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 titilitycompanies; conduct their business. Some of these alterations will be positive for Entergy and its affiliates, while :others will not b -.
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| These changes will likely result in increased costs associated with utility unbundling and transitioning tonew 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.
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| Utilities, including the domestic utility companies, may be required or encouraged to sell generating plants or interests therein, or the output from 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.
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| As a result of restructuring, Entergy's domestic utility companies may no longer be able to apply regulated utility accounting principles to some or all of their operations, and -they may be required to write off certain regulatory assets or recognize asset impairments.
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| 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.
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| "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 industiy, including the status of the transition to a more competitive utility business environment for the domestic utility companies.
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| CAPITAL REQUIREMENTS AND FUTURE FINANCING plan focused on For the years 2000 through 2004, Entergy plans to spend $9.8 billion in a capital investment nuclear operations power development and improving service at the domestic utility companies and growing its global $3.9 billion to the businesses. The estimated allocation in the plan is $4.2 billion to the domestic utility companies, business. The capital investment plan global power development business, and $1.7 billion to the nuclear operations planning and the ability to recover is subject to modification ba.9 on the ongoing effeCts oflUMition to competition upon Entergy's ability to access the capital the regulated utility costs in. rates. Additionally, the plan is contingent may be necessary for Entergy -to implement necessary to finance trhe planned expenditures, and significant borrowings expenditures and AFUDC, .but these capital spending plans. Aonstruction expenditures, (including environmental billion in excluding nuclear fuel) for Entergy are estimated at $1.5 billion in 2000, $1.7 billion in 2001, and $1.8, for the domestic utility companies and System 2002. Included in these totals are estimated construction expenditures Energy as follows:
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| 2000. ;2001 20Q;?,, Total (In Millions)
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| Entergy Arkansas $350 $248 -$8 $786 Entergy Gulf States 298 269 c,204 :771 Entergy Louisiana 202 188 162 552 Entergy Mississippi - 115 122 123 360 Entergy NewOrleans 501 46 45 141 39 20 12 :71 System Energy on (i) distribution and transmission The domestic utility companies' anticipated spending is focused mainly of generation stations that have projects that will support continued reliability improvements; (ii) return to service environment. Projected been held in reserve shutdoin. status; and (iii) transitioning to. a more competitive for Ahe third quarter which is scheduled construction expenditures for the replacement of ANO 2's steam generatois, replacement of ANO 2's steam generators of 2000, are included in Entergy Arkansas' estimated figures above. The to meeting ,construction expenditure is discussed in Note 9 to the financial statements.,.Entergy, 'in addition:
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| and cash sinking fund requirements.
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| requirements, must meet scheduled long-term debt and preferred stock maturities are discussed in Notes 4, 5, 6, 7, 9, and 10 Entergy's capital and financing requirements and available lines of credit for a number of reasons, to the financial statements. Actual construction costs may vary, from these- estimatesmaterials, and capital costs; labor, equipment, including changes in load growth estimates; environmental regulations; modifications to generating units to meet regulatory requirements; and the transition.to competition.
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| gas., turbine Entergy's global power development business is currently constructing two combined-cycle to BP Chemicals' will provide steam and electricity merchant power plants in the UK. Saltend, a 1,200 MW plant, 75 MW of power pool. Approximately nearby complex with the remaining electricity to be sold into the UK national Originally scheduled for commercial the capacity will be sold toiBR.hChemicals undera)PPAwith a term of 15 years.
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| has been delayed due to construction problems at the site. The operation in January 2000, Saltend's completion after substantial analysis, and currently construction contractor has submitted a revised construction schedule in service by June 30, 2000. The.total cost estimates a phased-in completion of the three-uinit plant with the fidl plant second plant is an 800-MW facility of this project is currently estimated to be approximately $824 million. The fourth quarter of 2000. Management known as Damnhead Creek. It is expected to begin commercial operation in the The financing of the construction of these two estimates the total cost of this project at approximately $582 million.
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| power plants is discussed in Note 7 to the financial statements.
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| to acquire twenty-four In October 1999, Entergy's global power development business obtained an option GE7EA advanced technology gas turbines.
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| GE7FA advanced technology gas turbines, four steam turbines, and eight of the turbines, including long-term Delivery of the turbines is scheduled for 2001 through 2004. The total cost to be used in The turbines are expected service agreements with GE Power Systems, is approximately $2.0 billion.
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| 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
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| 'of these turbines are $273 million in 2000, $415 million in 2001, and $311 million in-2002.
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| Entergy Corporation's Primary capital requirements are to invest periodically in, or make loans to, its subsidiaries and to invest in new enterprises. Management discusses Entergy Corporation's current and future planned investments in its subsidiaries and the finanicial' sources for such. investments in "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES." The principal sources of funds for Entergy Corporation are dividend distributions from its subsidiaries, funds available under its bank credit facilities, funds received from its dividend reinvestment and stock purchase plan, and funds received from the sale of assets.
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| Certain System Financial and Support Agreements Unit Power Sales Agreement (l0tergy Arkansas,.Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)
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| The Unit Power Sales Agreement allocates capacity, energy, and the related costs from System Energy's 90% ownership and leasehold interests in Grand Gulf 1 to. Entergy Arkansas (36%), Entergy Louisiana (14%),
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| Entergy Mississippi (33%), and Entergy New Orleans (17%). Each of these companies 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 operatiow. :Payments under the Unit Power Sales Agreement are System Energy's only source of operating revenues,ý -,-The financial condition of System Energy depends upon the continued commercial operation of Grand Gulf 1 and the receipt of such payments.
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| Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans generally recover payments made- under the Unit Power Sales Agreenient through the!mtes 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 shares of Grand.Gulf 1. The retained shares are discussed in Note 2 to the financial statements .under the
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| ,heading "Grand Gulf 1 Deferrals and Retained Shares."
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| Availability Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, land System Energy)
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| !The Availability Agreement among System Energy and Entergy Arkansas, Entergy, Louisiana, Entergy Mississippi, and EntergyNew Orleans was entered into in 1974 in connection with the financing by System Energy of Grand Gulf. The Availability Agreement provided that System-Energy would join in the System Agreement on or before the date on which Grand Gulf I was placed in commercial operation and would make available to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans all capacity and energy available from System Energy's. share of Grand Gulf.
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| Entergy Arkansas, Entergy Louisiana, Entergy MissisSippi, and Entergy'New Orleans also agreed severally to pay System Energy monthly for the right to receive capacity and energy from Grand 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 operating 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.
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| The allocation percentages under the Availability Agreement are fixed as follows: Entergy Arkansas 17.1%; Entergy Louisiana - 26.9%; 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 Agreement.
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| -SystemEnergy 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 the letters of credit in connection with the equity bonds and reimbursemuent obligations to certain banks providing 10 to the financial statements under "Sale and funding of the, dte and leaseback transactions described in Note In these assignments, Entergy Arkansas, Entergy Leaseback Transactions - Grand Gulf 1 Lease Obligations." in the event they were prohibited by Louisiana, Entergy Mississippi, and Entergy New Orleans further agreed that, Agreement (for example, if FERC reduced or governmental action from making payments under the Availability then make subordinated advances to System disallowed such payments as constituting excessive rates), they would System Energy would not be allowed Energy in~the same amounts and :atz the same times as the prohibited payments.
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| under the. related indebtedness !or in other to repay these subordinated advances so long as it remained in default similar circumstances.
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| that Entergy Arkansas, Each of the assignment agreements relating to the Availability Agreement provides to System Energy.
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| will make payments directly Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans of indebtedness that are made directly to the holders However, if there is an event of default, those payments must be rata according to the amount of the beneficiaries of such assignment agreements. The payments must be made pro the respective obligations secured.
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| Entergy New Orleans to The oblihg ns of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and make payments under the Availability Agrement are subject to the receiptand continued. effectiveness of all the Availability A would require that necessary reglatoiy approvals. Sales of capcity and energy under with respect to the terms of such sale. No such filing the Availability Agreement be submitted to FERC for approval from Grand Gulf are being made pursuant to the with FERC has been made because sales of capacity and energy and energy are made in the future pursuantto the Unit Power Sales Agreement If, for any reason, sales of capacity Agreement would be submitted to FERC for Availability Agreement, the jurisdictional portions of the Availability jurisdiction of the SEC, whose approval has approval. Other aspects of the Availability Agreement are subject to the been obtained, under PUHCA.
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| Unit Power Sales. Agreenut to
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| .Since commercial operation of Grand Gulf 1 began, payments underfth Agreement Therefore, no payments under SystemEnergy have exceeded the amounts payable under the Availability Arkansas or Entergy Mississippi fails to make. its the Availability Agreement have ever been required. If Entergy to obtain finds from other sources, Entergy Unit Power Sales Agreement payments, and System Energy is unable or demands by System Energy or its creditors Louisiana.,'AdEnteltggyNew Orleans could become subject to claims (or the assignments thereof) equal to the difference for payments-.or advances under the Availability Agreement and their required Availability Agreement payments.
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| between their required Unit Power Sales Agreement payments modified by mutual agreement of the parties The Availability Agreement may be terminated, amended, or thereto, without further consent of any assignees or other creditors.,
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| Capital Funds Agreement (Entergy Corporation and System Energy)
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| Funds Agreement, whereby Entergy System Energy and Entergy Corporation have entered into the Capital to (i) nwatam. System Energy's equity Corporation has .agreed to supply System Energy with sufficient capital (excluding short-term debt) and (ii) permit capital at an amount equal to a minimum of 35% of its total capitalization all indebtedness for borrowed money of System the continued commercial operation of Grand Gulf 1 and pay in full Energy when due.
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| Funds Agreement System Energy Entergy Corporation has entered into various supplements to the Capital first mortgage bonds and for reimbursement has assigned itstrights under such supplements as security for its with the equity funding of the sale and leaseback obligations to certain banks providing letters of credit in connection
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| - Grand Gulf 1 Lease Obligations."
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| transactions described in Note 10 under "Sale and Leaseback Transactions money incurred by System Energy in Each such supplement provides that permitted indebtedness for borrowed Energy's rights under the Capital Funds connection with the financing of Grand Gulf may be secured by System Agreement on a pro rata basis (except for the Specific Payments, as defined below). In addition, in 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 agreements. The payments (other than the Specific Payments) must be made pro rata according to the amount of the respective obligations benefiting from the supplemental agreements.
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| The Capital Funds Agreement may be terninated, amended, or modified.by mutual agreement of the parties thereto, upon obtaining the consent, if required, ,of those holders of System Energy's indebtedness then outstanding who have received the assignments of the Capital Funds Agreement.
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| RATE MATTERS AND REGULATION Rate Matters The retail rates of Entergy's domestic utility companies are regulated by state or local regulatory authorities, as . described, below. - FERC regulates their wholesale rates (including intrasystem sales puwsuant, to the System Agreement) and interstate transmission of electricity,. as well as., rates for System Energy's. salesi: of capacity and energy from Grand Gulf 1 to Entergy Arkansas, Entergy Louisial,. Entergy Mississippi, and Entergy.New Orleans pursuant to the Unit.Power Sales Agreement.
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| Wholesale Rate Matters System Energy As described above under "CAPITAL REQUIREMENTS AND FUTURE FINANCING - Certain System Financial and Support Agreements","System Energy, recovers costs. related to-its interest in Grand Gulf 1 through rates charged to Entergy Arkansas, Entergy Louisiana, Entergy. Mississippi, and Entergy New. Orleans for capacity and energy under the Unit Power Sales Agreement.
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| In December 1995, System Enexgy implemented a $65.5 million rate increase,-subjeet to refild., In 1998, FERC approved, requests by EntergyArkansas and Entergy Mississippi to accelerate a portion. of their Grand Gulf purchased power obligations. The rate increase request filed by. System Energy with FERC: and. the Grand Gulf accelerated recovery tariffs are discussed in Note 2 to the financial statements.
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| System Agreement (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)
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| The domestic utility companies have historically engaged in the coordinated planning, construction, and operation of generationtand transmission facilities pursuant to the terms. of the System Agreement, as described under "PROPERTY -Generatine Stationsi" below.: Restructuring in the electric, utility industry will affect these coordinated activities in the future.
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| In connection with the Merger in 1993, FERC approved certain rate schedule changes toý 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 Seice Schedule MSS-1 of that agreement. The LPSC and the: MPSC submitted testimony in this proceeding seeking retroactive refunds for Entergy Louisiana and Entergy Mississippi estimated at $22.6nmillion and
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| $13.2 million.plus related interest charges, respectively. In August 1997, the FERC decided that retroactive refunds should not be ordered and that the System Agreement should be amended to allow out-of-service units to be included in reserve equalization. Appeals made by the LPSC and-the MPSC were denied in 1999.
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| results in unjust In March 1995, the LPSC filed a complaint with FERC alleging that the System Agreement to exclude curtailable load and unreasonable rates. The LPSC requested that FERC modify the System Agreement that engage in real-time from the cost allocation determination and to permit Entergy's domestic utility companies among the domestic utility companies.
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| pricing at th -retail e*veto be asg~ssed only the'marginal cost for energy sold and unreasonable was In August 1996, FERC found that the LPSC's claim that the System Agreement'is unjust in a September 1997 order without merit and dismissed the LPSC's complaint. The FERC confirmed this finding matter to FERC for further denying the LPSC's request for rehearing. On appeal, the D.C. Circuit reinandM the 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 proceeding.
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| OPen Access Transmission (Entrgy Corporation, Entergy Arkansas. Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and EntrgyNew Orleans)
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| In-January 1995, In O*6t -'1994,Entergy's domestic utility companies filed revised trausmission tariffs.
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| of Entergy Power's FERC made the transmission tariffs effective, subject to reflmd, and ordered, an investigation to refund.
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| price rate schedules subject market pricing authority, thereby making Entergy Power's market wholesale customers in 1996 EC issued ttvo orders designed to implement open access transmssioni for facilities owned by oer by .allowing thir"party supplidis to transrmiteneegy td customers over. trannission co.phi. .rtes I-Order No. I 88r*equi. all public utilitids' regulated by FERC to. provide wholesa transmission access and stranded costs. Order thir&pgrties and;secifically addresses issues related to nondiscriminatory transmission ses e of Conduct and requires the implementation and innae of an open access same-time No. 8890" and' an increase information system by 6ach public utility. Order Nos. 888 and 889 led to open acceSs tlansmission within the in marketing and trading activities by utilities and power marketers, which intensified competition whoks iýe j lowfrikket; filed an open Iii July 1996, in order to codmply with FERC Order No. 888, the domesi' utility companies the non-rate 1997, FERC accepted
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| : ia.i.i.ssion1triff&which supi.erseded the October' 1994 taris. In January access FERC issued Order terms and conditions of the July 1996 tariff, subject to limited modifications. In Match'-1997 file revised tariffs to utilities to No. 888-A addressing rehearing requests from Order No. 888 and directing public
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| 'e oircine ablished-in Or No 888-A. InJuly 1997, Entergy SerVicei filed with the FERC its
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| 'retie the* E Order No.
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| and conditions of FERC wholesale transmaiSion access 'compliance tariff incorporating the non-rate terms 888-A.
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| power issues. The In October 1998, FERC issued an order addressing the outstanding tariff rate and market market power and order stipulated that Entergy's open access transmission tariff mitigated any transmission authority. The Entergy Powmer's markd pricing determined iht o further action istnee" in tl investigation of rate rather than the order also bulk transmission service affirmed that trsmissionrpiifng should be priced at a rolled-in, system-wide and l -roPosed by Entergy. The ýFIRC also rejected customers' requests to Sbifurcated and did not support receive creft -for biistomer-owned facilities, finding that the facilities were not integrated with Enterey's tansmission, system*
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| FERC. - " Requests
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| . . or.
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| ...for .rehearing .. October 1998 ýrder are pending before
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| .. clarification of the of enhancing FERC policy strongly favors independent control over transmission operations as a means the formation of a coiipetfiti** wholesale power markets. In response to this policy, Entergy proposed to FERC regional transmission company ('rancO). The proposed Transco would be:
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| "o a separate legal entity regulated by FEWC; companies and other "o composed of the transmission system transferred to it by the domestic utility owners in Entergy's region; Striiismssion and would not be "o operated and maintained by employees who would work exclusively for the Transco employed by Entergy or the domestic utility companies; and o passively owneo by the domestic utility companies and other members who transfer assets, which will not control orotherwise direct its operation and nmanagement.
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| In July 1999, FERC responded to Entery's proposal. FERC concluded that passive ownership of a Transco by a generatit.g company or other market participant could meet FERC's current independence ad governance requirements, provided the Transco is structured to a4dress certain issues and concerns raised by FERC. The issues and concerns identified by FERC regte to:
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| o the selection process for the Transco's board Of directors; o the Transco board's fiduciary obligations to the member companies; o the ability of the,Transcq to raise additional cap~ital; and o restrictions on transactions between the Transco and the mpember. companies.
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| Management expects to make additional filings with federal, state, and local reguaptqy authorities addressing these and other issues and seeking necessary approvals for the -frmation of the Transcq.. If approv4d, the Transco would likely become operational in 200 1.
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| In a rulemaking that wl fOfcte Transco, FERCissued Order 200Q in December 1999. Qrder,2000 calls for owners and operators oftranmsission lines in the Vni a Joi4 regial transmissiqn oo WRTOs"O on a volun.ar basis. Order 2000 requis putilitie public th~t own o , or.n i terate :,c trasmission facilities to file. by Ocer 15, 2000 a propos*.fio how they inted top arcipat i Ra 0 Or, alternatively, to describe the steps theJiw .vetaken to do so.or the reasons why. it is iot ftasible tQ paftcipate in an RTO. .FERC's Order 2000 requires ta RTOs be effective no later than December 15, 2001.
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| FERC is maintaining flexibility as to the structure of RTOs. For example, it appears th4a RT0s.maly bpfor profit or not-for-profit and may be organized as joint ventures or legal entities of various types. However, RTOs will be required, among otherthings,,to be independent market participants, to have sufi'ent rgogi scope to maintain reliability and efficien., "tobe non-dis" in granting service, andto aintain operational contrql ver their regional transmission systems. .
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| The Transco, a p erdý en, for-profit transmission companywhich has alreadybeeiprpposed to FERC by the domesti utility co nan'es, is Entergy's preferred approach for complying with FERC's TOrder 200. However, Entergy is also exploring other means for complying with Order 2000.
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| Retail Rate Matters General (Fntergy Arkansas, Entergy Gulf States, Entergy Louisiaa FoteryMsissippi, and En NeOrleans)
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| Cerita costs lelated toGrand,9ulf 1, Waterford 3, and River Bend were ph d into rdeal rates over a period of years in order to avoid the "rate. shock" associated with increasing rates to reflect all such costs at once.
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| Entergy Arkansas, EntergyLou'isiana, Entergy Missisippi, and.the portion of Entergy!Gulf States re ated bythe LPSC have fully recovered such deferred costs associated with one or more of the plants. Entergy New Orleans' phase-in plan expires in 2001.
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| The retail regulatory philosophy has shifted in some jurisdictions from traditional, exclusively cost-of-service regulation to include performance-based .rate elements., Perfornance-bAsed formula rate lans are.designed to encourage efficiencies and productivity while permitting utilities and their customers to share in the benefits. Entergy Mississippi and Entergy Louisiana have implemented performance-based formula rate plans.
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| The domestic Utility companies have initiated proceedings with state and 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 Note 2 to the financial statements.
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| &nteryArkaiisas Retail Rate Proceedings "Entergy Arkansas' rial retail rate P edings that were resolved during the past year, are currently pending o
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| * crrentyar results are dis'cussed in Note 2 to the financial statements.
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| Recovrty of Grand Gulf 1 Costs Under the settlement agreement entered into with the APSC in 1985 and amended in 1988, Entergy Arkansas retains 22% 6f its sr ofOrand Gulf 1 costs and recovers the mnaiing 78% of its share through rates. Under the ndit Power Sales Ageeifemet, Entergy Aikngas'sAr of Grand Gulf 1 costs is 36%. in the event Energy Arkansas equal to is not able to sell its retained sare to third paties, it may sell such en i-gy to its retail customers at a pride its avoided energy cost, which is currently less than Entergy Arkansas' cost of energy from the retained share.
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| Fuel Recovery energy Entergy Arkansas' rate schedules include an energy cost recovery rider to recover fuel and purchased costs Th* rider utilizes Poected energy costs for the twelve month period commencing On April 1 of each year to develop an energy cost rate, iwliich'is redetdriined annually and includes a true-up adjustment reflecting the over recovery or under-recovery of the energy cost for the prior calendar year.
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| Rate Freeze Ifi- Deceb*er 1997, the ASC appre a 'settlement agreement lvig. Et s transition t
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| ~bi~ 6itionOnij-prsio in that settkmetnit was that base rame Wduld remain at th ee ~uig' rmt
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| ,ttmndt.s se u4tiJly;12001. The termsofthe settlement agreement are discussed in Note 2 to the ikianciia Retailf *tProceedmgs e currently Entergy Gulf States' material retail rate proceedings that were resolved during the past year, a pending, or affect current yr results are discussed in Note 2 to the financialte is currently nts. In a tion, te 1999 ned ntl settled Ente*' Gulf States' 1996, and 1998 rate proceedigs, whkh under appeal, and various other matters is discussed in Note 2 to the financial statements.
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| Texas Jurisdiction - River Bend
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| ". In Match,.1998,;the PUCT issean order disallowing cvery of $1.4 billion of company-wide abeyed
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| ".~i~erBead plant costs" *hcl have been leld: mb ce since 1988. Entergy Gulf States has appealed the PUCT's ddsion onhs matter to a Texas District Cbtirt.'fThe - ettlement agreement mentioned above addressei th treatment the plant oi'f aeyed platt costs, 4and as a teult, Entergy Gulf States removed the reserve for these costs and reduced asset in 1999. 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 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.
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| 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 13-
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| | |
| agreement is effective through December 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.
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| 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 surcharge 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.
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| Entergy Gulf States' Louisiana gas rates include a purchased gas adjustment based on estimated gas costs for the billing month 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.
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| Entergy Louisiana Retail Rate Proceedings Entergy Louisiana's material retail rate proceedings that were resolved during the past year, are currendy pending, or affet current year results are discussed in Note 2 to the financial statements.
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| 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 Louisiana's share of capacity and energy from rand G6 ,i, OJect to certain'terms. aj conditions. In November 1988, Entergy Louisiana agreed to retain, and not recover from retail raiepayers, 18% of its 14% share of the costs of Grand Gulf I's capacity and energy. Non fuel operation and maintenance costs for Grand Gulf 1 are recovered through Entergy Louisiana's base rates.
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| Additionally, Entergy Louisiana is allowed to recover, through the fuel adjustment clause, 4.6 cents per KWH r the energy related to its retained portion of these costs. Alternatively, Entergy Louisiana may sell such energy to nonaffiliated parties at prices above the fuel adjustment clause recovery amount, subject to the LPSC's approval.
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| Performance-Based Formula Rate Plan Entergy. Louisiana's performance-based formula rate plan filings are discussed in Note 2 .to the financial statements.
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| Fuel Recovery Entergy Louisiana's rate schedules include a fuel adjustment elapse designed to recover the cost of fuel in the second prior, month, adjusted by a surcharge or credit for deferred fuel expense arising from the monthly reconciliation of actual fuel costs incurred.with fuel cost revenues bidWl to customers. In May 1999, the LPSC issuedan order requiring Entergy Louisiana to realign approximately $15.9 million of certain fuel costs from the fuel adjustment clause to base rates.
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| Entergy Mississippi Retail Rate Proceedings Entergy Mississippi's material retail rate proceedings that were resolved during the past year, are currently pending, or affect current year results are discussed in Note 2 to the financial statements.
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| Performance-Based Formula Rate Plan Under its performance-based formula rate plan, Entergy Mississippi's earned, rate .of return is calculated
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| .-automatically every 12 months and compared to and adjusted against a benchmark rate of return. The benchmark is small calculated under a separate formula within the formula rate plan. The formula rate plan allows for periodic returns and upon certain adjustments in rates based on a comparison of actual earned returns -to benchmark the financial performance factors. The formula rate plan filing for the 1998 test year. is discussed in Note 2 to statements. The formula rate plan filing for the 1999 test year will be submitted in March 2000.
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| Fuel Recovery
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| ,Entergy Mississippi's rate schedules include an energy cost recovery rider, to recover fuel and purchased energy costs. .The~rider utilies. projected energy, costs for the coming calendar year to develop an energy cost rate, of which is redetermined annually.and includes a-true-up adjustment reflecting the over-recovery or under-recovery the energy cost as of September 30 immediately preceding the annual redetermination.
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| Entergy New Orleans Retail Rate Proceedings IEntergy New Orleans'-material retail rate proceedings that were resolved during the past year, are currently pendingtor affect current year results are discussed in Note 2 to the financial statements.
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| Recovery of Grand Gulf 1 Costs
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| ,. .,-f.* ,Under Entergy New Orleans' various rate settlements with. the Council in 1986, 1988, and. 1991, Entergy S-:,
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| 1 costs.
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| New-Orleansiagreed to absorb -and not recover-from ratepayers atotal of $96.2.million of its Grand Gulf Entergy New Orleans was permitted to implement annual rate increases in decreasing amounts each year through through 1995, and to defer certain costs and related carrying charges for recovery on a schedule extending from 1991 Orleans' deferred costs was $35.7 million.
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| 2001. As of December 31,; 1999, the uncollected balance of Entergy New Fuel Recovery of Entergy New Orleans' electric rate schedules include a fuel adjustment clause designed to recover the cost fuel in, the second prior month, 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 1 costs paid by Entergy New Orleans and the estimate of such costs, which are included in base rates, as provided. in Entergy New Orleans' Grand Gulf 1 rate settlements. Entergy New by a Orleans' gas rate schedules include!an adjustment to reflect estimated gas costs for the billing month, adjusted surcharge or credit similar to that included in the electric fuel adjustment clause..
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| Reguiation Federal Regulation (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)
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| SPUHCA Entergy Corporation and its various direct and indirect subsidiaries (with the exception of its EWG and in FUCO subsidiaries) are subject to the broad regulatory provisions of PUHCA. Except with respect to investments projects, the principal regulatory provisions of PUHCA:
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| certain domestic power projects and foreign utility company o limit the operations of a registered holding company system to a single, integrated public utility system, plus certain ancillary and related systems and businesses; o regulate certain transactionsamong affiliates within a.holding company system,,
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| o govem the issuance, acquisition and disposition of securities and assets by registered holding companies and their subsidiaries; o limit the entry by registered holding companies and their subsidiaries into businesses other than electric and/or gas utility businesses;-and
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| * o require SEC approval forcertain utility mergers and acquisitions.
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| 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 ýits ability to compete in the evolving electric energy marketplace and largely duplicates the .oversight activities otherwise performed by FERC *and other federal regulators and by state and local regulators..In lune 1995, the, SEC adopted a&report proposing options: for the repeal or significant modification of PUHCA.
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| Federal Power Act The domestic utility companies, System Energy, Entergy Power, and EPMC are subject to the Federal Power Act as administered by FERC and the DOE. The Federal Power Act provides for regulatory jurisdiction over the transmission and wholesale sale of electrio energy .ininterstate commere¢, 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 I capacity and energy provided to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans.
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| Entetgy Arkansas holds a FERC license for two hydroelectric projects (70 MW), which was .renewed on July 2, 1980 and expires in February 2003JIn:Febsuary 1998, Etergy Arkansas filed notice of its intent ta relicense these hydroelectric projects.
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| Regulation of the Nuclear Power Industry (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy)
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| Regulation of Nuclear Power Under the Atomic Energy Act. of 1954.and the Energy Reorganzaton Act of 1974, the operation of nuclear plants is heavily regulated by the NRC, which has, broad power to impose licensing and safety-related requirements.
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| In the event of non-compliance, the NRC has :tha authority to impose fines or shut down a unit, or both,. depending upon its assessment of the severity of,the situation, until compliance is achieved.- Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy, as owners of all or portions of ANO, Ri~er Bend, Waterford 3, and Grand Gulf 1, respectively, and Entergy Operations, as the: licensee and operator of these units, are suj'ect 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, infthe past, necessitated substantial capital expenditures at these nuclear plants, and additional expenditures could be required in the -future.
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| 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.
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| These matters are briefly discussed below.
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| Regudation of Spnt Fuel and Other Hig&f-Iel Raioactive Was for a specified fee, to construct storage Under the Nuclear Waste Policy Act of 1982, the DOE is required, high-level radioactive waste generated by domestic facilities for, and to dispose of all spent nuclear fuel and other nuclear power reactors. However, the DOE hasa nots yet identified a permanent storage repository and, as a result, te be6tuired -to fuel storage apacity iergys nuclear plant sites.
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| fr x x*u current: of-site storage capacity, and costs of
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| .nforation ccsicing spent fue.l. di.pdsW:co-itt6-ts with the DOE, to the financial statements.
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| ... di.m adiiton-l on sit6e;s6rag is osented in Note 9 Rgeiiatxibi*t f Lw-I-e Radioactive W-orste.
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| waste resulting fiom normal nuclear The availability and cost of disposal facilities for low-level radioactive Under the Low-Level Radioactive Waste PoliOy Act of plant operations are subject to a number of uwnrinties.
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| 1980, as aimended, each state is responsible for disposal of waste originating in that state, but states may participate The States ofArkansas and Louisiana participate in the in r~gionk1 comp ait6; fil thdif i6snibitiges jiitly. of Mississippi Waste Compact (Central States hast Compact), and the State the Central States Central Interstate Low-Level Radioactive te Sou - lRadi ive Waste Compact C at Compactr*-*. S ._ -.... Co..a..
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| have' rienbed lsign.,
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| .it Melays: in the development of wasta storage M~ach~etS,*here Pilgrim 44~oc-a-t4'' cdoes nnot p~rtilpt in a'ny oei~ compact and has be lwt faeiitis iPosaItsr e ipi-the Un StategI- but only one site, the fulfilits nitn. TV is open to out-of-region generators. The Bamwell Disposal Facility (Barnwell) located in South Carolina, lo-l1Ve1 ,kdi6active waste storage, and availability of Barnwell provides only a temporary solution fort Entergy'g does not alleviate the need to develop new disposal capacity.
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| of future funding. In December The Southeast Compact process is currently on bold pending resolution Comjtt Nershlene hicaiise application.- In December 1998, boiidgstate 1998, theand tot s in th Stae 1*lthe Cenn Centi~al St ms act fid a hawsut against the stat of Nebraska seeking nlt' i kr
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| * pf Entf Arkansas, Entergy Louisianai, and damages resulting froit;.delays anhI a development costs for new disposal fatcilities Entergy Gulf States, along with -other waste generators, fund the aifficult to predict. The Compact and the Southeast Compact are current schedules for the site development in both the Central States established, Entergy will seek continued access to undetermined at this time. Until long-term disposal facilities are low-level waste at its nuclear plant sites.
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| existing facilities. If such access is unavailable, Entergy will store
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| .ss, . . .. " ..
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| Regulation of Nuclear 'Plat li Energy are recovering through Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Grand Gulf 1, electric rates the estimated decommissioning costs for ANO, River Bend, Waterford 3, and together with the related earnings, can only be used respectively. These amounts are deposited in trust funds which, costs are periodicdll reviewed and updated to reflect for future decommissioning costs. Estimated decommissioning Applications are periodically made to appropriate inflation and changes. in regulatory requirements and technology.
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| . in. ta:, theii ch,-.: in Virject de
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| ."thoritls msioning csts. '-In conjunction with the re-i.latoo io jefiect; trust fund- Based on cost estimates provided by an Pilgrim acquisition, Entergy received Pilgrim's decommissioning outside consultant, Entergy believes that ,'any Pilgrim's decommissioning fund will be adequate to cover future
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| . i sd~s& '* 0st f*or the'plai* without additional deposits to the ust. Additiona information with respect Grand Gulf 1, and Pilgrim is found in Note 9 to the to decommissioning costs for ANO, River Bend, Waterford 3, financial statements.
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| Entergy Gulf States, Entergy Thle EPA-ct requires' all' electric utilitieg (indluding Entergy -Arkansas, from the DOE to contribute up to a total Louisiana. ad-Systi'.Eiergy) thatlprchased uriaium enrichment services billion) for of $150'million ýimual, o apptoXimaitly 15 years (adjusted for inflation, upto a total of $2.25 In accordance with the EPAct, contributions to decontamination and decommissioning of enrichment facilities.
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| decontamination and decommissioning fnds are recovered throughrates in the same manner as other fuel costs. The estimated annual contributions by Entergy for decontamination and decommissioning fees are discussed in Note 9 to the financial statements.
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| Nuclear Insurance "ThePrice-Anderson Act limits public liability for a single nuclear incident to approximately $9.5 billion.
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| Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, System Energy, and EntergyWs non-utility nuclear power business have protection with respect to this liability through a combination of prvate insuranve and an industry assessment program, as well as insurance for property damage, costs of replacement 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.
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| Nuclear Operations General (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy LouisWa, and, System Energy)
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| Entergy Operations operates ANO, River Bend, Waterford, 3, and Grand Gulf 1, subject to the owner oversight of Entergy .Arkansas, Entergy Gulf States, Entergy Louisiana, and System Epergy, respectively. Entergy Arkansas, Entergy Gf States, Ei-tergy Louis and System Epergy pay directly or reimburse Entergy Operations at cost for its operation of the nuclear units. Entergy's non-utilit nuclear power business is the operator of Pilgrim.
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| ANO Matters (Entergy Corporation and Entergy Arkansas)
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| The replacement of steam generators at ANO 2 is discussedlin Note 9 to the financial statements.
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| In February 2000, Entergy Arkansa. applied to. the NRC for an extension of ANO l's operating lipnse.
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| The current license expire iu2Q14, pnd, if granted, the extension wou!d provide the authority to continue operating the plant until 2034. Management expects the NRC consideration process to take two years.
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| State Regulation (Entergy, Arkansas, Entergy, Gulf Stats, iEntergy Louisiana, Entergy Mississippi, and Entergy New Orleans)
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| General Entergy Arkansas is subject to regulation by the APSC, which includes the authority to:
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| "o oversee utility service; "o set rates; "o determine. reasonable and adequate service; "o require proper accounting; "o control leasing; o control the acquisition or sale of any public utility plant or property constituting an operating unit or system; "o set rates of depreciation; "o issue certificates of convenience and necessity and certificates of environmental compatibility and public need; and
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| " regulate the issuance and sale of certain securities.
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| Entergy Gulf States is subject to the jurisdiction of the municipal authorities of a number of incorporated cities in Texas as to retail rates and service within their boundaries, with appellate jurisdiction over such matters residing in the PUCT. Entergy Gulf States', Texas business is also subject to regulation by the PUCT as to:
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| o retail rates and service in rural areas; o certification of new generating plants; and o extensions of service into new,areas.
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| Entergy Gulf States' Louisiana electric, and gas business and Entergy Louisiana are subject to regulation by the LPSC as to:
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| o utility service; o rates and charges; o certification of generating facilities;?
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| "o power or c.pacity purchase contracts; and "o depreciation, accounting, and other matters.
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| Entergy Louisiana is also subject to the jurisdiction of the Council with respect to such matters within Algiers in Orleans Parish.
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| Entergy Mississippi is subject to regulation by the,MPSC as to the following:
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| *
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| * utility service;
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| ,o service areas; o6 ftacilities; and .
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| 0 r~il rats of environmental "Entergy Mississippi is also. subject: to regulation by the APSC as. t 'the certificate is located in Arkansas.
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| compatibility and public need for the Independence Station, which the following:
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| Entergy New Orleans is subject to regulation by the Council as to o utility service; o rates and charges; '
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| o standards of service; o depreciation, accounting and-issuance of certain securities; and 6 other mnatters.
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| Fran-chise 303 incorporate S....Entergy Arkansas holds exclusive frawhises to provide electrie service i approximately continue unless the municipalities cities and towns in Arkansas..'7 These-,franchises arm unlimited in. duration: and. therefore, are terminable be contracts and, purchase the utility property. In Arkansas,, franchises are consideredto upon breach of the terms of the franchise.
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| of convenienceand necessity to Entergy Gulf States holds nonexclusive franchises,,pernmits, or certificates in Louisiana and approximately 63 provide electric and gas service in approximately 55 incorporated municipalities granted 50-year franchises in Texas and 60 incorporated municipalities in Texas. Entergy Gulf States typically is franchises will expire during 2007 - 2036 in yea franchises in Louisiana. Entergy Gulf States' current electric the City of Baton Rouge will expire in
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| *Texias and during 2015 - 2046 in Louisiana. The natural gas franchisein necessity from the PUCT to provide S2015.In addition, Entergy Gulf States holds a certificate of convenience and electric service to areas within 21 counties inteastern Texas.
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| service in approximately 116 Entergy Louisiana holds non-exclusive franchises to provide electric although six of these incorporated Louisiana municipalities. Most of these franchises:have 25-yearterms, electric service in approximately municipalities have granted 60-year franchises. Entergy Louisiana also supplies parishes in which it holds non-exclusive 353 unincorporated communities, all of which are located in Louisiana franchises.
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| Entergy Mississippi has 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 Mississippi statutory law, such certificates are exclusive. Entergy Mississippi. maywestern Mississippi. Under continue to, serve in such municipalities upon payment of a statutory franchise fee, regardless of whether an original municipal franchise is still in existence.
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| Entergy New Orleans provides electric and gas service in the City of New Orleans pursuant to city ordinances (except for in Algiers, which is served by Entergy Louisiana). These ordinances option for the City of New Orleans to purchase Entergy New Orleans' .lectric and gas contain a continuing utility properties.
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| The business of System Energy is limited to wholesale power sales. It has no distribution franchises.
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| 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 affected subsidiaries ,are.
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| compliance with environmental regulations currently applicable to their facilities in substantial and operations. . Because environmental regulations are subject to change, future compliance costs cannot be precisely estimated. However, management estimates that futurecapital expenditures for environmental compliance wiJl not be material for Entergy or any of its reporting subsidiaries.
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| Clean Air Legislation 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: ,
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| "o an acid rain program for control of sulfur dioxide (SO) and nitrogen-oxides (NOx);
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| 2 "o an ozone nonattainment area program for control ofNOx and volatile organic compounds; and "o an operating permits program for administration and enforcement of these and other Act programs.
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| Under the acid rain program, Entergy's subsidiaries do not anticipate that they will require additional equipment to control S02 The Act provides allowances to most ,of the- affected
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| :Entergy, generating units for emissions based upon past emission, levels.and operating characteristics.. Each allowance is an entitlementto emit one ton of S02 per year. Under theýAct, utilities are or will be required to possess allowances affected generating units.
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| for SO2 emissions from All Entergy fossil-fueled generating units are classified as' "Phase II",units under and are subject to S0 2 allowance requirements beginning in the year 2000. Management the' Act believes that it will be able to operate. the domestic utility companies': generating units efficiently without installing scrmbbers or.experiencing other significant expenditures.
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| Additional control equipment was recently installed at certainmEntergy, Gulf States generating units. to achieve NOx reductions due to the ozone nonattainment status of areas sewred in and around, Beaumont and Houston,. Texas.
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| Texas environmental authorities imposedNOx controls on power plants that had to be in place by,November 1999.
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| Entergy Gulf States believes the cost of additional control equipment necessary; 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~proposed strategies. These estimates will be refined during 2000 based on the final adopted strategies approved by the EPA.
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| a As part,of legislation passed in Texas in June 1999 to restructure the electric power industry in the state, certain generating Wmits of Enteiy Gulf States will be required to obtain operating permits and meet new, lower emission lfits for NOx. It is expected that Entergy Gulf States will incur costs of approximately $6 million between 2000 and 2003 to meet thesm new standards. These costs may or may not be recoverable in the restructured electric utility environment.
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| Other Envirownental 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,
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| ..by parties that generate or frnsport hazardous, substances rpleased from or at a site. Owners and operators of such sites also are deemed liable by 'CERCLA. .'CERCLA has- been interpreted to impose joint and several liability on
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| * esoooible, parties. The domestic utility companies have sent waste materials to various disposal sites over the I.yers.
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| MW addition, environmental laws now regulate certain ofthe domestic utility companies' operating procedures and maintenance practices-which historically were not-subjectto regulation. Some of Entergy's disposal sites have Wen the subject of governmwetal 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 affected domestic utility companies have e~tablished reserves for such environmental clean-up and restoration activities.
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| Enteigy Arkansas rkansashas received noticesfrom the EPA 'and the Arkansas Department of Environmental Quality (ADEQ) alleging that Entergy Arkansas, along with others, nay be a.PRP for clean-up costs associated with iarious-,sitesi' ,Arkansas.
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| , Contaminants at the sites include polychlorinated biphenyls (PCBs), lead, and other haztrdous :substances.
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| SEntergyArkansas identified PCBD contamination at the Little Rock R2*:o Tower site (formerly 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
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| :com*leWt inNovember. 1999rat a cost of approximately $320,000. Entergy Arkansas does not believe that any further liability, if any;,withlrespect to thio site will'be material.
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| -EntergyArkansas entered into a Consent Administrative Order with the ADEQ in 1991 that named Entergy Arkansas as a PRP for the initial. stabilization Iassociated with contamination at the -Utilities Services, Inc. state Superfund site located near Rison, Arkansas. This site is neither owned nor operated by any Entergy-affiliated company. This site was found to have soil contaminated by PCBs and pentachlorophenol (a wood preservative).
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| Containers and drums that contained PCBs and other hazardous substances were found at the site,. tntergy Arkansas worked with the ADEQ to identify and notify other PRPs with respect to this site. Approximately twenty PRPs have ben identified to date. InDe.bember 1999, Entergy!Arkansas, along with several other PRPs, met with ADEQ tepresentatives to discuss the cleanup of the site*: The PRPs are being encouragedto undertake a voluntary cleanup andlhave begun discussions regarding-the- sharing of costs. Entergy Arkansas' shareof total remediation costs at.this Aitaisestimated!at $2.7 million. As of December 31, 1999, Entergy Arkansas had incurred approximately $400,000 of these costs.
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| Entergy Gulf States 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. 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 States' premises (see "Other Regulation and Litigation" below).
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| In August 1999, Entergy Gulf States received notice from the Texas Natural Resource Conservation Commission (TNRCC) that it is considered to be a PRP for the Spector Salvage Yard- in Orange, Texas. The Spector Salvage site operated from approximately 1944 until ceasing operations in- 1971. In addition to general salvage, the facility functioned as a repository for military surplus equipment and supplies purchased from nilitary, industrial, and chemical facilities. Soil samples from the site indicate the release of heavy metals and 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 andhas yet to determine the extent of its participation as a PRP. Based on the size of the site, future expenditures for investigation and clean-up are estimated at $400,000.
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| Entergy Gulf,States is currently involved in a remedial investigationtof 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. Coal tar, a by-product of the distillation process employed at MGPs, was apparently routed to a portion of the property for disposal. The same area has also been used as a landfill. In 1999, Entergy Gulf States signed a second Administrative =Consent Order with the EPAto perform removal action at the site.
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| Entergy Gulf States believes that its ultimate responsibility for this site will not materially exceed its existing clean up provision of $19 million.
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| Entergy Gulf States is currently involved in the second phase of.an investigation of contamination 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 aware of this site based upon a survey performed by an environmental .consultant for the EPA. Entergy Gulf States obtained the srvices of an environmental consultant to. collect ,core samples and .to perform a search of historical records .to determine what activities oceurred, 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-effective 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.
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| In 1994, Entergy Gulf States performed a site assessment in conjunction with a construction project at the Louisiana Station Generating Plant (Louisiana Station). In 1995, a further assessment confirmed subsurface soil and groundwater impact to three areas on the plant site. After further evaluation, a notification was made to the LDEQ.
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| Remediation 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
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| $L.9 million.
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| Entergy New Orleans Entergy New Orleans has completed the stabilization and abatement of asbestos containing material at the A.
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| 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.t The -cost incurred through December .31, 1999 was approximately $1.9 million.
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| Future costs are not expected to be material.
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| 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 $2 million.
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| Entergy Louisiana and Entergy New Orleans states of Entergy Louisiana and Entergy New Orleans have received notices from te EPAl and/or the Louisiana and Mississippi that Qne or more of them may be a PRP for the following disposal sites, which are neither owned nor opexated by any Entergy subsidiary:
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| (MDEQ) ordered Entergy In October 1997, the Mississippi Department of Environmental Quality Louisiana to implement a remedial action work plan prepared, by a PRp" committee for Disposal Systems, Inc. sites at Fifth Street (Clay Point) an4. Street in Biloxi, Mississippi, ,and at Woolmarket, Mississippi. The MDEQ issued a similar order on the same date to Entergy Louisiana's contractor, defend ,and indemnify. A Ebasco Services, Inc. (Ebasco),i which Entergy Louisiana has agreed Io This settlement settlement was negotiated for Entergy Louisiana, including Ebasco, for $289,000.
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| relieved EEntergy Louisiana of future liabilities associated with these sitms.
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| and remedial, activities at a retired
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| . i From 1992 to 1994, EAtergy lquisiana performed a site assessment anud operated by a Louisiana power plant known as the Thibodaux municipal site, previously.ownd of "munimipajity. Entergy Louisiana purchased the,,ppwer plant at this site as.*prt of the acquisition ms, The site assessmentindicated some subsurfAcecontamination from through uel oil.
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| municipal elect*cýt h"daux sito:is expecteto continue through. 201.Q The cotd incurred Remendiation, 0f t.
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| , .December31: 1999 forthe ibodaux siteowas $502,000, Futur cists arc not expected tO exceed the existing.provisiol of $318,000...
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| including regulation of wastewater During 1993, .the LDEQ issued new rules for solid wast -regulation, ta certain of their power plant impoundments. Entergy Louisiana and Entergy New Orleans hav..deterined or close them. As a result, wastewater impoundments were affected by these regulations and have chosen to upgrade for Entergy Louisiana and$0.5 million for Entergy New ro.aining aOrleans, recorded, liability in the amount of $5.9 million r upgrades-and closures. Completionof this work is pending existed at December 31, 1999 for wt LDIEQapproval,"
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| Other Regulation and.*.tUgation : ,. .. .
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| Memer (Entergy Corporation and Entergy Gulf States) . . .-. "
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| Several parties, including Enpergy Services, appealed approvalpf the Merger to-the D.C. Circuit.
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| 'FERCs of FERC's deletion of a 40% cap on ýthe a untgmechanism of fuel savings Entergy Gulf States
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| ; Entergy Services sought review domestic-¢tility companies under a tracking, designed to. protect the maybe requiredo. transfer -toother
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| .other parti§ sought- t overtumn FERC's other companies from certain unexpected increases in fuel costs. The conditioned the Merger to protect decisions on various grounds, including issues as to whether FERC appropriately uasssion taiff to mitigate. any various igterested parties from alleged harm. and FERC's reliance on EnWergy's that the cases be held in abeyance potential anticompetitive impacts of the Merger. The D.C. Circuit has ordered gs on Entergy's:transmission tariff (see pending. FERC's issuace. -,of-a, final order on remand in the proceeý*
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| Rate Matters - Wholesale Rate Matters discussion qf tariff case,in "'RATE MATTERS ANSD REGULATION -
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| Open Access Transmissiof"above)..
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| Arkansas, EntergyGulf States, Entergy Louisiana, Entergy Employment Liti aat0n ('(tergy.Corporation, Entergy Mississippi, and Entergy New Orleans) lawsuits that have been Entergy Corporation and the. domestic utility companies are defendants in numerous basis of di.scriminaed against on the filed by former employees alleging that they were wrongfully terminated and/or are vigorously defending these suits age, race, and/or sex- .Entergy Corporation and the domestic utility companies.
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| as to the outcome of these cases.
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| and deny any liability to the plaintiffs. However, no assurance can be given
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| -23 -
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| Asbestos and Hazardous Waste Suits (Entergy Gulf States)
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| Several lawsuits have been filed on behalf of plaintiffs in state and federal courts in Texas and Louisiana that seek relief from Entergy Gulf States as well as numerous other defendants for damages caused 16 the plaintiffs 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 complete how many of the plaintiffs in any of the foregoing cases actually worked on Entergy Gulf States' premises. Entergy Gulf States believes that the ultimate resolution of these matters will not be material, in the aggregate, to its financial position or iesults of operations.
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| Union Pacific Railroad (Entefgy Corporation and Entergy Arkansas)
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| In October 1997, Entergy Arkansas and Entergy 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 Pacific's failure to meet its contractual obligations torship coal to Entergy Arkansas' two coal-fired plants. The lawsuit also alleges that such failure has impaired Entergy Arkansas' ability to-generate and:sell electricity from these plants. The case has been transferred to the-United States District Court for,the District of Nebraska.: In January 1999, on cross motions for summary judgment, the court ruled that Union Pacific has breached obligations iunder the contracts. Under the court's ruling, if the breaches'of the contracts by Union Pacific are proven at trial to bermaterial, rescission of the contracts is available to Entergy as a remedy, in addition to the monetary 'damages to be awarded.
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| Aquila Power Corporation (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans)
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| In March 1998, Aquila.'Power Corporation ("uiila') filed. a complaint -with FERC against'Entergy "Services, as agent for the domestic- utility companies, alleging that the domestic utility companies- improperly reserved transmission capacity on Entergy's transmission system, resulting in the denial of Aquila's request for transmission service. Aquila's complaint seeks compensation for lost profits, an order prohibiting Entergy and/or its affiliates from engaging in similar conduct, and suspension of the domestic utility companies', and EPMC's market 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 Entergy. Inadditioti to its requests in its original complaint, Aquila's amended complaint seeks a finding by FERC that Entergy is in violation of FERC Orders No. 888 and 889, and an order that Entergy should be -required to join or agree to the formation of an'independent system operator. ' Entergy' filed 4its response to the amended and restated complaint in July 1998, denying the alleged improper conduct, and also moved to dismiss Aquila's complaint in September 1998. Aquila has responded, and no hearing date has been set by FERC.
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| Ratepaver Lawsuits (Entergy Corporation, Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans)
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| In May, 1998, a :group of ratepayers filed a complaint against Entergy Corporation, Entergy Power, and Entergy Louisiana in state coutt in; Orleans Parish purportedly on behalf of all tntergy Louisiana ratepayers. 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.
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| Among other things, plaintiffs allege that Entergy Louisiana improperly introduced certain costs into the calculation of the fuel charges, including imprudently purchased high-cost electricity from 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 attorney fees. Exceptions have been filed by Entergy, asserting that this dispute should be litigated before the-LPSC and FERC. At the aippropriate time, if necessary, Entergy will raise its defenses to the antitrust claims. At present, the suit in state couirtis stayed by stipulation of the parties.
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| 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
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| -24 -
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| Group
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| .improperly included in ihose -fuel adjustment filings. Marathon Oil Company and Louisiana Energy Users been conducted and is expected to have also intervened -inthe -LPSC,ýproceeding._ Discovery at the LPSC has 1999. In their testimony continue. Direct testimony wasý filed with theLPSC by plaintiffs and the intervenors in July totaling $544 for the period 1989 through 1998, plaintiffs purport to:,quantify many of their claims in an amount damages for the period 1974 through 1988. The million, plus interest. The plaintiffs; will likely assert additional Rebuttal testimony by the plaintiffs Entergy companies filed responsive and rebuttal testimony .in September 1999..
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| be filed in April 2000, to and intervenors was filed in November 1999. Direct testimony of the LPSC staff will 2000.
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| which Entbrgy will be permitted to respond. Hearings before the LPSC are scheduled to begin in September Entergy intends to defend this matter vigorously, both in court and at the LPSC. The outcome of the lawsuit this,: other and the LPSC proceeding cannot be predicted. at this time., Management has provided- reserves for of these litigation, and Entergy Louisiana's formula rate plan proceedings based on its estimate of the outcome proeedngs. Infriati on on forniqla, rate plan proceedings is give6n in Note 2 to the financial statements.
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| In April1l999, a groupi~ofratepayers filed a complaint- against Entergy: New Orleans, Entergy Corporation, New Entergy. Services,.: an4'-Entergy Pd~ve -ini state court in Orleans. Parish purportedly on. behalf of all Entergy 11plaintiffs~ sseek treble damages, for alleged. injuries arising f-rom the -defendants' alleged Orleans- rateliayers. Th New violations of Louisiana's antitrust laws in connection with certain costs passed on to ratepayers inEntergy allege that Entergy New Orleans Orleans's fuiel adjustment filings with the Council. In particular, plaintifib imiproperly included certain costs in the calculation of' fuel charges and that Entergy New Orleans imprudently and the other purchased high-cost fuel from other Entergy affiliates. Plaintiffs allege that Entergy New Orleans ratepayers defendant Entergy companies conspVWe to make these purchases to the detrimnwt 'of Entergy New Orleans' of Louisiana's antitrust laws. Plaintff also seek to recover
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| 'and to the bueneft of Eatejtgy's shareholders, in violation ohr were filed -by Entergy,. asserting, among interest-..And lsdorey.fees. -Exceptidns to the plaintiffs' allegations If necessary, at! fth appropriate time, things, that Jurisdiction'.-ver-these. issues rests;-mith thmiCounpil. 'and FERC.
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| is stayed by stipulation
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| .Entergy willralsb raise its defenses, to the ntitrust claims. s4t preent; the suit in state court oftheparties.;i their
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| 'Plaintiffs. als6, filed this.,complaint With the Councild'n order to initiate a review by the Council of were improperly and imprudently included in allegations and to force restitution to ratepayers of all costs they allege Council. The plaintiffs have not yet the fuel adjustment filings. Discovery has begun in the proceedings before the and before stated the amount of damages they claim. Entergy intends to defend this matter vigorously, both in court
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| -the Council. The ultimate outcome of the lawsuit and the Council proceeding cannot be predicted at this time.
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| In Aprfiu1998,ý a group of, residential- and business ratepayers filed a&complaint against Entergy New. Orleans that in state c~uttlInOrleans Parish ýpurportedly on behalf of all ratepayers in New Orleans. Thbe plaintiffis'allege on Inviolation of limits Enterg New; Grl~atis has overcharged ratepayers. by at least $300 million since 1975 the Council in Entergy New Orleans'rate of return that the plaintiffs; allege were established by ordinances passed by have been
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| *.1922.. Th~eplaintiffs seek,:anamng dfthr things,; (i) a declzaratory judgmnent that such fr-anchise ordinances of thw amnount of overcharges, plus interest. Entergy violated; and' (ii) ileftituid totlie Council for the establishment charged, onl those rates authorized by aNew'Orleans, lb.ieves the lawsuit; is. without merit. -Entergy New :Orleans.%has itself in the lawsuit.:
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| the Coilficit in acodancwt applicable law. -Entergy New- Orleans is vigorously defending
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| 'In May, 1l998i &~group ofiratepayerstfled a complaint against Entergy Louisiana in state court in East Baton the formula Rouge Parish purportedly' on behalf of all. Entergy Louisiana ratepayers. The plaintiffs allege that excess of a fair return.
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| ratemaking plan authorized by the LPSC has allowed Entergy Louisiana to earn amounts in is an improper The plaintiffs seek, among other thing, (i) a declaratory judgment that the formaula. ratemaking plan charged in excess of proper ratemaking practices.
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| ratemaking practice; and (Hi) a refund of the amounts allegedly Entergy Louisiana believes the lawsuit is without merit and is vigorously defending itself.
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| On February 29, 2000, a lawsuit was commenced -in -the Civil District Court for -the Parish of Orleans, to power Louisiana, against Entergy, Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans relating situated persons, outages that occurred; in.July 1999. -The plaintiff, wha purports to represent a class of similarly
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| -25 -
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| claims unspecified damages as a result of these outages, which the plaintiff claims were the result of,negligence on the part of the Entergy defendants. Entergy, Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans have not yet filed responsive pleadings in the case. However, they will vigorously contest the: plaintiff's allegations, which they believe do not support any-liability to the plaintiff for damages.
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| Cajun - Coal Contracts (Entergy Corporation and Entergy Gulf States)
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| A discussion of this litigation is included under the caption "Cajun-Coal Contracts" in Note 9 to the financial statements.
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| Franchise Fee Litigation .(Entergy Corporation and Entergy Gulf States)
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| In September 1998i 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 underpaying its franchise fees due to failure to properly calculate its gross receipts. The plaintiff seeks a judgment for-the allegedly underpaid fees and punitive damages. ,Entergy Gulf States believes the lawsuit is,-without merit and is vigorously defending itself.
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| Fiber Optic Cable Litigation (Entergy Corporation, Entergy Ciulf States)
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| In May 1998, a group of property owners filed a petition against Entergy Corporationý Entergy*Gulf States, Entergy Services, and ETHC in state court in Jefferson County, Texas purportedly on behalf of altproperty owners throughout the Entergy service area who have conveyed easements; to the defendants. : The, lawsit, alleged that Entergy installed ,fiber optic cable across their property without obtaining appropriate easementsr_*The plaintiffs sought actual damages for the useof the land and a share, of the profits made through-use of the fiber 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 and that there is no basis for the claim seelking a share of profits.
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| Franchise Service Area Litigation (Entergy Gulf States)
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| In early 1998, Beaumont Power and Light Company (BP&L) unsuccesfully sought a franchise to provide electric service in the City of Beaumont, Texas, where Entergy Gulf States already holds a franchise. In November 1998, BP&L filed a requestCbefore the PUCT to obtain a certificate of convenience and necessity.(CCN) for those portions of Jefferson County outside the boundaries of any municipality for which Entergy Gulf Stalbs-provides retail electric service. BP&Ls application contemplates using Entergy Gulf States', facilities. in their pfovision of service.
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| In Texas, utilities are required to obtain a. CCN prior to providing retail electric service.,. -Jefferson County is currently singly certificated to Entergy Gulf States. If BP&L!s application is granted, BP&L would be able to provide retail service to Entergy Gulf States' customers in the area for which the certificate would apply. BP&L has amended its application. to add a request for a CCN to provide retail electric servic within the City of Beaumont.
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| The amended application acknowledges that the Texas electric utility restructuring law requires BP&L to use its own facilities to connect to its customers if it: is granted a CCN, A hearing on the merits was conducted in December 1999, and the ALJ is expected'to issue a recommendation in for consideration by the PUCT.
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| Hindusthan Developm-ent Corporation. Ltd. (Entergy Corporation).
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| In January 1999, Hindusthan Development 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) tadevelop a 350 MW cogeneration plant to be built in Bina, India. HDC also alleges that EPAL wrongfully withdrew as lead developer.
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| 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 unspecified damages of $1.1 billion. EPAL is vigorously defending itself in the arbitration proceeding.
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| Ice Storm Litigation (Entergy Corporation and Entergy Gulf States) filed a lawsuit against Entergy In January 1997, a group of Entergy Gulf States customers in Texas in state court in Jefferseq County, Texas Corporation, Entergy Gulf States, and other Entergy subsidiaries in a January 1997 ice who sustained outages purportedly on behalf of all Entergy Gulf States customers in Texas its electrical distribution system and respond to storm; The lawsuit alleges that Entergy.failed to properly maintain Entergy has appealed the class certification, and the ice storm. The district court certified the class in April 1999.
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| believes that the lawsuit is without merit and is arguments on the appeal, werp heard in February ,P00. Entergy in 1997, in which class certification was denied.
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| vigorously defending itself. A qimilar lawsuit wvsfiled in Louisiana Entergy Gulf States, Entergy Louisiana, Entergy Litination Environment (Entergy Corporation, Enter.y Arkansas, Mississippi, Entergy New Oep.s, and System Enrgy) in particular Louisiana, Mississippi, and The four states in w4ich the domestic utility companies operate, juries in Lodisiana, Mississippi, and Texas Texas, have proven to be unusually litigious environments. Judgeg and damages, to plaintiffs in personal injury, have demonstrated a willingness to grant large verdicts, including punitive means to contest litigation threatened property damage, and business tort cases. Entergy uses legal and appropriate significant business risk.
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| or filed against it, but the litigation environment in these states poses a AND SYSTEM ENERGY EARNINGS RATIOS OF DOE"TIC UMITY COMPANIES to.fixed charges and ratios of The domestic utility companies' and System Energy's ratios of earnngs to Item 503 of SEC Regulation S-K are as earnings to combined fixed charges and preferred dividends pursuant follows: "
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| ...Ratio§.ofEarnings to Fixed.Charges:.
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| Years Ended December 31.
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| 1999 1998 1997 1996 1995 2.08 2.63 2.54 2.93 2.56 Entergy Arkansas 1.86 2.18 1.40 1.42 1.47 Entergy Gulf States 3.18 3.48 3.18 2.74 3.16 Entergy Louisiana 2.92 2.44 3.04 2.98 3.40 Entergy Mississippi 3.93 3.00 2.59 2.70 3.51 Entergy New Orleans 2.07 1.90 2.52 2.31 2.21 System Energy Ratios of Earnings to Combined Fixed Charges and Preferred Dividends Years Ended December 31.
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| 1999 1998 1997 1996 1995 1.80 2.28 2.24 2.44 2.12 Entergy Arkansas 1.86 1.20 1.23 1.19 1.54 Entergy Gulf States(a) 3.09 2.75 2.36 2.64 2.60 Entergy Louisiana 2.18 2.73 2.69 2.95 2.51 Entergy Mississippi 2.74 2.36 2.44 3.22 3.56 Entergy New Orleans on preference stock.
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| (a) "Preferred Dividends" in the case of Entergy Gulf States also include dividends BUSINESS SEGMENTS Enterev Corporation Entergy's business segments are discussed in Note 14 to the financial statements.
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| Enterm New Orleans As of December 31, 1999, Entergy New Orleans operating revenues and customer data was as followsý Electric Operating NaturatlGas Revenuie: !Reveuue Residential 40% 536%
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| Commercial 3%
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| Industrial 7%
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| Govermnental/Municip , 16% ,17%,
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| Number of Customers: 1O5,00.a. . .146,000 I' Enterfy Gulf States For the 3Aei enddi December 31, 1999, 989% of Eter*gy Ot Sttes' operating revehne was derived from the electric utility business. Of the remaining operating revenues, one percent was derived from the steam business and one percent from the natural-gas business.
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| Financial Information Relating to Products and Services Financial information relating to Enitergy New Orleans' and Entergy Gulf States' products and services is presented in their respective_ financial.; statements.
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| PROPERTY Generatine Stations Domestic Utility Companies and System Energy 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:
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| Owned and Leased Capability MW(1)
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| * Gas Turbine ia-d Internal-.
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| CoMp Total Fossil Nuclear Combustion Hydro s 4,487 (2) 2,681 1,694 42 70 Enter'ygy.,
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| ntryGifStates. 6,649 ý(2) 5,ý753, ý.r36ý
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| .Eg Lou na ..... 5,561, (2) -4,467( - 1075 19
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| ,Entfrgy Mississippi:- 3,063 (2) 3,052 - - 11 EntergyNew Orleans 1,07-7 1,061 'I - 16 System Energy 1,084 - : IO4 "
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| Total 21,961 17,014 4,789 88 70 C
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| qwned and Leased Capability" is the*dependab"e load crryng .,, iity As. demo"strated under actual
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| ().
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| .,9peratng con-i*t. ba*edonpth..e rimary: fuel (assunrig no curtailments) that each station was designed to utilize Excludes the capac of fossil-fueled generating stations placed on extended reserve-1shutdown as follows:
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| (2) 'Entergy r sa 204 MW*;siana 9 MW; and Entergy Mfississippi -.73 MW. Genertn.saio hta~ntepce to beutilized in #w7 near-term. to meet load requirements are placed in exteded reserve shut*1Qw in order to minu~n w 9peati* g exeses.,.
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| Entergy's load and capacity projtons reviewed periodically to assss the nd aiidimin for additional of new loads, and generating capacity and interconnections in light of the availability of power, the location na.in m econol En:trgy, )Whenh the dxe-ti utility cQ.Vpaes requre-new ger.ton resources based on load
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| -power availability,. tey do by, not,expe to construct pewx base load generating and* apabi.ity
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| * capacty:. i~ they .andbulk b prectio-s *tomeet fu~tur a pd among other thin..gs, purchasingpow in the wholesale power market r*vmg _or stationsofrom extended reserve shutdown. Currently, plans are being implemented to reactivate several units that are in extended reserve shutdown. The units, once back on line, will provide an additional 417 MW of capacity to serve customers during peak demand.
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| *e ms of the System A.
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| der *the geneqt.. c ity n.rc**t,other power resources are shared among the domnestic utilit mpani. Th SystemA. reement provides, amoig..9ther things, that parties having generating reserves greater than their load requirements (long companies) shall receive payments from those parties having deficiencies in generating reserves (short companies). Such payments are at amounts sufficient to cover certain of the long. companies' costs, including operating e penses. fixed charges on debt, dividend requirements on preferred and preference stock, and a fair rate of return on common equity sm et Under the, System Agreement, these charges 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
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| -29 -
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| associated costs. FERC proceedings relating to the System Agreement are discussed more thoroughly in "RATE MATTERS AND REGULATION - Rate Matters - Wholesale Rate Matters - Sysm AgreMnt," above.
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| Entergy's domestic utility business is subject to seasonal fluctuations, with the peak period occurng in the summer months. The 1999 (and all-time) peak demand of 20,664 MW occurred on August 18, 1999.
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| Competitive Businesses Entergy Power owns 665 MW of fossil-fueled capacity at the Ritchie 2 and Independence plants.
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| In July 1999, Entrgy's non-utility nuclear power business purchased from Boston Edison the 670 MW Pilgrim Nuclear St~t~? 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.
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| Entergy's g pob.l power development business is constructing two comnbined-cycle 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 Chemical's nearby complex with the remaining electricity to be sold into the UK national power pool.
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| Originally scheduled for commercial operation in January 2000, Saltiend's completion has-been delayed due to construction problems at the site. The construction contractor has submitted a revised constructionschedule after substantial analysis, .and currently estimates a phased-in completion of the three-unit plant withithd full plant in service by June 30, 2000. The second plant, an 800 MW facility known as Darnhead Creek, is located in southeast England. It is expected to begin commercial operation in the fourth quarter of 2000.
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| Interconnections The electric generating facilities of the domestic utility companies consist principally of steam-electric production facilities. These generating:units arb interconihected by a transmission system operating at various voltages up to 500 KV. With theý 6chption of a'.fiall portion of Ent~rgy Mississippi's capacity, operating facilities or interests therein generally are owned or leased by the domestic utility company serving the area in which the generating facilities are located. All of these generating facilities are centrally dispatched and operated.
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| The electric generating facilities of Ent6rgy'sg non-utility- nuclear power business consist of the Pilgrim nuclear production facility.' The facility has firm totalbutput power purchase agre6ments' with Boston Edison and other utilities that expire at the end of 2004. The Pilgrim plant is dispatched as a part of the New England Power Pool (NEPP). The primary purpose of NEPP is to direct the operations of the major generating and transmission
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| *facilities in the New England region.
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| Entergy's domestic -utility companies are interconnected with many neighboring utilities. In- addition; the
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| * domestic! utility companies are members of the Southeastern Electric Reliability CouncAI(SERC). The primary purpos'e of SERC is to ensure. the reliability and adequacy of the electric bulk power supply in tlik southeast region of the United States. SERC is a member of the Notth'Anierican Electric Reliability C0bcil.
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| Gas Proverty As of December 31, 1999, Entergy New Orleans distributed and transported natural gas for distribution solely within the limits of the City of New Orleans through a total of '1,453 miles of gas distributionmaihs and 41
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| 'miles of gas transmission pipelines.
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| As of December 31, 1999, the gas properties of Entergy Gulf States, which are. located in and around Baton Rouge, Louisiana, were not material to Entergy Gulf States.
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| Titles The generating stations and major transmission' substations of 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 fianchises. The rights of each company in the property on which its utility facilities are located are considered by such companyto be adequate for use in the conduct of its business.
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| Minor defects and irregulaites customarily found in properties of like size and character may exist, but such defects and-irregularities do not, in the op-inio of anagdment, materially impair the use of the properties affected thereby.
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| The domestic utility companies generally have the right of eminent domain, whereby they may, if necessary, perfect or secure titles to, or easements O& servitudes on, privately held-lands used in or reasonably necessary for their utility operations.
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| Substantially all of the physical properties tind assets owned by. Entergy Arkansas, Entergy Gulf States, Entergy'Lodsiana, and'System Energy are subject to'the liens of mortgages securing the first mortgage bonds of such company.. Thc L s Creek generating station is owned by GSG&T, Inc., a subsidiary 0f Entergy Gulf States, and 'isnot kubjectto the fien'dftth'Etitergy Gulf States mortgage securing the first mortgage bonds of Entergy Gulf States, butigIl 1t6 arid operated by Entergy Gulf States.': All ofthe d&bt outstanding under the original first mortgages of Entergy Mississippi .and:Entergy N&w Orleansý has been 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.
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| "FUELSUPPLY The sources of genet and'average fuel cost per KWH for th6 dohiestic utility companies and System Energy fortheYbars 1997-4999 where:'
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| Nafural Ga Fuel Oil Nuclear Fuel Coal
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| 'Cents Cents, % Cents % Cents
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| .f- per of Per ofb Per of Per Year Gen KWH Gen KWH Gen KWH Gen KWH 1999 -'45 2.75 4 2.06 35 .54 16 1.59 1998 40 2.50 6 2.37 40 .53 14 1.67 1997 39 '2.97 4 3.11 41 .54 16 1.73 Actual 1999 and projected 2000 sources of generation for the domestic utility companies and System Energy are:
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| Natural Gas Fuel Oil., Nuear Coal 1999 2000 1999 2000 1999 2000 1999 2000 Entergy Arkansas (a) 10% 7% - 56% 40% 33% 52%
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| Entergy Gulf States 66% 68% - - 19% 18% 15% 14%
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| Entergy Louisiana 64% 62% 1% - 35% 38% -
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| Entergy Mississippi 44% 53% 30% 23% - - 26% 24%
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| 91% 100% 9% - -
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| Entergy New Orleans System Energy - - - - 100 0/6(b) 100%(b) -
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| Total (a) 45% 42% 4% 2% 35% 33% 16% 22%
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| (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.
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| (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 Arkansas 36%; Entergy Louisiana - 14%; Entergy Mississippi - 33%; and Entergy New Orleans - 17%.
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| Natural Gas The domestic utility companies hae long-term frm andshortterm in ruptible gas contracts. Long-term firm contracts comprise less than 26% of the dqmestic utility companies' total requirements but can be called upon, if necessary, to satisfy a significant percentage of the domestic utility companies' needs. Short-;erm contracts and spot market purchases satisfy additional gas requirements, Entergy Gulf States has4 tr.*mportatipb service agreement with a gas supplier that provides flexible natural gas service to ceqain generating stations by using such supplier's pipeline and gas storage facility.
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| Many factors, including wellhead deliverability, storage and pipeline cacity, and. demand requirements of end users, influence the availability and price of natural gas supplies for power,plants., DemandJs. 4We to vweather conditions as wye as to the prices of. 6ther energy sources. Supplies of natr gas are expected to.b*. .duate in 2000, Howeveor, pursuant to federal and state regulations,gas supplies power plants nay be imterrpted during periods of shortage. Tolthe extent natural gas supplies may be disrupte, the domestic utility ompapies will use alternate fuels, such,as oil, or rely to a larger extent prn coal ad nuclear generatio* n Coal . .
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| Entergy Arkansas has long-term contracts for low-sulfur Wyoming coal for White Bluff and Independence.
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| These contracts, which expire in 2002 and 2011L 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 supply of low-sulfur Wyomi4g coal for Nlson U ,.iwich should be .ufficient to satisfy its fuel requirements for that unit through 2010 if all price reopeners ge accepted. If botk~partes, cannot agree upon a price, then the contract terminates. Effective April 1, 2000, Louisiana Generating LLC will assume Cajun's 58% ownership interest in the Big Cajun generating facilities andwil qpe:rqtethe plant. The management of Louisiana Generating LLC has advised Entergy Gulf States that it has oxecuited coal supply and transportation contracts that should provide an adequate supply, of coal for the operation .f Big Cajun 2, Unit 3 for the foreseeable future.
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| Entergy Arkansas has a long-term railroad 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 - Regulation Other Regulation and Litigation - UnionPacific-Railroad" above). ,,.
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| Entergy Gulf States has a transportation requirements contract with a railroad to deliver coal to Nelson Unit 6 through December 31,2004. This contract specifies a minimum anmial tonnage amounting to approximately oine-half of the plant's requirements and provides flexibility for shipping Up'to all ofthe plant's requirements.
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| Nuclear Fuel The nuclear fuel cycle involves the following:
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| "o mining and milling of uranium ore to produce a concentrate; "o conversion of the concentrate to uranium hexafluoride gas; "o enrichment of the hexafluoride gas; "o fabrication of nuclear fuel assemblies for use in fueling nuclear reactors; and "o disposal of spent fuel.
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| System Fuels is responsible for contracts to acquire nuclear material to be used in fueling Entergy Arkansas',
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| 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
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| :by Entergy's non-utility nuclear power business.
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| 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 significant percentage of these materials and services over the, next several years. Additional materials and services required bcyond the coverage of these contracts are expected to be available at a reasonable cost for the foreseeable future.
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| 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 provides for the d4ipq* of spent nuclear fuel or high level waste by the DOE. There is a discussion of spent nucleairfuel disposal iinNote 9 to the financial statements.
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| It will be necessary for Entergy to enter into additional arangements to acquireear fuel in the future. It is not possibleto predict the ultimate cost of such arrangements.
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| Entergy Arkansas,, -Entergy Gulf States, Entpy Louisiana, and System F.nergy 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.
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| Naiural Gas Purchased for Resale:'
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| Entergy New Orleans has several suppliers of natural gas- Its system is iontponneced with three interstate and three itatate pipelines. Entergy New Orleans' primary suppliers currently are Columbia Energy Services, Inc.
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| (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 Entergy New Orleans gas delivery at any point after the agreed gas volume has been met. The CES gas supply is transported to Entergy New Orleans pursuant to a transportatiou service agreement with Koch Gateway Pipeline Company (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 pimarily to weather-relatW curtailments. However, Entergy New Orleans experienced no such curtailments in 1999.
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| As a result of the implementation of FERC-mandated: 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 transportation capacity only in the event of pipeline system constraints. Based on the current supply of natural gas, and absent extreme weather-related curmtailments, Entergy New Orleans does not anticipate any interruptions in natural gas deliveries to its customers.
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| Entergy Gulf States purchases natural gas for resale under an agreement with Mid Louisiana Gas Company.
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| Mid Louisiana Gas Company is not allowed to discontinue providing gas to Entergy Gulf States without obtaining FERC approval.
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| Research Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans are members of the Electric Power Research Institute (EPRl). 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 Entergy's needs and available resources. Entergy'and its subsidiaries contributed approximately $6 million in 1999,
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| $8 million in 1998, and $9rmillion in 1997 to EPRI and other research programs.
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| Item 2. Properties Information regarding the properties of the registrants is included in Item 1. "Business - PROPERTY," in this report.
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| Item 3. Lezal Proceedinns Details of the registrants' material rate proceedings, environmental regulation and proceedings, and other regulatory proceedings and litigation that are pending or that terminated in the fourth quarter of 1999 are discussed in Item 1. "Business - RATE MATTERS AND REGULATION," in this report.
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| Item 4. Submiission of Matters to a Vbte of Securit' Holders During the fourth quarter of 1999, no matters were submitted to a vote of the security holders of Entergy Corporation,: Entergy' Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, or System Energy.
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| DIRECTORS 'AND EXECUTIVE OFFICERS OF ENTERGY CORPORATION Directors Information required by this item concerning directors of Entergy Corporation is set forth under the heading "Proposal 1-Election of Directors" contained in the Proxy Statement of-'Entergyr Corporation, (the 'Proxy Statement'), to be filed in connection with its Annual Meeting of Stockholders to be held May 12, 2000, ("Annual Meeting'), and is 'incorporated herein by reference. Information required by this' item concerning officers and directors of the remaining registtants is reported in Part III oafthis document.
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| Executive Officers Name Age- Position Period J. Wayne Leonard (a) "0 'ChiefExecutive Officer and Director of Entergy Corporation 1999-Present Director of Enturgy Arkansas, Entergy Gulf Staltes, Efitergy 'Louisiana, 1998-1999 Entetg Mississippi, Entergy New Orleans,- and System Energy President and Chief Operating Officer of Entergy Corporation. 1998 Chief Operating Officer of Entergy Arkansas, Entergy Gulf States, 1998 Entergy Louisiana, EF#tergy Mississjppi, and Entergy New Orleans Vice Chairman of Entergy New Orleans 1998 President of Energy Commodities Strategic Business Unit 1996-1998 "Presidentof Ciner6y Capital & Trading 1996-1998 Group Vice President and Chief Financial Officer of Cinergy 1994-1996 Corporation Jerry L. Maulden (a) (b) 63 Vice Chairman of Entergy Corporation 1995-1999 Vice Chairman of Entergy Arkansas, Entergy Gulf States, Entergy 1993-1999 Louisiana, Entergy Mississippi, and Entergy New Orleans Chief Operating Officer of Entergy Arkansas, 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 Director of Entergy NewOrleans 1991-1998 Director of Entergy Mississippi 1988-1999 Director of System Energy 1987-1998 Director of Entergy Arkansas 1979-1999 Name Position Period 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 Chief Nuclear Operating Officer of Entergy 1997-1998 Corporation, Entergy Arkansas, Butergy Gulf States, and Entergy Louisiana Executive Vice President and Chief Nuclear Officer of Entergy 1994-1997 Corporation Executive Vice President - Nuclear of Entergy Arkansas, Entergy Gulf 1994-1997 States, and Entergy Louisiana ChiefExpcutive Officer and Presidentof System Energy 1992-1998 Director of Entergy Gulf States 1993-Present Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, 1992-Present and System Energy Director of Entergy New Orleans 1999-Present 1992-1994 Jerry D. Jackson (a) 55 Executive Vice President of Entergy Corporation 1999-Present President and Chief Executive Officer - Louisiana of Entergy Gulf 1999-Present States President and Chief Executive Officer of Entergy Louisiana 1999-Present CbiefAdministrative Officer of Entergy Corpoation, Entergy Arkansas, 1997-1998 "EntergyGulf States, Entergy Louisiana, EntergyýMississippi, and Entergy New Orleans.
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| Executive Vice President - External Affoirs of Entergy Arkansas, 1995-1998 Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans Executive Vice President - Marketing of Entergy Arkansas, Entergy Gulf 1995 States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans Executive Vice President - External Affairs of Entergy Corporation 1994-1998 Director of Entergy Gulf States., - ., ý i, 1994-Present Executive Vice President ofMarketing of Entergy Corporation 1994-1995 Director of Entergy Louisiana 1992-Present Director ofEntergy Arkansas, 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 of Entergy 1998-Present Co. oration, Entergy .ntergy Arkansas. 1(uf .tates, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy Director of Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, 1999-Present 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 Assistant Treasurer of Shell Oil Compagy 1992-1995 Frank F. Gallaher (a) 54 Senior Vice President, Generation, Transmission and Energy 1999-Present Management of Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy Executive Vice FPes.ident and Chief Utility Operating Officer for Entergy 1998-1999 Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans Group President and Chief Utility Operating Officer of Entergy 1997-1999 Corporation "
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| 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
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| -35 -
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| Name Ame Position Period President of Entergy Gulf States 1994-1996 Director of Entergy Gulf States 1993-1999 Executive Vice President of Operations ofEntergy Arkansas, Entergy 1993-1997 Louisiana, Enteigy Mississippi, and Entergy New Orleans 59 Senior Vice President and General Counsel of Entergy Corporation 1992-Present Michael G. Thompson (a)
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| Senior Vice President, General Counsel, and Secretary of Entergy 1995-Present Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans Secretary ofEntergy Corporation 1994-Present Joseph T. Henderson (a) 42 Vice President and General Tax Counsel ofEntergy Corporation, 1999-Present Entergy Arkansas, Entergy Gulf States, Eterg Louisiana, Entergy Mississippi, Entergy New Orleans and System Energy Associate General Tax Counsel 1998-1999 Senior Tax Counsel 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 Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi. Entergy New Orleans, and System Energy Director of Tax Services of Entergy Services 1993-1998 Steven C. McNeal (a) 43 Vice President aýd Treasurer of Entergy Corporation, Entergy Arkansas, 1998-Present Enter Gulf States, Entergy Louisian, Entergy Mississippi, Entergy New Orleans, and System Energy Assistant Treasurei of Entergy Arkansas, Entergy Gulf States, Entergy 1994-1998 Louisiana, Ente*gy-Mississippi, Entergy New Orleans, and System Etaegy Director of Corporate Finance of Entergy Services 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.
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| (b) Mr. Maulden retired effective December 31, 1999.
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| Each officer of Entergy Corporation is elected yearly by the Board of Directors.
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| PART II Item 5. Market for Registrants' Common Equity and Related Stockholder Matters Entergy Corporation The shares of Entergy Corporation's common stock are listed on the,New York Stock, Chicago Stock, and Pacific Exchanges.
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| The high and low prices of Entergy Corporation's common stock for each quarterly period in 1999 and 1998 were as follows:
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| 1999 1998 High Low jjgh Lo (In Dollars)
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| First 31 1/8 27 1/2 30 1/8 27 5/16 Second 33 1/8 273/4 29 5/8 23 1/4 Third 31 9/16 28 3/16 30 13/16 26 3/16 Fourth 30 23 7/8 32 7/16 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.
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| As of February 29, 2000, the.re were 73,619 stockholders of record of Entergy Corporation.
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| Entergy Corporation's fitur ability to pay dividends is discussed in Note S to thefinancial stateme nts. 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 by, such subsidiaries...
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| Entergy Corporation, Entergy Arkansas, Entergy, GqWdf States, Entergy Louisiam. E-atergy Mississippi, Entergy New 0Orleans, and.4ystepu 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 fol pws,:.
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| 1999: 1998 (In Millions)
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| Entergy Arkansas S$1827; $9. . .
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| Entergy Gulf States. $ 107.0. 1. 109.4 Entergy Louisiana $J,97.0i. $.138.5 Entergy Mississippi $ 34.1 $ 66.0 Entergy New Orleans $ 26.5 $ 9J7 System Energy $ 75,0 $ 72.3 ETHIC $ 10.0' .
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| Information with respect to restrictions that limit the ability of System Energy and the domestic utility companies to pay dividends is preveuted in Note 8 to the financial statements.
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| Item 6. Selected Financial Dat Refer to "SELECTED FINANCIAL DATA -FIW-,YEAR COMPARISON OF. JENTERGY CORPORATION AND SUBSIDIARIES,. ENTERGY. ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, EN.TERGY MISSISSIPPI,. ENTERGY NEW ORLEANS, and SYSTEM ENERGY" which follow each company's financial statements in this report, for information with respect to operating statistics Item 7. Manafe~ment's Discussion and Analysis of Financial Condition and Results of On~erations Refer to "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - LIQUIDITY.-AND CAPITAL RESOURCES," " - SIGNIFICANT FACTORS AND KNOWN TRENDS," and "- RESULTS OF OPERATIONS OF ENTERGY, CORPORATION AND SUBSIDIARIES, -ENTERGY ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, and SYSTEM ENERGY."
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| Item 7A. Ouantitative and Oualitative Disclosures About Market Risk Entergy Corporation and Subsidiaries. Refer to information under the heading "ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
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| - SIGNIFICANT FACTORS AND KNOWN TRENDS."
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| Item 8. Financial Statements and Supplementary Data.
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| INDEX TO FINANCIAL STATEMENTS A
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| Entergy Corporation and Subsidiaries:
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| Report of Management, 40 Management's Financial Discussion and Analysis 41 Report of Independent Accountants 54 Management's Financial Discussion and Analysis 55 Consolidated Statements of Income For the Years Ended December 31, 1999.1998, and 1997 63 Consolidated Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 64 Consolidated Balance:Sheets; December 31, 1999 and 1998 66 Consolidated Statements of Retained Earnings, Comprehensive Incomrnj and Paid-InCapital for the Years 68 Ended December 31, 1999, 1998, and 1997 Selected Financial Data - Five-Year Comparison - . 69 Entefty Arkansas, Inc ....
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| Report of Independent Accountants 70 Management's Financial Discdss~ion andAAialyis 71 Income Statements For the Years: End*d*December 31, 1999, 1998, and 1997 74 Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 75 Balance Sheets, December 31, 1999 and 1998 76 Statements of Retained Earnings fohthe Years Ended December 31, 1999,41998, and 1997 78 Selected Financial Data - Five-Year Comparison 79 Entergy Gulf States, Inc.:
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| Report of Independent Accountants 80 Management's Financial Discussion and Analysis 81 Income Statements For the Years Ended December 31, 1999, 1998, and 19971 85 Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 87 BalanceSheets, December 31, 1999(and 1998 88 Statements of Retained Earnings for the Years Ended Decembei 31, 1999, 1998, and 1997 90 Selected Financial Data - Five-Year Comparison 91 Entergy Louisiana, Inc.:
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| Report of Independent Accountants 92 Managemejit's Financiaf Discussion and Analysis 93 Income Statements For the Years Ended Decefhber 31, 1999, 1998, and; 1997. 96 Statements of Cash Flows For tht-Years Ended December 31, 1999, 1998, and 1997 97 BalancelSheets; December 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 Mississippi, Inc.:
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| Report of Independent Accountants 102 Man 'ment's Financial Discussion and Analysi's 103 Income Statements For the Years Ended December 31, 1999, 1998, and 1997- 106 Statements of Cash Flows For the Years Ended December 31, 1099, 1998, and 1997 107 Balance Sheets, December 31, 1999 and 1998 ,
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| * 108 Statements of Retained Earnings for the Years Ended December 31, 1999, 1998; and 1997 110 Selected Financial Data - Five-Year Comparison IIl Entergy New Orleans, Inc.:
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| Report of Independent Accountants 112 Management's Financial Discussion and Analysis 113 Inopoq Statements For the Years Ended December 31, 1999, 1998, and 1997 116 Statements. of.Cash Flows For the Years Ended 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 Selected Financial Data - Five-YearComparison 121 SymtenEnergy Resburces, Inc.:
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| Report of IndetoendentAcuntants 122 Magement's Financial Discussion and Analysis 123
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| -Ineothe Statements For the Years Ended December 31, 1999, 1998, and 1997 125 Statements of Cash Flows For the Years Ended December 31, 1999, 1998, and 1997 127 Balance Sheets, December 31, 1999 and 199.8 128 Statemets ofR Earnis for the Years Ended December 31, 1999, 1998, and 1997 130
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| :S-'pted Financial Data - Five-Year Comparison' 131 Not*es to Financial Statements for Entergy Corporation and Subsidiaries 132 ENTERGY CORPORATION AND SUBSIDIARIES REPORT OF MANAGEMENT Management of Entergy Corporation and its subsidiaries has prepared and is responsible for the financial statements and related financial information included herein. Thn financiaI staternents' arm based' o'agenerally accepted accounting principles in the United States.' Financial nformation indludied elsewhere ii thiis report is consistent with the financial statements.
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| To meet their responsibilities with respect to financial, infQrmation. managemeA. mantaiins aad enforces a system of internal accounting controls designed to provide reasonable assurance, on a cost-Wffte basis, -to.the integrity, objectivity, and reliability of the financial records, and as to the protection of assets._ This systeniinludes communication through written policies and procedures, an- employee Code of Entegrity, and aur-orgnzational structure that provides for appropriate division of responsibility and the training of personnel, .This system is also tested by a comprehensive internal audit program.
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| The Audit Committee of our Board of Directors, composed Isolely.of Directors who are not employee. of our company, meets with the independent auditors, management, and intn c tans periodcally to discussI itemal accounting controls and auditing and financial reporting matters. The Audit Committee appoints the independent accountants, subject to ratification by thel:areholders§. T-l Comi ittee rews with the independent auitliis '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.
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| Independent 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 controls and perform such tests and other procedures as they deem necessary to reach and express an opinion on the fairness of the financial statements.
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| Management believes that these policies and procedures provide reasonable assurance that its operations are carried out with a high standard of business conduct.
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| 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.
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| 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.
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| 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.
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| -ENTERGY GORPORATION(tND SUBSIDIARIES MANAGEMENTfS FINANCIAL DISJSSION AND ANALYSIS LQUIDIT M Y AiNDOAPIN-AL RESQURES Cash Flow Operations N.. cash ,flow.frm oerins fr.- tergy.the d3amtstr .%d, t andSystem. EMU.gy for the years 0aXW~~~ecem*:3198I, p; 9,7a 199719, Entergy $ 1,307 $ 1,753 $1,793 Entergy Arkansas $ 313 $ 409 $ 435 Entergy,)W S.Waes -.. $: . $ ,445 A EntergyLouisiana $ 410 $ 342 $ 315 EntikyN~wrlens '6&-S 46 ; 441V System .1ý1e-- 1;. S .1'--.
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| 29 $ 2862 8 "- . ....
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| Entergy's consolidated cash flow from operations decreased as compared to 1998 pr"marily due to less cash provided by competitive businesses. The decreae w isofne bheeciip~etion of rate phik-ii oais for some of In 199 jcuityompai c with9S n.-cpqeti*ypbusinesse4 used $9.3. of ope.*ratgcash fiqx,.: from, ,ouj, compared
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| $151.7 million they contributed in 1998. This change was primarily due to th sale, of Lp* ,Elenctrty and CitiPower in December 1998. Both businesses rw 998.b*t, otconti.bute at all 9aa, flow i 1cntnhnI in 1999. Offsetting the decrease in operating cash flow in 1999 are the sales of Efficieit Solutions, Inc. in September 1998 and Entergy Security, Inc. in January 1999. These businesses used.0peratin , :,in. 198 and used none in 1999. Also, the power marketing and trading business used less oper cah' flW in 19991'han in 1998 . :.: .* - .: ;.* . * *) ', .. . .
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| In prior years, rate phase-in plans for some of the domestic utility co-panies contributed to cash flow from operations. But Entergy Gulf States' Louisiana retail phase-in plan for River Bend was :*p* ,.i February 1998, Entergy Mississippi's phase-in plan for Grand Gulf 1 was completed in Septemfrý ,8,* i.tergy Arkansas' phase-in plan for Grand Gulf I was completed in November 1998. There* *h *d not contribute to operating cash flow in 1999. Entergy New Orleans' phase-in plan for qdra' in 2001.
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| ~r~ygplp
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| ,'s oyp. ting cash, .fq dpqrqae in 1999 primarily d19e toanicr e in duclivab~es from
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| *oc,,ted cmp*vies. h. crease Iny ,to an, i e inmone poolbo s for designedto re.ucet) do siuty compan' 4.e exteral short t ,* r . g..,u .. ,
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| Investing Activies 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. The increased construction expenditures were primarily due to construction of the Saltend and Dambead 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.
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| ENTERGY CORPORATION-AND SUBSIDIARIES MANAGEMENT'S FINANCIALDISC USSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES The following items partially offiet the overall decrease:
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| 0 $947.4 million of the proceeds from the sale of London Electricity in 1998 was used to purchase notes receivable whieh matured, in August 1999.' Upon .maturity, $321.4 million of, the proceeds was reinvested in other temporary investments consisting of U.s. dollar denominated commercial pap-6 and bank deposits; and o the sales of Entergy Security, Inc. in Janmi* 1999 and Entergy Power Edesur Holding, LTD and several telecomtmunications buSihesses in June 1999.
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| Financing Activities Net cash used in financing activities decreased in 1999 primarily dueto:
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| "o the retiremei in 1998 of debt associateckith the acquisition of ýoon Eectricity and CitiPower, "o increa borrowings in 1999 under the credit facilities'fo'x the construction of the Saltend and Dah*ead Creek power plants by Entergy's global power,developmene bfis",Psiv ; and "o a reduction in dividend payments made by Entergy Corporation in 1999 compared to 1998.
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| Partialy offsetting the overall decrease were ft. following use.
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| o the 1999 repayment of bank borrowings by Entergy Corporation'-andETHC with a portion of the proceeds from the sale of Entergy Security, Inc.;
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| o ' the d ii of preferred 'stock in '1999 at Enteigy Arkansas, Entergy Gulf Stati, "and Entergy LoI.uisian az""id*
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| "o 'the ie..r.has"ofEntergy Corporationcoimmon stock.
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| Capital Resourees and Odatls Entergy requires capital resources for:
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| o Wexenditures; construion/capital o debt and ptefeved stock maturities; o capital' i**ne ts;tm o hiundiag dksiiaries; and o dividend and interest payments.
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| For the, years*2000 through 2004, Entergy' plans to spend $9.8 billion in a capital inv t plan focused on improving service at tl domestic utility companies atd 0owingits global power development *nd nuclear operations busfiess. Thestii a ail n in the lan is $4.2 billion t6 the domestic utility compaiiies,.' $9billion to the global power developmeit busifness, and $1.7 billion 't t nuclear operations business. Mafagdaitkt provides more information on construction expenditures and long-term debt and preferred stock maturities in Notes 5, 6, 7, and 9 to the financial statements.
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| -42 -
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| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS LIQUIDITY AND CAPITAL RESOURCES Entergy's sources to meet the above requirements include:
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| 0 internally generated funds; i3,- cash on hand;
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| -debtorprefetred stock issuances; . .
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| o bank financink under new or existing facilities; o short-term borrowings;. andl " ...
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| oi sales of assets..:
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| The capital; investment plan discussed above is subject to modification based on the ongoing effects of transition to competition planning and the 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 sigi.cant borrowings may be necessary for Entergy to implement these capital spending plans.
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| "The domestic utility companies have plans to issue debt in 2000, the proceeds of which will be used for general corporate purposes, including capital expenditures, the retirement of short-erm. indenenessp.- and, in the case of Entergy'Guif Statestthe mandatory redemption of preference stock.'. On February 15, 2000, Entergy Mississippi issued $120'million of 1.75% Series:-First Mortgage Bondsdue February 15, 2Q03. On March 9, 2000, Entergy Arkc $100 million of 7.2% Series First Mortgage Bonds due March 1, 2003. Vrýceeds of both-issuances
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| 'asissued will be Used, in parý for the reireamet -of short-term indebtedness that wasý incurred for working .apital needs and capital expenditures.
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| On Februak, 25,, 2000,.,Entergy Corporation obtained a 364-day term loan in the amountrof $120 million, accruing interest at a rate bf 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 remaining proceeds for general corporate-purposes and working capital needs.
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| During 1999, cash from operations, the sale of businesses, and cash on hand met substantially all investing and financing requirements, of the domestic utility companies and System Energy. Entergy, Corporation received
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| $532.3 million in dividend payments from its subsidiaries in 1999.
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| Alldebt and common andpreferred stock issuances are subject to regulatory approval, Ptferred stock and debt issuances are subject to issuance tdst set forth in corporate charters, bond indenturesiand other agreements.
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| 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 trustsgbr limited partnerships as.financing subsidiaries forthe purpose of issuing quarterly income preferred: sbcurities.
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| Management expects the domestic utility companies and System Energy tocontinue to refinance or redeem higher cost debt and preferred stock prior to maturity, to the extent market conditions and interest and dividend rates are favorable.
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| Entergy's ability to invest in domestic and foreign generation businesses is subject to the, SEC's regulations under PUHCA. These regulations limit to 50% of consolidated retained earnings the total amount that Entergy may invest in domestic and foreign generation businesses at the time an investmentlis made. Using the proceeds from the sales of London Electricity and CitiPower, Entergy's FUCO and EWG subsidiaries have the ability to make significant additional investments in domestic and foreign generation businesses without the need of further investment by Entergy Corporation.
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| -43 -
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| EfffERGY CORPORATION A$1D SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
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| *LIQUIDITY AND CAPITAL RESOURCES Entergy's global power development business is currently .constructing: twoQ combined-cyele gas turbine merchant power plants in the UK. Saltend, a 1,200 MW plant in northeast England, will provide steam and UK national electricity to BP Chemicals' nearby industrial complex, with the remaining eletricity-to be .sold into the 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, Sattend's completion has been delayed due to construction problems at the site. The construction contractor has, submitted a revise** construction schedule after substantial analysis, and currently estimates a phased-in completion of the.thre"vint Iplant3 with the full plant in service by June 30, 2000. The total cost of Saltend is currently estimated to be approximatly $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 the fourth quarter of 2000. Management estimates. the total.!.cost-of.Damhead Creek at approximately,$582 minion. The financing of the construction of these two power, plants is discussed in Note 7 to the financial statements.
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| In October 1999, Entergy's global power development business obtained an option to acquire twenty-four
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| * GE7FA advanced technology gas-turbines, four steam turbines, and eight GE7EA advanced tehnologygas turbines.
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| :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.O0bi~lion., Management, plans ýto use theturbines in future generation projects of the global power development business, and anticipates that the, acqusit~on.of the
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| *turbines be funded by a combination of cash on band, project financing, and other.external fianeing. Payments fill scheduled for the.acquisition of these turbines are $273 million in 2000, i$415;mllhon-jn.2001Q, and $3_11 million in 2002.
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| On July 13, 1999, Entergy's non-utility nuclear power business boughtthe 670; MW Pilgrim Nuclear Station located in Plymouth. Massachusetts ftom Boston Edison. -The acquisition included,,theplant, real estate, materials and supplics, andpuclear fuel fora.purchase price of $81 million- The purchakse price:was funded with a portion of the proceeds from the sales of non-regulated businesses. As part of the Pilgriiupurcbaso,, Boston Edison .transferred a $471 million decommissioning trust fund to Entergy's non-utility nuclear power business. After a favorable tax
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| ,detennination..egarding the trust fund, Entergy returned.*$3 million ofthe trust fund to Boston Edison, Based on cost. estimates provided by an outside: consultant, Entergy believes that, Pi grim's, decommissioning fund will be adequate to cover future decommissioning costs for the Pilgrim plant withoutany additional deposits to the trust.
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| 3 Entergyes nuclear business has an outstanding offer to NYPA for the acquisition of NYPA's 825 MW James A, Fitzatrick nuclear power plant located near Oswego, New York and N-YPAs -980 .MW Indian Point 3 nuclear power plant locate4d, 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. Entergy would pay $50 million in cash at the closing of the purchase, plus seven annual installments of approximately $108 million. each commencing.one year from the date of the closing. Entergy projects that these installments vil be paid from the proceeds of the sale of power from the plants and that Entergy, will invest an additional $100 million in the plants.
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| Entergyhas also made investments in energy-related businesses, including power marketing -and trading.
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| Under PUHCA, the SEC imposes a limit equal to 15% of consolidated capitalization on the amount that may be invested in such businesses without specific SEC approval. Entergy's capacity to make additional investments at December 31, 1999 was approximately $2.2 billion.
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| ENTERGY CORPORATION AND SUBSIDIARIES 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 EnterWy common stock diviidends based upon Entergy's earnings and financial strength. Dividend restrictions are discussed in Note 8 to the financial statements.
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| li.
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| In ober 199,-, the Board approved a plan for the repurchase ofEntergycomnmon 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
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| $250 kitllio. In July .1999, the Board' approved the commitment of up to anadtonal $750 million toward the repuh 6f Entergy c nimow stock through December 31, 2001. Shares are being purchased on a discretionary ba~i§.' See Note 5 to the firancial statemients for stock repurehases and issuances made during 1999..
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| "Enjtegyps capital andfiffinancing requirements and available lines of credit are more thoroughly discussed in Ndtes 4ý,'55 6, 7, 9., and 10 to the*financial statements. "
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| Enterey Corporation and System Enerfv Pursuant to an agreement with certain creditors, Entergy Corporation has agreed to supply System Energy with sufficient capital to:
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| maintain,.ys Energy's.equity capital -at a. minimum of 35% of its total, capitalization (excluding s"hort-term.n*bt);
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| o permit thef.,continued c*mmercial operation of Grand Gulf 1; o pay. in full all,System Energy indebtedne~sfor 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 rights in the agreement as security for the specific debt.
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| The Capital Funds Agreement and other Grand Gulf 1-related agreements are more thoroughly discussed in Note 9 to the financial statements.
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| -45 -
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| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'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 now businesses and to restructure existing businesses.
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| For Entergy, it is a foopidable undertaking, made uniquely difficult because the domestic utility companies operate in five retail regulatory jurisdictions and are subject to the System Agreenent, which contemplates the integrated operation of Entergy's electric generation and transmission assets throughout the retail service territories.
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| Entergy is striving to achieve consistent paths to competition in all five retail regulatory jurisdictions. Progress was made in 1999 when the Arkansas and Texas legislatures enacted laws to bring about electric utility competition.
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| 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.
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| State Regulatory and Legislative Activity Arkansas In April 1999, the Arkansas 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, but not beyond June 30, 2003. The provisions ofthe new law:
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| "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 determination of and mitigation measures for generation market power, which could require generation asset divestitures; "o allow for recovery of stranded and transition costs ifthe 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.
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| 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.
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| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'SFINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT FACTORS AND KNOWN TRENDS Texas In June 1999, the Texas legislature enacted: a law providing for competition in the electric utility industry through retail open access. The law provides for retail open access by most electric utilities, including Entergy Gulf States, on January 1, 2002. With retail open access, generation and :a new retail provider operation will be competiti-Ve businesses, buttransnissiOin and distribution operations will continue to be regulated. The new,retail 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:
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| o require a rate freeze through January 1, 2002 with frozen rates beyond that for residential and small conimercial customers of incumbent utilities; require utilitiesto: separate (unbundle) their generation, transmission and distribution, and retail electric its providerfinictions. Entergy Gulf States filed its plan in January 2000 with the PUCT to separate
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| . functions. The plan included separate trasmission and distribution companies; "o require operation in a non-discriminatory manner 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; 0 allowsecuritiiatio f .regulatciiyssetgind stranded costs; o provide for the.determination of and mitigation measures for generation market.power; and "o require utilities to file separated data and proposed transmission, distribution, and competition tariffs by April 1, 2000.
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| 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 aiiction, at least .660 days before Januarya 1, 2002, entitlements to at least 15% of their installed generation capacity in Texas. The obligation to auction capacity entitlements continues for up to 60 months after January 1, 2002, or until' 40% of customers in the jurisdiction have chosen an alternative supplier, whichever comes first, They PUCT and various 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:
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| 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 alternative to a market-based return on equity, a presumptively 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 return should be: higher. The rules also provide that the utility may propose a performance-based enhancement to the authorized rate of return, based on 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.
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| -47 -
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| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISC.JSSION AND ANALYSIS SIGNIFICANT FACTORS AND KNOWN TRENDS Louisiana In March 1999, the LPSC deferred making a decision on whether competition in the 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 implementation to be considered by the LPSC by January 1, 2001. The LPSC.staff outside consultants, counsel, and industry members are working together to develop a plan to be submitted to the LPSC.
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| Mississippi The MPSC issued a proposed transition plan in June 1998 and continues to hold periodic hearings and request informational filings regarding various potential effects of retail competition. In.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.
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| See Note 2 to the financial statements for additional information.
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| 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. The Council is conducting hearings regarding retail gas competition. Entergy New .Orleans has filed a plan in that proceeding outlining,-the conditions under which it could support retail gas competition. The outcome of this proceeding is uncertain.
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| Federal Regulatory and. Legislative Activity Open Access Transmission and Enterav's Transco Proposal Competition within the wholesale electric energy market increased with the implementation of open access transmission. Open access allows any supplier to transmit electricity to its customers over transmission facilities owned by a different company., In 1996, FERC required all public utilities that it regulates to provide wholesale transmission access to third parties. 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 comply with the FERC requirements.
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| FERC policy- strongly favors 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. The proposed Transco would be:
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| "o a separate, independent, incentive-driven transmission company regulated by FERC; "o governed by an independent board of directors with no ties to Entergy or to any power market participant; "o composed of the transmission system assets transferred to it by the domestic utility companies and other transmission owners; "o operated and maintained by employees who would work exclusively for the Transco and would not be employed by Entergy or the domestic utility companies; and "o passively owned with no voting rights by the domestic utility companies and other members who transfer assets.
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| ENTERGY CORPORATION:AND 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 ownership :f a Transco 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:
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| o the selection.procesp for the Transco s board of directors; 0 the Transco board's fiduciary obliga.ns to the member companies; J o the ability of the Transco to raise addtinl cital; and o restrictions on tranatons between the Transco and the member companies.
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| Management' x °t make additional filings during 2000 w federa, state,, an local regula authorities add sing these and other isue and se g necesi sary approvals for the*forým ti ofthe Transo. If approved, the Transco &~l1bcm prtoa n2001.
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| In a ndemaking that will affect the Transco, FERC issued Order,2000 in l)tafber 1999. Order 2000 calls for owners and operators' of traftiission lines:4in the United, States to join -regional rAnsimiion organizations
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| ("RTOs') on a voluntary basis. Order 2000 requires public utilities that own, operate, or control interstate transmission'facilities to file by October 15, 2000 a' proposal for how they intetd- to Oirticipate in an RTO -or, alternatively, to describe the steps they have taken to do so or the reasons why it: is notrfasible to participate in: an RTOý FERC's Order 2000 requires'that RTOs be effectiveno later than December 15, 2001.
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| FERC is maintaining flexibility as to the structure of RTOs.'NFor example,;it appears that RTOsmnay befor 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 market participants, to have suffibient regidnal scope to-ftiaintam reliability and efficiency, to be non-discriminatory in granting service, and to maintain operational control over their regional transmission systems" "The Transco,, an independent, for-profittransmission"company WVhich has already been proposed to FERC by the domestic-utility comnPaimies, 'is Eteigys preferred approach fdr complying with FERC's Order 2006. However, Entergy is also exploring other means for complying with Order 2000.
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| Deregulation legislation Over the past sveral years, a number of bills.have been i*otr9ged in the United States Congress to deregulate the generation functon of the electric power industry. .The bills generally baye provisions at wcquld give retai. consumers the ability to, choose their own electric, service provider. .Entergy ,Crporation has supported some deregulation legislation in Congress that would lead to an orderly transi~oqto competition and woulod also rtepeal PU-HCA and PURPA. Congressional sentiment appears to be against mandating retail competition by a certain date and in favor of clarifyi6g state authority to order retail choice for consumefs, Congress. adjcurne4 in 1999,without final action on a deregulation bill by a committee ofthe House* orSenate.
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| Industrial and Commercial Customers
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| .. utility ompsts eplrn ways toereducstiei tion*is.....
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| 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, cogeeratio is
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| .an option available to a significant portion of the domestic utility companies' industrial.customer base. The domestic utility companies have responded by working with some industrial and commercial customers and negotiating electric service contracts that provide service at rates lower than would otherwise be charged. Despite these actions, Entergy 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.
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| -49 -
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| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT FACTORS AND KNOWN TRENDS State and Local Rate Regulation The retail regulatory basis for setting rates for electric service is shifting in some: jurisdictions from traditional, exclusively cost-of-service regulation to include performance-based elements. Performance-based formula rate plans are designed to reward increased efficiency a productivity, with utility shareholders and customers sharing in the benefits. Entergy Mississippi and Entergy Louisiana have implemented performance-based rate plans. These companies made the foowimg filings resulting in rate reductions i 1999:
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| o Energy Louisiana submitted its formula rate plan filing fr the 1998 test year and implemented a rate
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| " recueon of approximately $15:0 million, effective. August 1, 1999. Entergy Louisiana's filig is SUbject to fufer review by the LPSC, which may result in :an additional :ne in rates.
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| o Entergy Mississippi implemented a $13.3 million rate reduction, 'effeýtive 'May 1999, based on its formula rate plan. filing for the 1998 test year. In June 1999, *itergy Mississippi revised its filing, repultig ana daidtonal rate reduction of approximatqly $1.5 million, effectivc. uly 1999.
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| All of-the dome§tc:ti"'y'companies have recently been ordered to grant base rate reductions and have refunded or
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| ,-creditod, cutgomers.'foqr previous overcoliections of rates. The continuing, patlem of rate reductions: reflects completion of rate phase-in plans, lower costs of service- ordered by regulators, and lower authorized returns on common equity. The domestic utility companies' retail and wholesale rate matters and proceedings are discussed more 1boroughly inNote,2 to the financial statements.
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| Other Electric UtityTrends Utility mergers and joint ventures involving domestic and overseas companies are another continuing trend in the industry. In some. areas of the country, utilities have either sold or are attempting to sell all or a substantial portion of their generationi assets in order to focus their businesses on transmission and/or distribution services.
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| -.Entergy, through..its global power development; and non-utility 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.
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| In some areas' of the United'States, municipalities are exploring the possibility of establishing their own electric distibution systems, which wvould result in both residential and large industrial customers leaving some investordowned atilities.: If the effWrts of a muicipality are successful, the investor-owned utility may be unable to recover some costs incurred for the purpose of serving those customers.
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| Continued Atiglidation of SWAS 71 And Stranded Cost Exposure The domestic utility companies' and System Energy's financial statements primarily reflect assets and costs based on existing cost-based ratemaking regulation in accordance with SFAS 71, "Accounting for the Effects of Certain Types of Regulation." Under traditional ratemaking practice, regulated electric utilities are granted exclusive geographic franchises to sell electricity. In returM, the utilities are obligated to make investments and incur obligations to serve customers. Prudently incurred costs are recovered from customers along with a retum on investment. Regulators may require utilities to defer collecting from customers some operating costs until a future date. These deferred costs are recorded as regulatory assets in the financial statements. In order to continue applying SFAS 71 :to its financial statements, a utility's rates must be set by an independent regulator on a cost-of-service basis and the rates must be charged to and collected from customers.
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| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT. FACTORS AND KNOWN TRENDS As theageneration portion of the utility industry moves toward competition, it is likelywthat generation rates will no longer be: set on a cost-of-service basis. When that occurs, the generation portion ofthe business could be required.to discontinue application.of SFAS 71. The result:of discontinuing application of SWAS 71 could be the recording: of asset impainents..and the removal of :regulatory assets and- liabilities A=om te. balance 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 conpanies and System Energy:.ontinue to 'apply, SFAS 71.. Arkansas and Texas -have enacted retail open access laws. as, described above,
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| -but Enteigy believes that significant issues remain%to be addressed by Arkansas and Texas ,regulators, and the enacted la. s do not provide .sufficient detail to determine. definitively the impact on Entergy Arkansas'-and Entergy Gulf States' regulated operations.
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| As Entergy's domestic utility companies move toward competition, there are costs or commitments that have been incorred under a regulated. ricing system that might be impaired or not recovered in a Gompetitive market.
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| These costs, are refered. to as stranded costs. The restructuring laws enacted' in Arkansas and Texas provide an opportunity for the recovery of stranded costs following review and approval by the APSC-. or the PUCT.. Nearly all of Entergy's exposure to stranded costs involves commitments that were approved by regulators. These exposures include the following:
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| o the: allowed cost of constructing its, nuclear:generating ..plants (the domestic utility, companies' net investment in-nucleargeneration is provided in Note I to the financial satmets ".
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| olong-term contracts to. purchase power under the Unit Power Sales:Agreement' and-associated with the Vidalia project, which may require paying above-market prices in a competitive Wairo t (dtail
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| .c concerning these obligations is provided in Note 9 to the financial statements);,
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| "o nuclear power plant decommissioning costs (detail concerning thes costs; is provided in Note 9'to the financial statements);
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| "o the construction cost of some fossil-fueled generating plants and related con*w.tra okbiielothat may be above-market price in a competitive market (detail concernmg the domestic utility companies' net investment in generation other than nuclear, which is primafily 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 balance shdets::
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| As of December 31, 1999, the amount of these potentially strandable costs for Entergy reflected in the
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| -financial statements is -approximately $1.8 billion atEntergy Arkansas, $3.3 billion at.Eantegy Gulf States,
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| $235 billion at Entergy Louisiana, and $0.3 billion at Entergy. Mississippi.. The estimated net present value of the obligations described above ttatare not reflected in the balance sheets for. Entergy is approximately $0.9 billion at
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| - Entergy. Arkansas;$0.4 billion at Entergy Gulf States,.$$1.5 billion at Entergy Louisiana, $0.6 billion at Entergy Mississippi, and $0.3 billion at Entergy New Orleans,.. In the normal course of business., depreciation, amortization, and ipayments under the contractual obligations will continue to reduce these amounts. The actual amount of these costs and obligations that 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 will depend upon a number of variables, including the timing of stranded cost determination, the values attributable to certain strandable. assets,- assumptions conceming future- market prices for electricity, .and other-factors. In addition, because. transition legislation or regulation is not in place in Louisiana, Mississippi:,. or. New Orleans, Entergy cannotpredict how those.jurisdictions will treat stranded costs and whether Entergy will be able to recover
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| -allor a part of the costs in those jurisdictions. -
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| -51 -
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| . ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL*-DISCUSSION AND ANALYSIS SIGNIFICANT FACTORSAND KNOWNTRENDS
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| . .Untiltheproceedings in Arkansas and Texas provide agreaterlevel of certainty,,it is anticipated that both Entergy Arkansasiand Entergy iGulf!States will continue to apply SFAS -71 to their regulated operations. SFAS 71
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| .will continu6 to- be applied iri*te Louisiana, Mississippi, .aid New Orleans jurisdictions: pending legislative or regulatoi.Advel~pments relating totransition to competition. If SFAS .71*is*.no,longer applied by the respective domestic utility companies and. Sys!em Energy, and regulation or.legislation does not-allow for recovery of all or a portion of its, sqa ,ded costs,.there could be a material 4dverse impact .on the r6spective 'domestic utility: companies' and Entergy'sfinancial statements. However, -Entergy believes that the amount ofcosts:that will be stranded without a means of.recovery..or mitigation -for the domestic utility, companies. will ibe., significantly less than:.*he- amounts referred to above. Theapplication of SFAS 71 .is discuissedimorevthoroughly in Note 1,to the financial statements.
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| Year 2000 Issues Entergy, didmot bxperience any significant problems! in operations dtieto the,rollover to-year: 2000i, and there were, no power outages caused, by the rollover. Entergywill. continue to monitor additional dates. during 2000 that could be affected by' thd rollover, to year>ZQ0O, but does not expect material, problems based onw its testing and the results of the1Januaryt I,. 2000 rollover.
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| Management expects to spend approximately $54 million for maintenance and modification costs related to year 2000Qissues ibetween ,>1998 :and mid-2000. Entergyhas&incurred approximately $51 million of this total through December 1999. The!maintenanceor. modificationwcosts, associated with year .2000ýcompliance are expensed as incurred, while the:costs ofu-ew software ,are* capitalized-andaamortized .over the .software's usefulife. The costs are beingfundedthrougholemtig cash flows. In-certain of Entergy'sjurisdictions, theexpenses have been deferred and will be recovered from ratepayersinto 2002. Total capitalized costs for projects; accelerate.d due: to year 2000 were estimated to be $20 million, Awhich is tho amount Entergy has incurred through December 1999.v Market Risks.,Disdosure
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| ".Enter&y.is exposedl-to.thefollowing market risks..:
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| " the commodity price risk associated with its power marketing and trading business; .
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| "o the interest rate risk associated with certain ofits variable rate credit facilities-. and "o the interest rate and equity price risk associated with its investments in decommissioning trust funds.
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| :h Entergys power-marketing and trading business enters into sales and purchase of-electricityand natural gas
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| .for delivery inheifuture.,:-Because the market priceg ofelectricity And natural gas canw-be volatile, Entergy's: power marketing: and trading ,b.,usiness Iis exposed to risk ,arising from differencest. between, the. fixed prices. in its
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| * commitments and fluctuating market.prices. -To mitigate its exposure, IEntergy's power marketing and trading business enters into electricity: and. natural gas futures,, swaps, option contracts,, and electricity forward agreements.
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| The business also, manages its exposure.with- policies limiting its exposureoto :market risk and daily monitoring :of its potential financial exposure..
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| Entergy's power marketing and trading business uses a value-at-risk model .(VAR): as one measure of market risk for the: traded portfolio. VAR acts in conjunction with stress testing, position reporting, and profit and loss reporting in ,order. to measure and,control the risk inherent in the traded portfolio. The tprimary use of VAR is to provide a benchlmark for market risk contained in the trading portfolio. VAR does not function as a comprehensive measure of all risks in a portfolio. Furthermore, VAR is only an appropriaterisk measure for products traded in relatively liquid markets.
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| ENTE9GVY %ORAOMU.QNiA D.SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS SIGNIFICANT FACTORS AND KNOWN TRENDS Management's VAR methodology uses a variance/covariance approach to the measurement Of market risk.
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| The varance/.cov~aaance appro.ach ass.tnes prcsfo1q ai othat, whi'9,h prices are io distribu d.This-oapproach eurs~lwni~us onll 5% e..nfide... e t4 nasure pr-ab lt os 9, o a onete test'
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| ... :! . . .. i.. . . . , . "..
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| correnatnod mothen matrixt l es tdtdpacy olAdifoerent balionproducts W,together ionh c- :5, sspAof
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| -And .
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| Man-temporilcorrelation of tVi te s repnre "ndesma of commoditaih deoivery xdpiffrnt peripod to!novetoget ier.
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| tarketn $3 as ofoating 999 and Power p was .,Z a: high ili~with ilin s fDeeme 31, 1998. Doq
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| $61 d"yAI month-end VAR of $7.1 million and a low month-end VAR of $2.0 mnillion.
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| Management's calculation of VAR exposure represents an estimate Of re lQ*y.-p-0i~jAm low~as ftht would be recognized on its portfolio of derivative financial instruments, assuming hypothetical'movenients in Prices.
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| ', ,ejail and it does not represent the maximumn possible loss or an expected loss that may occur, because losses will differ fr-om those estimated based upon actual fluctuations in market rates, operataigiexpos'.99. pAzthe timing thereof, and changes in the portfolio of derivative financial instruments during the year.
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| credit Entergy uses interest rate swaps to reduce the impact of interest rate changes on certain variable-rate facilities associated with its global power development business. Under the interest rate swap agreements, Entergy the life of the agreements.
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| receives floating-rate interest payments and pays fixed-rate interest rate payments over to the interest it must pay on the variable-rate The floating-rate interest that Entergy receives is approximately equal credit facilities. Therefore, through the use of the swap agreements, 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.
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| Entergy 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 3 trust fuids fluctuations will not affect results of operations for the ANO, River Bend, Grand Guff and Waterford trust fund holds approximately $341 because of the application of regulatory accounting principles. The Pilgrim securities have an average coupon rate million of fixed-rate, fixed-income securities as of December 31, 1999. These fund also holds of 6.67%, an average duration of 6.2 years, and an average maturity of 9.5 years. The Pilgrim trust equity securities worth approximately $81 million as of December 31, 1999. These securities are held in a fund which is designed to approximate the Standard & Poor's 500 Index. The decommissioning trust funds are discussed more thoroughly in Notes 1 and 9 to the financial statements.
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| Report of Independent Accountants" To the Board of Directors and Shareholders of Entergy Cogoration:
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| In our opinion, the a mpanying consolidated balance sheets and the related consolidated statements of inc6me, of retained earnings, comprehensive income and paid-in-capital and of cash flows present fairly, in, all material respects, the financial position of Entergy Corporation and its subsidiaries at December 31, 1999 and 1998, and the results of their operations and'their cash flows fobtead of the three years in the period ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. 'These finaicial statements are the responsibility of the Company'si agmut; our respoisibilit - is ttexpress 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 wepIn 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 significant estimates made by management, and evaltiating theo~verall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed aboV6.
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| PridewaterhouseCoperg LLP
| |
| -NeW Orleans, Louisiana Febar 17, 2000";
| |
| : ENTERGY CORPORATION AND SUBSIDIARIES
| |
| *MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Entergy's results of operations are discussed in two business categories,: 5Domnesticv Utility Companies ,and Entergy's System Energy" and "Competitive Businesses." Domestic Utility Companies and System Energy is income:in 1999.
| |
| predominant business segment, contributing 73% of Entergy's operating revenue and 93% of its net power Competitive Businesses include the following segments detailed in Note 14 to the financial statements:
| |
| and all other. "All other" principally.includes.:global power marketing and trading, Entergy London, CitiPower, development, non-utility nuclear power, and the parent company, Entergy Corporation. -The elimination of power transactions is also included inall other. Note marketing and trading mark-to-market profits on intercompany power by business segment.
| |
| 14 to the financial statemmUsprovides. a detailed breakdown of financial information Net income for the year ended December 31, 1998 reflected the fr-euits of operations .for Entergy London, CitiPower, Efficient Solutions, Inc., Entergy Security, Inc., Entergy Power. Edesur Holdings, and several not telecommunications businesses. These businesses were sold between late 1998.and mid-1999, and are therefore included in some or all of 1999's results of operations.
| |
| Net Income Entergy Coiporation's consolidated net income in 1999 decreased compared to 1998 primarily due to:
| |
| " the absenke .,LondonElectricity's results of operations in 1999 becaxuo-ofthe sale of the business in December 1998; and.
| |
| "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 power reflected in 1998 results, a 5% increase in domestic utility net income, and a reduc tionh ih te net loss for the marketing and trading business.
| |
| Entergy Coy- pration's consolidated iet income In 1998 icreased compared to 1997 primarily due to the i 1997 results.
| |
| gains on the sales of L xdn Electricity. ;d Citipower and the UK winil profits tax rieflect ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Domestic Utility Companies and System EnerLv Revenues and Sales .
| |
| The changes -in electric operating revenues for Entergy's domestic utility companies and System Energy for 1999 and 1998 are as followsc!- -
| |
| * Increaset(Decrease)
| |
| Description 1999 1998 (In Millions)
| |
| "Bae rtevenues " $81.2 ($290.3)
| |
| Rate riders (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 1999, bas,reveues inc ed $81.2 million primarily due to:
| |
| o a $93.6 million reversal in June 1999 of regulatory reserves associated with the accelerated amortization of accounting order deferrals mi.conji*nction with the settlement agreement in Entergy Gulf States' Texas
| |
| .Nor her 1996 ,and 1998rate l . The settlement gemnt was approved by the PUCT in June 1999. ThiLfet mincome effect of this reversal is largely offset by the amortization of rate deferrals 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 "o 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 revenues do not affect net income' because specific incurred expenses offset them.
| |
| In 1999, rate rider revenues decreased $164.1 million due to a revised Grand Gulf rider implemented at Entergy Arkansas and Entergy Mississippi. The revised rider eliminated revenues attributable to the Grand Gulf phase-in plans, which were completed in 1998, and implemented the Grand Gulf Accelerated Recovery Tariff (GOART), allowing accelerated recoveiy and payment of a portion of the two companies' Grand Gulf purchased power obligations. The tariffs became effective in January 1999 and October 1998, respectively..
| |
| In 1998, rate rider revenues decreased $108.6 million due to the decline in the Grand Gulf 1 cost recovery rate rider revenues at Entergy Arkansas, reflecting scheduled reductions in the phase-in plan 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 financial statements.
| |
| Fuel cost recovery revenues Fuel cost recovery revenues do not affect net income because they are an increase to revenues that are offset by spedific incurred fuel costs.
| |
| '*In 1999r, &fclostrecovery revenues increased $188.7 million primarily due to:
| |
| o an increased fuel factor and a new fuel surcharge implenmiented in Entergy Gulf States' Texas jurisdiction in 1999; o recovery of higer-priced fuel and purchased power costs at Entergy Louisiana due to nuclear outages at "Waterford3 in 1999, and an increase in the energy cost recovery rate effective April 1999 and the completion of a customer refund 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 change in generation mix.
| |
| Sales volume In 1998, sales volume increased $187.3 million as a result of significantly warmer weather at all of the domestic utility companies.
| |
| Other revenue In 1999, other revenue increased $74.3 million primarily due to a change in estimated unbilled revenues for "thedomestic 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 period amounts through the first quarter of 2000. Comparative impacts are also affected by seasonal variations in demand.
| |
| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL 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 for resale "In199.9, sales for resale decreased $50.3 million primarily due to the loss of certain municipal and co-op customer contracts at Entergy Arkansas, 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.
| |
| 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 fuel 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 Arkansas.
| |
| These increases were partially offset by decreased fuel expenses at Entergy Mississippi as a result of lower total generation.
| |
| Other operation and maintenance expenses In 1999, other operation and maintenance expenses increased primarily 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.
| |
| In 1998, other operation and maintenance expenses increpsed primarily due to the 1997 settlement of litigation with Cajun, which resulted in the transfer of the 30% interest 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 OFOPERATIONS Depreciation and amortization expenses In 1999, depreciation and amortization expenses decreased due to:
| |
| of the River Bend abeyed plant as lower depreciation at Entergy Gulf States as a result ofthe write-downdates; and required by the Texas rate settlement and a review of plant in-service o reduction in principal payments associated with the sale and leaseback in 1989 of a portion of Grand Gulf 1 at System Energy.
| |
| Other retlatorv chargMes In 1999, other regulatory charges decreased due to:
| |
| "o lower accruals for transition costs in 1999 at Entergy Arkansas; finance charges in the Entergy Gulf States' "o a change in the amortization period for deferred River Bend Texas retail Juidiction; and Louisiana in accordance with an LPSC "o deferral of Year 2000 costs at Entergy Gulf States and Entergy order.
| |
| at System Energy as a result of the These decreases were partially offset by increased charges implementation of the GGART at Entergy Arkansas and Entergy Mississippi.
| |
| In 1998, other regulatory charges increased primarily due to:
| |
| for the transition co6st account at Entergy "o additional accruals of $74.0 million ($45.0 million net of tax)
| |
| Arkansas; and
| |
| " the decrease in the under-recovery of Grand Gulf 1-related costs at Entergy Mississippi.
| |
| net of tax) reversal of 1997 reserves at The increase was partially offset by the $15.3 million ($9.3 million costs in December 1998.
| |
| Entergy Arkansas for previously deferred radioactiv'e waste facility the transition cost account to collect "EnteigyArkansas' settlement agreement withi the APSC established potential stranded costs when retail Access is "earnings in excess of an allowed return on equity for offset against implemented.
| |
| Amortization of rate deferrals of Grand Gulf I rate phase-in plans In 1999, amortization of rate deferrals decreased due to the completion at Entergy Arkansas and Entergy Mississippi in 1998. These decreases were partially offset by increased order deferrals in June 1999 in accordance with amortization at Enteray Gulf States due to a reduction of accounting the Texas settlement agreement.
| |
| of rate phase-in plans at Entergy In 1998, amortization of rate deferrals decreased because of the completion Mississippi.
| |
| Arkansas, Entergy Gulf States (Louisiana jurisdiction), and Entergy 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 reserves for regulatory adjustments recorded in 1998 than in 1997 at Entergy Gulf States.
| |
| This increase was partially offset by interest income related to the settlement byEnteriy Gulf States of litigation with Cajun recorded in December 1997.
| |
| Interest charges In 1999, interest on long-term debt decreased due' to retirement and refinancing"of long-term debt at the domestic utility companies and System Energy.
| |
| Other interest increased in 1999 primarily due to interest on the potential refund of System Energy's proposed rate increase.
| |
| In 1998, interest charges decreased due to the retirement of certain 1ong-ternn debt at th" domestic 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 EnteTgy London and CitiPower in 1998 and decreased saes revenues in the power marketing and trading business. The decreased sales revenues in the" power iar. in and trading business resulted from decreased electricity trading volumxeju the peak sunmmer months in 1999 compared to 1998.
| |
| However, the impact on net income from these decreased revenues was mor ta offset by decreased fuel and purchased power expenses as discussed below, resulting in a reduction in operating loss 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 and trading business. This business' volume increased dramatically in 1998 due to increased marketing efforts and significantly warmer weather. The impact on net income from. these revenues is' offset by increased power purchased for resale as discussed below.
| |
| ENTERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Expenses
| |
| ;Fuel and prchasedpower eWxpees due to:
| |
| Fuel and purchased power expenses decreased.for the year ended December 31, 1999, ptimarily
| |
| .o the business sales previouslydiscussed; "o decreased electricity trading volume in the power marketing and trading business; and and "o a $44 milliont ($27 million net of tax) counterparty default incurred in 1998 by the power marketing trading business.
| |
| These decreases are partially 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. The power marketing and trading business also incurred a $44 million
| |
| ($2Wmillion rti oftax) counterparty defaulit i198.
| |
| Oflier 61peratioft and mainteiiance Wxene 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:
| |
| -o :an'incrase for e power marketing and trading business resulting primary from increased. risk 0 ian-i graehtdi f i b kofier su ps any
| |
| - an increase for the-hdon-utifity nuclear'p'wer business resulting primarily from acquisition and operation of the Pilgrim plant in 1999.
| |
| In 1998, other operation and maintenance exi increased primafily due'to:
| |
| but o acquisition of secud'ty companies whose operation and maintePnance. expenses were included in 1998 not m 1997;..w.
| |
| "o higher transmission expenses for the power marketing and tading business dueo. significantly increased power trading,sales volume.:
| |
| Other Other income Other income decreased for the year ended December 31, 1999, due primarily to the gains recorded in 1998 million on the sales of Entergy London of $327.3 million ($246.8 million net of tax) and CitiPower of $29.8
| |
| ($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 ofthe 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 recognized 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; o a $68.6 million ($35.9 million net of tax) loss on-the sale of Efficient Solutions, Inc. (formerly 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 for the businesses sold during 1998.
| |
| In 1998, other income increased primarily due to the gains recorded on the sales of Entergy London of
| |
| $327.3 million ($246.8 million net of tax) and!CitiPower of $29.8 million ($19.3 miillion net-of tax).
| |
| This increase in 1998 was partially offset by:
| |
| o the $68.6 milioin'($35.9 million 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 for 1999, 1998, and 1997 were 37.50/0, 25.3%, and 6 1.0 %, respectively. The effective income tax rate increased in 1999 primarily due to the items discussed below that occurred in 1998. The increase was partially offset by the recording of deferred tax benefits in 1999 related to expected utilization of foreign tax credits.
| |
| The effective income tax rate decreased in 1998 principally duo to:
| |
| "o the UK windfidl profits tax of $234.1 million at Entergy London recognized in 1997; "o the tax effects of the settlement by Entergy Gulf States of litigation with Cajun in 1997; "o recognition of $44 million of deferred tax benefits in 1998 related to expected utilization of Entergy's capital loss carryforwards; and o a $31.7 million reduction in taxes because of reductions in the UK corporation 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 CORPORATIQNAND. SUBSIDIARIES CONSOLflATED STATEM*N .OF COME For the Years Ended December 31, 1999 1998 1997 (on Thousands, Except Share Data)
| |
| OPERATING REVENUES
| |
| $6,271,414 $6,136,322 $6,538,83134 Domestic electric 110,355 115,35-5 '137,345 Natural gas 15,852 43,167 4.3,664 Steam products 2,375,607 5,199,928 2,819,086 CompetiVe businesses 8,773,228 I11,494,772 -1,538 97A TOTAL.
| |
| OPERATING EXPENSES Operattg azd Maintenance:
| |
| * Fuil, fi~eI-ro1ated expenses; and 1,706,028 gas pchased for resale 2,18,811i "2,442,484 4,585,444 Purcased power 76,057 83,885 73,857 Nuc1a refueling outage,qxpenses 1,705,545 1,988,040 1,886,149, Other operation and maintenance 46,750 52,552 45,988 Deconm*issioning 339,284 362,153 365,439 Taxes other than income taxes 698,881 938,179 927,456 Depreciation and amortization 8,113 35,136 (18,545)
| |
| Other regulatory charges (credits) - net 237j302 .42.,803 Amortization of rate deferrals 122,347 7,521,574 9,982,917 ::7,4,6 TOTAL OPERATING INCOME 1,511,855: ,/ . . -..1 ý.,
| |
| 1,834,363 F-.*: ý -,
| |
| OTHER INCOME (DEDUCTIONS)
| |
| -29,291 '12,465 10,057 Allowance for equity funds used.during construction.. 71,926 274,941 26,432 Gain&o~pleofsse-ts-net' 154,423 95,618 (236,34o)
| |
| Misceqlaneops - net 255,640 373,024* (99,851)
| |
| (1, TOTAL.
| |
| AJNTEREST AND.OTHR CHARGES 476,877 735,601 7:P,97,266 Interest on long-term debt 82,471 65,047.: *51,024 Other interest - net -... 48,838 42j628 .21,319 Distributions on preferred securities of subsidiaries (22,585) (10,761) (7,937)
| |
| Allowance for borrowed funds used during construction 555,601. 8:.: 2 515- 862U272 TOTA(L: .
| |
| 951,693 1,052,364 l772,240 INCOME BEFORE INCOME TAXES 471,341 Income taxes 356,667 266,735 300,899 CONSOLIDATED NET INCOME 595,026 785,629 46,560 53,216 Preferred dividend requirements and other EARNINGS APPLICABLE TO
| |
| $552,459 $739,069 $247,683 COMMON STOCK Earnings per average common share:
| |
| Basic and diluted $2.25 $3.00 $1.03
| |
| $1.20 $1.50 $1.80 Dividends declared per common share Average number of common shares outstanding:
| |
| Basic 245,127,460 246,396,469 240,207,539 245,326,883 246,572,328 240,347,697 Diluted See Notes to Financial Statements.
| |
| *ENTERGY .C,1UOR~kflON.A* S*JBSIDIA1UkS CONSOLbDfltED STA1 I7EME1TS bIfCASH FLOWS "Forthe Years Ended December 31, 1999 1998 1997 LU (Ia Thousands)
| |
| OPERATING ACTIVITIES Consolidated net income $595,026 $785,629 $300,899 Noacash items included In net Income:,
| |
| Gain on Cajun Settlement (246,022)
| |
| Amortization of ratedeferrals 122,347 :. 237;102 ..
| |
| 421,803 Reserve for regap...dJs ts: 10,531 130,60*, , 381,285 Other regulatory dharges (credits) - net 8,113 35,136 (18,545)
| |
| Depreciation, amortization, and decommissioning 984,929 980,008 Deferred income taxes and investment tax credits (204,644) (64563) 0 (29.,291)
| |
| (252,955)
| |
| Allowance for equity funds used during construction : (1,2,ý465)
| |
| (7i,926)* .; '
| |
| (10,057)
| |
| Gain on sale of assets - net (274,941) (26,432)
| |
| Changes In workin dapital (net of effctsfrom nUisitroni and dispositions):
| |
| Receivables 9,246 (99,411)
| |
| Fuel inventory 20,272 Accounts payabl .
| |
| I I 229'; 181,243 Taxes accrued 158,733 '58505 143,151 Interest accrued (56,552*) .. (37,937)*"! (9,849)
| |
| Deferred fuel (71,072) (18,993) (28,412)
| |
| Other working capital accounts *" 45;285*; S,43,209 . (102,303)
| |
| Provision for estimated losses and reserves (59,464) .(133,880) (22,423)
| |
| Changes in other i yiati.oiy;us.ets (36,379) (13,684) 28,016 Proceeds from settlement ofCaj6n litigation.
| |
| - 102,299 Other 108,673 4 -- 50,204 Net cash flow providedby operating activities 1,307,369 1,752,698 1,792,771 INVESTING ACTIVITES Construction/capitql Cexenditures (1,195,750) ,I43. 2) (847,223)
| |
| Allowance for equit funds used during construction 29,291 "12465 10,057 Nuclear fuel purchake:.s. (137,649) " 102,747) (89,237)
| |
| Proceeds from sale/lesback of nucle6 fuel .
| |
| 137,093 128,2id 144,442 Proceeds from sale of businesses 351,082 2,275,014 54,153 Investment in other nonregulated/nonutility properties S "*: 8 * . : i"~~~~~~~(W 1 ,41.4 (2,039,370)
| |
| Proceeds fiom notes-r*ceivable 956,356 i7 ý .;- t .
| |
| Purchase of other tenlporary investments, (321,351) . (947,444)""
| |
| Decommissioning trust contributions and realized change in trust assets . ...
| |
| (61766) (731641- (68,139)
| |
| Other . (42258)
| |
| . . . . :Itt..'.L .* (15,966)
| |
| Net cash. flow provided4by (used In) Investing actlvIties (366,225) 63,23 t. (2,851,283)
| |
| See Notes to Financial Statements.
| |
| ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| FINANCING ACTIVITIES Proceeds from the Issuance of: 1,904,074 2,047,282 1,113,370 382,323 Long-tenn debt 19,341.. 305,379 Preferred securities of subsidiary tusts and partp.40ip 15,320 Cornmon stock
| |
| .,.(3,151,680) (751,669)
| |
| Retirement of: (1,195,451)
| |
| Long-term debt (245,004) S(2,9654)
| |
| (98,597) -(17,481) (124,367)
| |
| Repurchase of common stock (165,506) 205,412 142,025 Redemption of preferred stock Changes in short-term borrowings - net Dividends paid: (291,483) (373,.1) (438,183)
| |
| Common stock (43,621)
| |
| (46,480) (51,270)
| |
| Preferred stock (910,972) (1,463,508),- 1,511,520 Net cua flow provided by (used In) financing ap 1es (948) 1,567 (11,164)
| |
| Effect of exchange rates on and cash equilvalqts 29.,2,24,... 353,948 441,844 Net [ncreae In cash and cash equivalents 1,184,495 830,547 388,703 Cash and cash equivalents J-01411ulnii of pro
| |
| -$1,213,719r-. $1,184,495 $830,547 Cash and cash equivalents at end of period SUPPLEMENTAL DISCLOSURE'OF CASH FLOW INFORMATION:
| |
| Cash paid during the period "..
| |
| $601,739 $833,728
| |
| $273,935 $831,307
| |
| $390,238 Interest -net of amount capi"talzed $373,537 Income taxes Noncash investing and financing activities: .,1.* $46,325 $30,951 Change in unrealized appreciation of $41,582 $21,464 decommissioning bust assets
| |
| $319,056 Treasury shares issued to acquire security business Net assets acquired from Cajun settlement $471,284 Decommissioning trust fumdwacquired from Pilgrim acquisition See Notes to Financial Statements..
| |
| -65 -
| |
| | |
| ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ASSETS December31, 1999 1998 (In Thousands)
| |
| CURRENT ASSETS Cash and cash equivalents:
| |
| Cash $108,198 $386,764 Temporary cash investments - at cost, which approximates market 80;.21"
| |
| ! .... : - 797,731 Total cash and cash equivalents 1,213,719 1,184,495 Other temporary investments - at cost, whickhappmximates market 321,351 Notes r,*eivable 2,161 959,328 Accounts receivable:
| |
| Customer 290,331 280,648 Allowance for doubtful accounts (9,507) (10,300)
| |
| Other 207,898 197,362 Accrued unbilled revenues 298,616 245,350 Total receivables *7,87.,33 Deferred fuel costs 169,589 Fuel inventory - at average cost 94,419 Materials and supplies - at average cost 90,408 374,974 Rate deferrals 30,394 37,507 Deferred nuclear refueling outage costi 58,119 Prepayments and other 78,567 37,138 77p749 TOTAL . 3,219,132,.- *+3,643),945 . *
| |
| . OTHER PROPERTY AND INVESTMENTS I :.- , .. ,
| |
| lnvestmeht in subsidiary oonapanic¢ - at eqi.ity . 214 214 Decommissioning trust funds 1,246,023 Non-utility property - at cost (less accumulated depreciation) 709,018 317,165 275,421 Non-regulated investments 198,(l03 487,586.
| |
| Other - at cost (less accumulated depreciation) 16,714 16,041 TOTAL I1778,119 1,48-a,2o, UTILITY PLANT Electric 23,163,161
| |
| * 22,764,572 Plant acquisition adjustment 406,929 423,195 Property under capital lease 768,500 789,045' Natural gas Steam products 186,041 S183,621'
| |
| : 80,537 Construction work in progress 1,500,617 911,278 Nuclear fuel under capital lease 286,476 282,595 Nuclear fuel 87,693 29,690 TOTAL UTILITY PLANT 26,399,417 25,404,533 Less - accumulated depreciation and amortization 10,898,661 10,075,951 UTILITY PLANT - NET 15,500,756 15,328,582 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets:
| |
| Rate deferrals 16,581 125,095 SFAS 109 regulatory asset - net 1,068,006 1,141,318 Unamortized loss on reacquired debt 198,631 191,786 Other regulatory assets 637,870 528,179 Long-term receivables 32,260 34,617 Other 533,732 354,889 TOTAL 2,487,080 2,375,884 TOTAL ASSETS
| |
| $22,985,087 $22,836,694 See Notes to Financial Statements.
| |
| ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS LIABILITIES AND SHAREHOLDERS' EQUITY December31, 1999 1998 (In Thousamds)
| |
| CURRENT LIABILITIES $255,221 Currently maturing long-term debt $194,555 296,790 120,715 Notes payable 707,678 "522,072 Accounts payable 161,909 148,972 Customer deposits 445,677 284,847 Taxes accrued 72,640 31,976 Accumulated defnrd income taxes 11,216 16,991 Nuclear refueling outage costs 129,028 185,688 Interest accrued 7,018 4,073 Co-owner advances 178,247 176,270 Obligations under capital leases 125,749 58,909 Other 2j,154,432" 1,081,809 TOTAL DEFERRED CREDITS AND OTHER LIABILITIES 3,310,340 3,538,332 Accumulated deferred income taxes 519,910 565,744 Accumulated deferred investment tax credits 205,464 220,209 Obligations under capital leases 37,337 43,159 FERC settlement - refund obligation 199,139 153,163 Other regulatory liabilities 703,453 243,400 Decommissioning 157,034 90,623 Transition to competition 378,307 674,310 Regulatory reserves 279,425 252,32.1 Accumulated provisions 535,156 Other 6498,989 6,325,565 6,280,250 TOTAL Long-term debt 6,612,583., 6,59f,617 69,650 167,523 Preferred stock with sinking fund 150,000 150,000 Preference stock Company-obligated mandatorily redeemable preferred securities of subsidiary trusts holding 215,000 solelyjunior subordinated deferrable debentures 215,000 SHAREHOLDERS' EQUITY 338,455 Preferred stock without sinking fund 338,455 Common stock, $.01 par value, authorized 500,000,000 shares; issued 247,082,345 shares in 1999 and 2,471 2,468 246,829,076 shares in 1998 4,636,163 4,630,609 Paid-in capital 2,786,467 2,526,888 Retained earnings Accumulated other comprehensive loss: (68,782) (46,739)
| |
| Cumulative foreign currency translation adjustment (5,023)
| |
| Net unrealized investment losses Less - treasury stock, at cost (8,045,434 shares in 1999 and 231,894 6,186 208,907 shares in 1998) 7,457,857 7,445,495 TOTAL Commintments and Contingencies (Notes 2, 9,10, and 11)
| |
| $22,985,087 $22,836,694 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY See Notes to Financial Statements.
| |
| ENTERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF RETAINED EARNINGS, COMPREHENSIVE INCOME, AND PAID-IN CAPITAL For the Years Ended December 31, 1999 1991 1997 (In Thousands)
| |
| RETAINED EARNINGS Retained Earnings -Beginning of period $2,526,888 S2,157,912 S2,341,703 Add - Earnings applicable to common stock 552,459 $552,459 .739,069 $739,069 $247,683
| |
| .247,683 Deduct Dividends declared on common stock 294.,352 369,498 .432,268 Capital stock and other expenses (1,472) 595 (794)
| |
| ToWta 292,880 370,093 431,474 Retained Earnings - End of period S2,786,467 _2,526,888 $2,157,912 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
| |
| Balance at beginning of period ($46,739) ($69,817) $21,725 Foreign currency translation adjustuents (22,043) i22,043) 23,078 23,078 (91,542) (91,542)
| |
| Net unrealized investment losses (5,023) (5,023)
| |
| Balance at end ofperiod ($73,805) ($_L46,7.39)
| |
| Comprehensive Income $525,393 .$762,147 $156,141 PAID-IN CAPITAL Paid-in Capital - Beginning ofperiod $4,630,609 S4,613,572 $4,320,591 Add:
| |
| Gain on reacquisition of subsidiaries' preferred stock 273 Common stock issuances related to stock plans 5,554 17,037 S292,870 Total 5,554 17,037 293,143 Deduct Capital stock discount and other expenses 162 Total 162 Paid-in Capital - End of period $4,636,163 $4,613,572 See Notes to Financial Statements.
| |
| ENTERGy¥CORPORATION, AND SUBSIDIARIES SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 (1) 1997(2) 1996 (3) 1995 (In Thousands, Except Percentages and Per Sharie Amounts)
| |
| Operatingrevepues $ 8,773,228 $ 11,494,772 $ 9,538,926 $ 7,163,526 $ 6,273,072
| |
| $ 595,026 $ .785629, .$: 300,899, $ .490,563. 1$ 562,534 (5)
| |
| Conodtnet income...
| |
| anings per share 1.03 1.83 L $ 2.13 (5) dBasic andDiluted $ .2.25 $ :3.00 .
| |
| $ 1.20 $ 1.54 $ 1.80 -$ 1.80 $ 1.80
| |
| .jvidend*FlaredpWrsha1_e 'ty 7.77% 10.710%o, 3.71% 6.41% 8.11%
| |
| Returnonayeragec O n)m*ml $ .2.78. .$... ,"2'8.8Z*2,:,..
| |
| B~ok.; .ab*,per*,year~gd 28.41
| |
| ,........ ... per'ai.e,.year-end $ 2.78 2 $$ 27.23 $ 28.51 $
| |
| :2Tol asset. $ 22,9851087, *.22,8,36§,694. $ 27,000,700 $ 22,956,025 $22,265,930
| |
| ,1$.7,252,.67 $ 7,434. . 10,1!54,339 $ 8,335,150 $ 7,484,248
| |
| .Lpn o]igtipns (4) ,
| |
| CitiPower. in Xecember.1998,.
| |
| (1) Includes t.e ects of the sale of Lo.donElectripity and 1997.
| |
| (2) Includes the effects of the London Electricity acquisition in February (3) Includes the effects of the CitiPower acquisition in January 1996.
| |
| with sinking fund, preference (4) Includes long-term debt (excluding currently maturing debt), preferred stock and noncurrent capital-lease obligations.
| |
| stock, preferred securities of subsidiary trusts and partnership, (5) Represents income before cumulative effect of accounting changes.
| |
| 1999 1998 1997 1996 1995 (Dollars In Thousands)
| |
| Operating Revenues: $2,177,348
| |
| $2,231,091 $2,299,317 $2,271,363 $2,277,647 1,491,818 Residential 1,502,267 1,513,050 1,581,878 1,573,251 1,810,045 Commercial 1,878,363 1,829,085 2,018,625 1,987,640 154,032 Industrial 163,403 172,368 171,773 169,287 5,633,243 Governmental 5,775,124 5,813,820 6,043,639 6,007,825 334,874 Total retail 397,844 448,842 359,881 376,011 Sales for resale 119,901 98,446 (126,340) 135,311 67,104 $6,088,018 Other (1)
| |
| $6,271,414 $6,136,322 $6,538,831 $6,450,940 Total Billed Electric Energy Sales (GWH): 27,704 30,631 30,935 28,286 28,303 20,719 Residential 21,671 21,234 23,775 23,177 42,260 Commercial 44,649 44,340 43,549 43,453 2,311 Industrial 2,507 2,449 2,564 2,659 92,994 Governmental 97,113 96,326 100,519 100,224 10,471 Total retail 9,707 10,583 9,714 11,187 103,465 Sales for resale 106,820 106,909 110,233 111,411 Total (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 Arkansas, Inc.:
| |
| 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 respects, the financial position of Entergy Arkansas, 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 condicted our audits of these statements 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 ahiounts 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 reasonable basis for the opinion expressed above.
| |
| PricewaterhouseCoopers LLP New Orleans, Louisiana February 17, 2000 ENTERGY ARKANSAS, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net Income operating revenues and increased operation Net income decreased in 1999 primarily due to decreased electric and maintenance expenses, partially offset by lower regulatory charges.
| |
| revenues which were partially Net income decreased in 1998 primarily due to decreased electric operating lower interest charges.
| |
| offset by lower operation and maintenanqe expenses and Revenues and Sales ended December 31, 1999 and 1998 are as The changes in electric operating revenues for the twelve months follows:
| |
| Increase/(Decrease)
| |
| Description 1999 1998 (In Millions)
| |
| $4.5 ($7.0)
| |
| Base revenues (68.2) (106.0)
| |
| -* tý riders 36.4 (21.8)
| |
| Fuel cost recovery 3.8 55.8 Sales volume/weathe (25.2) 11.4
| |
| .0therrevenue (including unbilled) 4(18.1)
| |
| Sales for resale
| |
| ($66.8) ($107.0)
| |
| Total Rate riders because specific incurred expenses offset them.
| |
| Rate rider revenues have no material effect on net income a revised Grand Gulf rider, which includes the In 1999, rate rider revenues decreased as a result of partially offset by the Grand Gulf Accelerated completibp of the Grand Gulf 1 phase-*"I pliin in November 1998, Entergy Arkansas to pay down a portion of its Grand Recovery Tariff (GGART). The GGART is designed to' allow and implemedtation of-retail access in Arkansas. The rider Gulf purchased power obligation in advance of the in Note 2.to in January 1999. The GGARET is discussed further GGART became effective with the first'billing cycle the financial statements.
| |
| a decline in the Grand Gulf 1 cost recovery rate rider In 1998, rate rider revenues decreased primarily due to plan, which was completed in November 1998, revenues. This- decline reflects scheduled reductions in the phase-in in the APSC. This agreement is discussed in more detail and reductions required by the settlement agreement with Note 2 to the financial statements.
| |
| Fuel cost recovery they are an increase to revenues that are offset Fuel cost recovery revenues do not affect net income because by specific incurred fuel costs.
| |
| increase in the energy cost recovery factor, effective Fuel cost recovery revenues increased in 1999 due to an in 1998, which lowered 1998 fuel cost recovery.
| |
| in April 1999, and the completion of a customer refund obligation ENTERGY ARKANSAS, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS In 1998, fuel cost recovery revenues decreased due to unfavorable pricing resulting from a change to a fixed fuel factor in January 1998, partially-offset by in inicrease in generation.
| |
| Other revenue In 1999, other revenue decreased primarily as a result of a change in estimated 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 is expected to affect comparisons of revenue applicable to prior period amounts through the first quarter of 2000. Comparative impacts are also affected by seasonal -npmactson demand.
| |
| In 1998, other revenue, primarily unbilled, increased as a result of significantly warmer weather as compared to 1997.
| |
| Sales for resale In 1999, sales for resale decreased 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 associated companies. The decrease resulted from reduced generation due to outages at both ANOI and ANO2 and restricted generation due to disruption in coal deliveries during the second quarter of 1998. This decrease was partially offset by an increase in sales revenue from nou!-associated companies as a result of short-term contracts with certain wholesale customers.
| |
| Expenses Fuel and purchased power expenses In 1999, fuel expenses increased primarily due to:
| |
| o higher-priced gas generation as a result of refueling, outages at ANOI and ANO2, a mid-cycle maintenance outage at ANO2, limited cpal capability at White. Bluff during parts of i6e year, and displacem of higher priced pur9based p9wer; o increased purchased power costs due to higher market prices in July and August 1999; and 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 fuel cost recovery.
| |
| The increase in the energy cost recovery Tate allows Entergy Arkansas to recover previously under-recovered fuel expenses.
| |
| In 1998, fuel expenses decreased primarily due to the impact of the under-recovered deferred fuel cost in excess of the fixed fuel factor implemented in January 1998, billed to retail customers.
| |
| Other operation and maintenance 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.
| |
| -72 -
| |
| | |
| ENTERGY ARKANSAS, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Other retaliatory charges as a result of lower accruals for transition costs in In 1999, other regulatory charges decreased primarily low-level radioactive waste facility.
| |
| 1999, partially offset by the 1998 reversal of the 1997 reserve recorded for the cost account, In 1998, other regulatory charges increased as a result of additional accruals for the transition reserve for costs and the reversal of the 1997 partially offset by a small over-recovery of Grand Gulf I related previously deferred radioactive waste facility costs.
| |
| the financial statements.
| |
| The transition cost account is discussed in more detail in Note 2 to Amortization of rafte deferrals 1998 completion of the Grand Gulf 1 In 1999, amortization of rate deferrals decreased due to the November rate phase-in plan. These phase-ins had no material effect on net income.
| |
| decrease in the amortization In 1998, the amortization of Grand Gulf 1 rate deferrals decrease die to a in November 1998.
| |
| prescribed in the Grand Gulf 1 rate phase-in plan, which was completed Other Other income non-operating income, reduced other interest Other -income decreased in 1999 due to reduced miscellaneous Grand Gulf 1 carnylg charges, which was partially offset income, and the completion in 1998 of the.amortization of Other interest income includes income from intercompany by accruals for equity fnids used during construction.
| |
| increased due to capital charges on projects in 1999.
| |
| loans. The allowance for equity funds used during construction I carrying charges as a result of a decline in the Other income decreased in 1998. due to reduced Grand Gulf deferral balance, which does not impact net income.
| |
| Intere charae .
| |
| long-term debt and decreased borrowings Interest charges decreased in 1999 due to the retirement of certain an partially offset by an adjustment for interest expense on for funds used during construction. These decreases were income tax settlement from prior years.
| |
| certain long-term debt.
| |
| Interest charges decreased in 1998 due to the retirement of Income taxes were 43.8 %, 39.1% and 31.6%, respectively.
| |
| The effective income tax rates for 1999, 1998, and 1997 tax depreciation deductions, The effective income tax rate increased in 1999 primarily is due to accelerated assets.
| |
| a shorter tax life on certain for which deferred taxes have not been normalized, reflecting to the reversal of previously recorded AFUDC The effective income tax rate increased in 1998 primarily due amounts included in depreciation.
| |
| -73 -
| |
| | |
| ENTERGY ARKANSAS, INC INCOME STATEMENTS For the Years Ended December 31, 1999! 1998 1997 (In Thousands)
| |
| OPERATING REVENUES Domestic electric $1,541,894 $1,608,698 7 $1,715,714 OPERATING EXPENSES Operating and Maintenance:
| |
| Fuel, fuel-related expenses, and gas purchased for resale 257,946 204,318 254,703, Purchased power 455,425'. 410 ,947 419,128 Nuclear refueling outage expenses 29,857 32,046 21,969:
| |
| Other operation and maintenance 389,462 358,006 360,860 Decommissioning 10,670 15,583 17,306 Taxes other than, income taxes 36,669 .37,223 36,700 Depreciation and amortization 161.234 165,853 149,346 Other regulatory charges - net 5,230 45,658 29,686 Amortization of rate deferrals 75,249 153,141 TOTAL 1,346,493 1,353,883 1,448,839 OPERATING INCOME 195,401. 254,815 266,875 OTHER INCOME Allowance for equityfunids usedduiring construction 1 866 - ' -. 5,921' 3,563 Gain on sale of assets -- 1,777 113.
| |
| 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 Distributions on preferred securities of subsidiary 5j'oo 5,100 5.100 Allowance for borrowed funds used during construction (4,205) (2,261)
| |
| (8,459)
| |
| TOTAL 88,564 92,480 101,904 INCOME BEFORE INCOME TAXES 123.325 182,325 :187,197 Income taxes 54,012: 71,374 J.59,220 NET INCOME 69,313 110,951 127,977 Preferred dividend requirements and other 10,854 10,201 10,988 EARNINGS APPLICABLE TO COMMON STOCK $58,459 $100,750 $11.,989 See Notes to Financial Statements.
| |
| ENTERGY ARKANSAS, INC sTATEMNTS OFCASH FLOWS For the Years Ended December 31, 1999 199s 1997 (InThosads)
| |
| $69,313 $110,951 $127,977 Net Income 153,141 Noncash items included In net Income: 73,249 45,658 29,686 Amortization of rate deferrals 5,230 181,436 166,652 Other regulatory charges - net 171,904 (77,814)
| |
| Depreciation. amortization, and decommissioning 22,421 (3,563)
| |
| Deferred income taxes and investment tax credits (12.866)
| |
| (1,777) (113)
| |
| Allowance for equity funds used during construction
| |
| * Gain on sale 4fassets Chuanges in working capital: 40,375 61,143 (14,828)
| |
| Receivables (4,633) 'S8,117 29,150 Fuel inventory 56,985 * (7,911) (25,451)
| |
| Accounts payable (30,054) (8,742). 23,133 Taxe accrued (2.908)
| |
| Interest accrued' (429) (5,45) (9,289)
| |
| Defefredfuel costs 2,444 (6184ý)(931)
| |
| Other working capital accounts; 2,032, 9,594 Provision for-cstimated losses and reserves 45,8989 (11,02?. (7,150)
| |
| Changes in-other regulatory assets 4j.499 33,374 Other 408,191 434,769 Net cash now provided by operating activities INVESTING ACTIVITIES (190,459) (140,913)
| |
| (238.009) 3,563
| |
| -Construction expenditures i266~
| |
| (45,845). (59,104)
| |
| Allowance for equity funds used during construction (32j,517)ý 42,05S 59,065 Nuclear fuel purchases 32,517 proceeds ftomvstseilascback of nu&ar fuel (24,956)
| |
| Decommissioninfg trust contributions and realized (17.744)(25.9"9)
| |
| (162,345) change #i trust assets (242,889) (214,25,71-Net cash flow used in Investing activities FINANCING ACTIVITIES Proceeds from Issuance of. 129,564 Long-term 4flt (39,607),* ' (i'5t,424Yý (9,000)
| |
| Long-tenn debt. (22,666)** (9f.004 Redemaption'of preferred stock
| |
| -(92,60O) (128,600)
| |
| Dividends pald., (82,700)
| |
| Commoon stock ~11,696 (*10;407) (11,194) f341 (136,817)
| |
| Preferred stock (156,669)
| |
| Net cash flok used In finnscing icttltes, (69,897) 135,607 (86,243), ..
| |
| Net increase (decreasb) in cash and cash equivalents 93,jQ5 162,002 26,395 Cash and cash equivalents at beginning of period
| |
| $6,962 $93,105 $162,002 Cashand cash equivalents at end of -period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
| |
| Cash paid during the period'fior: $94,872 $95,050 ,. $98,013 interest - net of amount capitalized $61,273 101,407 $111,394 Incomie taxes Noncash investing and financing activities:
| |
| Change in unrealized appreciation of $22,980 $26,782 $22,343 decommissioning trust assets See Notes to Financial Statements.
| |
| ENTERGY ARKANSAS, INC.
| |
| BALANCE SHEETS ASSETS December 31, 1999 1998 V(n Tlioosauud)
| |
| CUJRRENT ASSETS Cash and cash equivalents:
| |
| Cash $6.862 'S9,814 Temporary cash investments - at cost, whicb approximates market
| |
| - d2"201 Total cash and cash equivalents 6,862 03,10q5 Accounts receivable:
| |
| Customer 73,357 72,234, Allowance for doubtful accounts (1.768) (1,753).,
| |
| Associated companies 27,073 50,145 Other 5,583 4;510 Accrued unbilled revenues 53,600 73,083 Total receivables 157,845 1.98,219)
| |
| Deferred fuel costs 41.620 Fuel inventory - at average cost .19,85 24,485' Materials and supplies - at average cost 85,612" 89,033 Deferred, nuclear refueling outage costs
| |
| .28,119 17,787 Prepayments and other "6,480' TOTAL
| |
| .351,023 464,744 OTHER PROPERTY AND INVESTMENTS Investment in subsidiary companies - at equity 11,215 11,.213 Decommissioning trust funds 344.011 303,286 Non-utility propert - at cost (less accumulated depreciation) 1,463.
| |
| Other - at cost (less, accumulated depreciation) 3,033 3,602-.ý:
| |
| TOTAL - ! .-- -. 359,722 319,569 -ý.:1 UTILITY PLANT Electric 4,854,433 4,731'699-"
| |
| Property under capital lease 44,471 49.415" Construction work in progress, 267,091 201,853'"
| |
| Nuclear fuael. under capital lease 85,725 Nuclear fuel 9,449 TOTAL UTILITY PLANT 5,261,169 5.078,556,.,'
| |
| Less - accumulated depreciations and amortization 2,401,021 2,275,170 UTILITY PLANT - NET DEFERRED DEBITS AND OTH ER ASSETS Regulatory assets:
| |
| SFAS.1 09 regulatory. asset.-, aet -192,344 248,275 Unamortized loss on reacquired debt 48,193 51,747 Other rieg'ulatory assets 106,959 96,927 Other 14.125 22,003 TOTAL 36 t'62-TOTAL ASSETS S3,932,514 I 4,006,651 See Notes to Financial Statements.
| |
| - 76 -
| |
| | |
| *WERGY AMkAN§ INC LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 1999 1998 (In Thousands)
| |
| "CURRENTLIABILrITES Currently maturing long-term debt S220 $1,094 667 667 Notes payable Accounts payable:
| |
| 81,958 47,963 Associated companies Other 102.959 79.969 Customer deposits 26,320 25,196 38,532.: .68,585 Taxes accrued 38,649 .24,162
| |
| *Accumulated deferred income taxes ., 25,285 interest accrued. 22,378 15,338 ..4.073 Co-owner advances 55,150 .64,068 Obligations under capital leases 11,598 16,183 Othei TOTAL 393,769 357.245 DEFER D CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 713,622 756.571 Accumulated deferred investment tax credits 94,852 98.768
| |
| ' "" 80.,936 Obligations under capital leases '15:045 88.563 65.583 Other regulatory liabilities 109,933 90.623 Transition to competition Accumulated provisions 43.288 51,404 Other 51,080 56,400 TOTAL 1.176,383 1,200,285 Long-term debt 1,130,801 1.172,285 Preferred stock with sinking fund 22,O27 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding 60.000 60.000 solely junior subordinated deferrable debentures SHAREHOLDERS' EQUITY Preferred stock without sinking fund 116,350 116,350 Common stock, $0.01 par value, authorized 325.000.000 shares: issued and outstanding 46,980.196 shares in 1999 470 470 and 1998 591,127 590,134 Paid-in capital 463,614 487,855 Retained earnings TOTAL 1,171,561 1,194,809 Commitments and Contingencies (Notes 2. 9. and 10)
| |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $3,932,514 $4,006,651 See Notes to Financial Statements.
| |
| ENTERGYARKANSAS, INC.
| |
| STATEMENTS OF RETAINED EARNINGS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| Retained Earnings, January 1 $487.,855 $479,705 $491,316 Add:
| |
| Net income 69,313 110,951 127,977 Deducte Dividends declared:
| |
| Prefered stock 9,223 10,201 .10,988 ComaMon stock 82,700 92,600 128,600 CaTital stock expensesand other 1,631 Total 93,554 102,801 139,588 Retained Earnings, December 31 (Note 8) $463,614 $487,855 $479,705 See otes to Financial Sat ments.
| |
| ENtEkGY ARKANSAS, INC.
| |
| SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 1996 1995 (In Thousands)
| |
| L Operting-revenu-s $1,541,894.. $608698-$I1,715,714 *$1,743,433 $1,648,233 (2)
| |
| Net income $- 69,313: .. $ 110,95L1 $.S127,977 $ 157,798 $ 136,665 Total-assets -,$3,932,514 .-. $4,006,5.1: -$4,106,877. "-$4,153,817 $4,204,415 Long-term abligatios (1) $14265,846- %,1335,248. $1,419,728. 1. *$1,439,355 $1,423,804 (1) Includes long-term debt (excluding :currently maturing debt), prferretd stock with sinking fund, preferred securities 'ofsubsidiary trast, and noncurrentodpitallease obligations.
| |
| j! V":.
| |
| (2) 'Repregets income befofe cumulative effect of .wounting changes. -
| |
| 1999 1998 1997 1996 1995 (Dollars In Thousands)
| |
| Electric Operating Revenues:
| |
| 1$546,100 $542,862 Residential $533,245 $562,325 $551,821 288,677 288,816 332,715 323,328 318,475 Commercial 362,854 335,824 330,016 372,083 364,943 Industrial 17,084 14,606 14,640 18,200 16,989 Governmental 1,241,275 1,172,352 1,195,797 1,274,819 1,251,360 Total retail Sales for resale: 178,885 Associated companies 178,150 149,603 213,845 248,211 207,887 195,844 Non-associated companies 193,449 240,090 215,249 35,975 32,229 Other (2,057) 23,208 11,801
| |
| $1,743,433 $1,648,233 Total $1,541,894 $1,608,698 $1,715,714 Billed Electric Energy Sales (GWH): 5,868 Residential 6,493 6,613 5,988 6,023 4,390 4,267 Commercial 4,880 4,773 4,445 6,487 6,314 Industrial 7,054 6,837 6,647 234 243 Governmental 237 233 239 17,134 16,692 Total retail 18,664 18,456 17,319 Sales for resale:
| |
| Associated companies 7,592 6,500 9,557 10,471 8,386 4,868 5,948 6,828 6,720 5,066 Non-associated companies 31,124 30,904 33,704 34,325 30,144 Total Report of Independent Accountants To the Board of Directors and Shareholders of Entergy Gulf States, Inc.:
| |
| 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 respects, the financial 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 toexpress 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, Ahieh require that we plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free of material misstatemnnt. An audit includes examining, on a test basis, evidence supporting the mounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evahqating. the 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.
| |
| ...MANAGEMENTS: FINANCIAL DISCUSSION-AND ANALYSIS RESULTS OF OPERATIONS
| |
| .Net Income Net income increased in 1999 pr y due to increased unbilled revenues, decreased provisions for rate refunds in 1999, decreased,.depreciation and amortization expenses, and decreased interest expense, partially offset by increased operation aid 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; the write-off of radioactive wiste facilities of $7.4 '"lion recorded in 1997; and the' 1997 recording of
| |
| $146.6 million to income relating to the settlement of litigation with Cajun. The increase i 1998, excluding these items, was due to decreased operating expenses, partially offset by increased income taxes.
| |
| 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:
| |
| Increase/(Decrease)
| |
| Description 1999 1998 (In Millions)
| |
| Baser ues $V46.4- ($229.3)
| |
| " Uel cost recovery 104.9 1.6 Sales volume/weather 1.0 61.2 Other revenue (including unbilled), 31.3 (171.5)
| |
| Sales:for resale 21.2 53.1 Total- - $304.8 ($283.9)
| |
| Base revenues In 1999, base revenues increased due to:
| |
| "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 November 1996 and 1998 rate filing* . The settlement agreement was approved by the PUCT in June 1999_.% The'fiet. income: effect of this reversal is largely offset by the amortization. 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 offsettingthese increases were:
| |
| o annual base'rate reductions of $87 million and $18 million thit were implemented for Louisiana retail customers in February and August 1998, respectively; o annual base rat reluctions of $69 million and $4.2 million that were implemented for Texas retail customers in Decembcr 1998 and March 1999, respectively; and o reserves recorded in the Louisiana jurisdiction in 1999 for the estimated outcomes of annual earnings reviews.
| |
| ENTERGY GULF STATES, INC.
| |
| MANAGEMENT'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 of tax).
| |
| The LPSC and PUCT rate issues are discussed 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.
| |
| In 1999, fuel cost recovery revenues increased due to a higher fuel fetor in 1999 and a fuel surcharge implemented in February 1999 in 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 treatment, This change is expected to affect comparisons of revenue to applicable prior period amounts through the first quarter of 2000. Comparative impacts are also affected by seasonal variations in demand.
| |
| In 1998, other revenue decreased primarily due 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 reductions.
| |
| 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 1 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 FINANCIAL DISCUSSION AND ANALYSIS 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.
| |
| Expen Fuel and purcehased power In 1999, fuel and purchased power expenses increased due to:
| |
| "o increased gas expnes resulting from a shift to gas generation during. te Arst six months of 1999 because of the reduced availability of Nelson 6 and an extended refueling outage at 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 fuel expen-sess..
| |
| Other operation and maintenance expenses 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 increased as a result of the settlement of litigation with Cajun in December 1997, to River Bend owned by Cajun was transferred by the pursuant to which the 30% interest inStates Cajun bankruptc trustee Entergy Gulf now includes 100% of River Bend's operation and maintenance expenses in its operating expenses, as compared to 70% of suIh expenses' for the year ended December 31, 1997.
| |
| Depreciation and amortization In 1999, depreciation and amortization decreased due to:
| |
| " lower depreciation as a result of the write-down of the River Bend abeyed plant as required by the Texas rate settlement;
| |
| " reduced amortization of the. River Bend Unit 2 cancellation loss as a result of the. completion of amortization for the Louisiana portion of the loss and the reduction in amortization of the Texas portion in accordance with a PUCT rate order; and "o lower 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 ENTERGY GULF STATES, INC.
| |
| MANAGEMENT'S ANA1CIAL ISCUSSION AND ANALYSIS RES OF OPERATIONS o deferral of Year 2000 costs in accordance with an LPSC order. These costs are to be amortized over a five-year period.
| |
| Amortization of rate deferrals In 1999, the amortization of rate deferrals increased due to the reduction of accounting order deferrals 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 from 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 plan for River Bend.
| |
| Other Other income In 1998, other income increased primarily-due to the 1997 reserve for rigulatoq adjustments of$311million
| |
| ($185.4 million net oftax). This increase was partially offset by interestincome of $19.6 milhion"($11.6 million net of tax) related to the settlement of litigation with Cajun recorded in December 1997.
| |
| Interest charges In 1999, interest charges decreased as a-resuli of the retirement, redemption, and 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 Interest charges remain- relatively unchanged in 1998. Total interest expense decreased as a result of the retirement, redemption, and riefiacing of certain Ilong-term debt in" 1997 and 1998. This decirase was offset by an increase in other interest due to the interest component of the provisions recorded for anticipated rate refunds in Louisiana.
| |
| Income taxes The effective income tax rates for 1999, 1998, and 1997 are 37.6%, 40.6%, and 27.2%, respectively.
| |
| The decrease in the effective income tax rate in 1999 is due to accelerated tax depreciation deductions, for which deferred taxes have not been normalized, reflecting a shorter tax life on certain assetsi.
| |
| The increase in the effective income tax rate in 1998 is due to a decrease in the flow-through of tax benefits related to operating reserves and the increased reversal of previously recorded AFUDC amounts included in depreciation.
| |
| ENTERGY GULF STATES, INC.
| |
| INCOME STATEMENTS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING REVENUES
| |
| $2,082,358 $1.777.584 $2.061.511 Domestic electric 33,058 42.654 28,998 Natural gas 43,167 43.664 15,852 Steam products 1,853,809 2,147.829 2.127,208 TOTAL OPERATING EXPENSES Operating and Maintenance:
| |
| Fuel, fuel-related expenses, and 538,388 560.104 634,726 gas purchased for resale 317,684 327.037 365,245 Purchased power 14,293 10,829 16,307 Nuclear refueling outage expenses 411,372 316.253 419,713 Other operation and maintenance 8.855 7,588 3,437 Decommissioning 120,782 109.572 111.872 Taxes other than income taxes 195.935 205.789 185.254 Depreciation and amortization (5.485) (26.611)
| |
| (24,092)
| |
| Other regulatory credits - net 21,749 105.455 89,597 Amortization of rate deferrals 1,618,155 1,617,283 1,806,210 TOTAL 530.546 OPERATING INCOME 320,998 235.654 OTHER INCOME (DEDUCTIONS) 2.211 Allowance for equity funds used during construction 6,306 2,143 2,046 1.816 Gain on sale of assets 14,903 (272,135)
| |
| I9,073.
| |
| Miscellaneous - net 18,862 (269.924) 26,425 TOTAL INTEREST AND OTHER CHARGES 163,146 138,602 149,767 Interest on long-term debt 6,994 21,016 10.026 Other interest - net 7,437 6,901 7,438 Distributions on preferred securities of subsidiary (5.776) (1.870) (1,829)
| |
| Allowance for borrowed funds used during construction 147.258 176,350 178,244 TOTAL 200.165 78,166 82.378 INCOME BEFORE INCOME TAXES Income taxes 75,165 31,773 22,402 125,000 46,393 59,976 NET INCOME 17,423 19,011 23,865 Preferred dividend requirements and other EARNINGS APPLICABLE TO S27,382 $36,111
| |
| $107,577 COMMON STOCK See Notes to Financial Statements.
| |
| (Page left blank intentionally)
| |
| .ENTERGY GULF STATES, INC.
| |
| SMATEMENTS OF CASH FLOWS
| |
| .For the Years Ended December 31, 1999 1998 1997*
| |
| (In Thousands)
| |
| -OPERATING ACTIVITIES, S125,000 $46393 $59,976 Net income Noncash Itemse included in net Income: (246,022)
| |
| Gain on Cajun Settlement 89,597 21,749 105,455 Amortization of rte deferals 130.603 391.285 (97.953)
| |
| Reserve for regulatory adjustments (24,092) (5,48-5) (26.611)
| |
| Other regulshoty credits - net 192,842 199,372' 214,644 Depreciati*n amoTtizebon., anddecompissioning (1.495) (29,174) (52,486)
| |
| Deferred income taxes and investment tax credits (6,306) (2.143) (2,211)
| |
| Allowance for-equity fonds used during construction (2,046) (1,816) (1,399)
| |
| Gain on sale of assets Changes In working capital: 9,791 65,527 (1 1,834)
| |
| Receivables (8,070) 7,426 7,382 Fuel inventory 42,370 (6,135) 16,999 46.0 18 7,462 12,171 Taxes accrued (1 4,061) (2,523) (4,497) interest accrued (1,561) f2,86T (46,254)
| |
| Deferred fuel costs '(160,54) '1 1,006 (11,765)
| |
| Other working capital accounts 8,496 '(4.207) (5,852)
| |
| Provision fores imae losses and.reseres (59,242) (3.226) 44,883 Changes. in other regulatory assets 102,299 Proceeds fuom settjement of Cajun 'litigatgon 36,817 458 Other 345,151 448,148 483,709 Net cash flow provided by operating activities INVLSTIN[G ACI'WITIES
| |
| .,(199,076) (136,96.0), (132,566)
| |
| Constructio9 expendibturs 6,306 2,143 2,211 Allowance kwr eqit fid used duniag costuýin (53,293) (1,977) (25,522)
| |
| Nuclear hia purchases 53,293 15,932 25,522 Proceeds from sale/leaseback of nuclear fuel Decommissionin trust contributions and realized (1,5)(11,899) (9,540) change in trust, assets Net caoh flow used InInvesting actities FINANCING ACTIVITIES Proceeds from Issuance of:.
| |
| t22.906 21,600 Long4-te debt 82,323 Preferred seedrities of subsidiary trust Retirement of (197,960)1 (21,2,090) (183,105)
| |
| Long-term debt (25,931) (8,48 1) (93,367)
| |
| Redemption ofpreferred stock Dividends paid: (107,000) (1ý09,400) (77,200)
| |
| Common stock (16,967) (19'm5)
| |
| Preferred stock (327,426)
| |
| (224,952)
| |
| Net cash Rlow used in financing activities (83.424) (12,039) 50,603 Net bwcrepe (decrease) in cash and cash equivalents 115,736 127,775 77,172 Cash and cahequivalents at beginning of period
| |
| $32,312 $115,736 $127,775 Cash and Cash equivalents at dnulfof period SUPPLEMENTAL DISCLOSURE O.F.CASH FLOW INFORMATION:
| |
| Cash paid during the period for:
| |
| $161,326 S173,599 $171,874 Interest - net of amount capitalized $46,620 $50,477
| |
| $28,410 Income taxes Noncash investing and financing activities:
| |
| Change in unrealized appreciation of $10,410
| |
| $14,054 $3,939 decommissioning trust assets $319.056 Net assets acquired from Cajun settlement See Notes to Financial Statements.
| |
| -87 -
| |
| * ENTERGY GULF STATES, INC.
| |
| BALANCESHEETS ASSETS December 31, 1999 1998 (In Thousands)
| |
| CURRENT ASSETS Cash and cash equivalents:
| |
| Cash $8,607 s! i,629 Temporary cash investments - at cost.
| |
| which approximates market 23,705 104,107 Total cash and cash equivalents 32,312 I 15,736 Accounts receivable:
| |
| 73,21.5 S78,961 Customer Allowance for doubtful accounts (1,828) (1,735)
| |
| Associated companies 1,706 23,250 Other 15.030 28,265 Accrued unbilled revenues 90,396 59,569 Total receivables 178,519 i58,3 10 Deferred fuel costs 134,458 132:896 38,271 30,201 Fuel inventory - at average cost Materials and supplies - at average cost 112,585 108,346 Rate deferrals 5,606.. 9,077 Prepayments and other 21.750 20,495 TOTAL 605.,061
| |
| .*,0 ..
| |
| OTHER PROPERTY AND INVESTMENTS Decommissioning trust funds 234,677 209,770 Non-utility property - at cost (less accumulated depreciatiop) 2.8* 7_759: 165,272 Other - at cost (less accumulated depreciation) 13,681 - 12,426 TOTAL "436,1 7 " 387,468 UTILITY PLANT Electric 7,365.407 "7.250,789 Property under capital tease 46.210 54,427 Natural gas 52.473 51,053 Steam products 80,537 Construction work in progress 145,492 105,121 Nuclear fuel under capital lease 70,801 46,572..
| |
| TOTAL UTILITY PLANT 7.680,383 7,588,499.
| |
| Less - accumulated depreciation and amortization 3,534.473 3,141,518 UTILITY PLANT - NET 4,145,910 4,446,981 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets:
| |
| Rate deferrals 5.606 89,333 SFAS 109 regulatory asset"- net 3852405 316.406 Unamortized loss on reacquired debt 40.576ý 42.879 t40.154 *" 89,914 Other regulatory assets Long-term receivables 32,260 34,617 Other 23,490 221,085 TOTAL .A 7,494 854,234;:
| |
| TOTAL ASSETS : :$5,733,022 . $6,293,744 See Notes to Financial Statements.
| |
| ENTERGY GULF STATES, INC BALANCE S1-EETS LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 1999 1998 (In Thousands)
| |
| CURRENT LIABILITIES Currently maturing long-term debt $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 51.973 34,343 Other. 14,557 1*,325 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 V.038 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 Conmnon 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 $6,293,744 See Notes to Financial Statements.
| |
| ENTERGY GULF STATES, INC.
| |
| STATEMENTS OF RETAINED EARNINGS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| Retained Earnings, January 1 $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 Retained Earnings, December 3 1 (Note 8) $202,782 $202,205 $284,165 See Notes to Financial Statements.
| |
| ENTERGY GULF STArES, INC. AND SUBSIDIARIES SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 1996 1995 (In Thousands)
| |
| $2,127,208 $ 1,853,809 --$-2,147,4829 $2,019J81 $1,861,974 Operating revenues
| |
| --46,393 $ 5,7 $ (3,87) $ 122,919 Net income (loss)- $V 125;000 4$6,293,744 $ 6,488,637 $6,421,179 $6,861,058 Totalassets' * $ 5,733,022
| |
| $ 1,993,811 4:,,$ 2,098,752 $2,226,329- $2,521,203 Long-enn obligations (1) 1,966,269 1$
| |
| (1) IIncludds long-term debt (excluding currently maturing debt), preferred and preference stock with sinking fund, preferred securities o'subsidiary trust, and noncurrent' capital le"e obligdtions.
| |
| 1999 1998a 1 1996 ' 1995 I Thousands)
| |
| (Dollars'o Electric Operating Revenues:
| |
| Residential $607,875 $605,759 $624,862. * $612,39*.§ $573,566 430,291 422,944 452,724 444,133 412,601 Commercial 718,779 704,393 740,418 685,198 .604,688 Industrial 28,475 35,930 33,774 31:,023 25,042 Governmental Total retail 1,785,420 1,769,026 1,851,778 1,772,732 1,615,897 Sales for resale:
| |
| 38,416 14,172 14,260 20,783 62,431 Associated companies 109,132 112,182 59,015 76,173 67,103 Non-associated companies 149,390 (117,796) 136,458 56,300 43,533 Other (I)
| |
| $2,082,358 $1,777,584 $2,061,511 $1,925,988 $1,788,964 Total Billed Electric Energy Sales (GWH):
| |
| Residential 8,929 8,903 8,178 8,035 7,699 7,310 6,975 6,575 6,417 6,219 Commercial 17,684 18,158 18,038 16,661 15,393 Industrial 425 1560 481 438 311 Governmental 34,348 34,596 33,272 31,551 29,622 Total retail Sales for resale:
| |
| 677 380 414 656 2,935 Associated companies 3,408 3,701 1,503 2,148 2,212 Non-associated companies 38,677 35,189 34,355 34,769 Total Electric Department 38,433 (1) 1998 includes the effects of an Entergy Gulf States reserve for rate refund.
| |
| Report of Independent Accountants To the Board of Directors and Shareholders of Entergy Louisiana, Inc.:
| |
| In ouropinion, the accompanying 'balance sheets and the related statements of income, of retained earnings and of cash flows present fairly, in all material respects, the financial position of Entergy Louisiana, 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 ,j the United, States, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are fiue of material misstaement An audit includes examinin"g on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and ,sigdificantestimates made by management, and evaluating the 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 LOUISIANA, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OFOPERATIONS Net Income Net income increased in 1999 primarily 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 refudds.
| |
| 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 The cha*aS inweldtrii operating revenues for:the-twelve months ended December 31, 1999 and 1998 are as follows:
| |
| Increasel(Decrease)
| |
| Description 1999 1998 (In Millions)
| |
| Base revenues ($48.7) ($35.0)
| |
| . Fu.i cost recovery 63.6 (95.4)
| |
| Sales volume/weth(5.3) 30.$
| |
| Other revenue (including unbilled) 74.5 (3.2)
| |
| Sales for resale 11.6 10.4 Total $95.7 Base revenues In 1999, base revenues decreased primarily due to accruals for potential rate refinds,,.
| |
| In 1998, base revenues decreased due to base rate reductions that became effactive 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 at Waterford 3 in 1999.
| |
| In 1998, fuel cost recovery revenues decreased due to lower pricing resulting from a change in generation mix.
| |
| ENTERGY LOUISIANA,'INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTSOF OPERATIONS Sales volume/weather In 1999, sales volume decreased primarily due to less favorable weather, partially offset by increased Usage by residential and industrial customers.
| |
| 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,1999, other revenue increased. primarily due to a change in estimated unbilled revenues. 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 companies.
| |
| Expenses Fuel and purchased power expenses 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 at Waterford 3.,
| |
| In 1998, fuel and purchased power expenses decreased due to:
| |
| o lowergpsprices; "o a shift-in mix to nuclear fuel; and "o shifting generation requirements in 1997 as a result of the extended refueling outage at Waterford 3.
| |
| Other operation and nmintenance exMenses Other operation and maintenance expenses decreased in 1998 primarily due to:
| |
| "o non-refueling outage related contract work at Waterford 3 during 1997; "o maintenance performed 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.
| |
| -94 -
| |
| | |
| ENTERGY LOUISIANA, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Nuclear refueling outagne exenses 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 rogoulatry mclits In 1999, other regulatory credits increased due to the deferral of Year 2000 costs incurred as required by the LPSC. The deferred costs will be recovered over a five-year period.
| |
| Other In 1999, interest on long-term debt decreased primarily due to the redemption and refinancing of certain long-term debt in 1999.
| |
| The effective income tax rates fBo 1999, 1998, and 1997 were 38.9%, 37.8%, and 41.1%, respectively.
| |
| The effective income tax rate decreased in 1998 primarily due to accelerated tax depreciation deductions, for which deferred taxes have not been normalized, reflecting a shorter tax life on certain assets.
| |
| -95 -
| |
| | |
| ENTERGY LOUISIANA, INC.
| |
| INCOME STATEMENTS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING REVENUES
| |
| $1,806,594 $1,710,908 $1,803,272 Domestic electric
| |
| 'OPERATING EXPENSES Operating and Maintenance:
| |
| FueL fuel-related expenses, and 421,763 383,413 429,823 gas purchased for resale 4*13532' 418,878 372.763 Purchased power 18,634 15,756 21,740 Nuclear refueling outage expenses ..289.3*48. 318,856 289,522 "Otherofýeration and maintenance .8,786 8.786 8,786 Decommissioning 71,558 75.447 70,621 Taxes other than income taxes 163,249 161,754 162,937 Depreciation and amortization 5,505 (5,280) (1,755)
| |
| Other regulatory charges (credits) - net 5,749 Amortization of rate deferrals 1,435,692 1,386,452 1,308,027 TOTAL OPERATINGINCOME. 420J42 402,881 367,580 OTHER INCOME (DEDUCTIONS)
| |
| Allowance for equity funds used during construction 4,925 1,887 1.149 2,340 Gain on sale of assets (517) 2,206 2,644 Miscellaneous - net , -6,871:
| |
| TOTAL- . 632 INTEREST AND OTHER CRARGES
| |
| *103,937 109,463 ."116,715 intee= on lon g-erm debt **.7,010 '!7127 . 5,885 Other interest4: net 6,300 6,300 6,300 Distributions on preferred securities of subsidiary (1,410)
| |
| (4.112) (1,729)
| |
| Allowance for borrowed funds used during construction 127,490 113,135 121,161 TOTAL 288,591 240,722 INCOME BEFORE INCOME TAXES 314,138 98,965 Income taxes 122,368 109,104 141,757 NET INCOME 191.770 179,487 Preferred dividend requirements and other 9,955 13,014 13,355 EARNINGS APPLICABLE TO
| |
| $181,815 $166,473 $128,402 COMMON STOCK See Notes to Financial Statements.
| |
| ENTERGY LOUISIANA, INC.
| |
| .IATEMENTS OF CASH FLOWS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING ACTr IVITIES $141.757
| |
| $191,770 $179,487 Net Income 5,749 Noncash items Included In net Income:
| |
| Amortization of rate deferrals (5,280) (1,754) 5.505 171,723 172,035 Other regulatory charges (credits) - net 170,540 (15,487) 26,910 (15.456)
| |
| Depreciation. amortization, and decommissioning
| |
| *. (1,887) (1,149)
| |
| Deferred income taxes and investment tax credits (4.925)
| |
| Allowance for equity funds used during construction (2,340)
| |
| Gain on sale of assets (41,565) (7.972) (3,385)
| |
| Changes in working capital:
| |
| 95.120 (5.878) (21,926)
| |
| Receivables Accounts payable 7,659 (7,040) 17.853 (33,066) 18.731.. (14.678)
| |
| Taxes accrued 4,530 21.615 Interest accrued (9.959) 56,714 16.983 (2,286)
| |
| Deferred fuel costs Other working capital accounts 5.442 "6.410 3,986 (11,443) 17,932 Provision for estimated losses and reserves 38,577
| |
| .(4.099) (12,130)
| |
| Changes in other regulatory assets (45,146)
| |
| Other 410,394 342,361 315,422 Net cash flow provided by operating activities INVESTING ACTIVITIES (84.767)
| |
| (130,933) (105,306)
| |
| , 1,887 1,149 Construction expenditures 4.925 (38,141) (43.332)
| |
| Allowance for equity funds used during construction (114308) 11,308 : 39.701 43,332 Nuclear fuel purchases Proceeds from sale/leaseback of nuclear fuel Decommissioning trust contributions and realized (13.678) (11,641) (11.191) change in trust assets (139.686) (113,507) (94,809)
| |
| Net cash flow used in Investing activities FINANCING ACTIVITIES Proceeds from Issuance of:
| |
| 298,092 112,556 Long-term debt Retirement of: (386.707) (150.786)
| |
| (34,288)
| |
| (50,000) (7,500)
| |
| Long-term debt Redemption of preferred stock (145,400)
| |
| Dividends paid: (197,000) (138.500)
| |
| (10.389) (13,014) (13,251)
| |
| Common stock Preferred stock (346,004) .(19.744) (200,439)
| |
| Net cash flow used in financing activities 20,174 (75.296) 39,110 Net increase (decrease) In cash and cash equivalents 83,030 43.920 23,746 Cash and cash equivalents at beginning of period
| |
| $7,734 $83,030 $43,920 Cash and cash equivalents at end of period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
| |
| Cash paid during the period for: $98,801 $138,530
| |
| $144,731 $86,830 $68,323 Interest - net of amount capitalized $132,924 Income taxes Noncash investing and financing activities:
| |
| $5,928 $3,432 Change in unrealized appreciation of $4,585 decommissioning trust assets See Notes to Financial Statements.
| |
| ENTERGY LOUISIANA, INC.
| |
| BALANCE SYIEETS :
| |
| ASSETS December 31, 1999 1998 (In Thousands)
| |
| CURRENT ASSETS Cash and cash equivalents:
| |
| Cash $7,734 $10,187 Temporazy cash investments - 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 accounts (1,615) (1,164)
| |
| Associated companies 14,601 33,775 Other 10,762 19,305 Accrued unbilled revenues 106,200 50,540 Total receivables 209,283 167,718 Deferred fuel costs 2.161 Accumulated deferred income taxes 12,520 13,332 Materials and supplies - at average cost 84,027 82,220 Deferred nuclear refueling outage costs 11,336.. 6,498 Prepayments and oitier 6,014 11,565 TOTAL 333,075 364,363 OTHER PROPERTY AND INVESTMENTS Investment in subsidiary companies - at equity 14,230 14,230 Decommissioning 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 5,095,278 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 PLANT . 5,575,115 :5,490,996 Less - accumulated depreciation and amortization 2,294,394 2,158,800 UTILITY PLANT - NET ý i 3,280,721 3,332.1,96 DEFERRED DEBITS'AND OTHERASSETS Regulatory assets:
| |
| SFAS 109 regulatory asset - net 230,899 270,068 Unamortized 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
| |
| $4,084,650 $4,181,041 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 $116,388 $6,772 Accounts payable: 43.051 137,869 Associated companies 90.465 90,768 Other 55.966 61.096 Customer deposits 18.203 25,863 Taxes accrued 53,302 20,236 Interest accrued 7,798 Deferred fuel cost 32,539 28.387 Obligations under capital leases 7.644 59,737 Other 315,740 540,344 TOTAL DEFERRED CREDITS AND OTHER LIABILITIES 840,931 792,290 Accumulated deferred income: taxes 128,689 123,155 Accumulated deferred investment tax credits 23,543 43,275 Obligations under capital leases 10,836 15,421 Other regulatory liabilities 52,645 58,087 Accumulated provisions 39,791 34,564 Other 1,116,167 1,047,060 TOTAL 1,332,315 Long-term debt 1,145,463 35,000 85,000 Preferred stock with sinking fund Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding 70,000 solelyjunior subordinated deferrable debentures 70,000 SHAREHOLDERS' EQUITY 100,500 Preferred stock without sinking fund 100,500 Common stock, no par value, authorized 250,000,000 shares; issued and outstanding 165,173,180 shares in 1999 1,088,900 1,088,900 and 1998 (2.320)
| |
| (2.171)
| |
| Capital stock expense and other 74,739 59,554 Retained earnings 1,261,819 1,246,783 TOTAL Commitments and Contingencies (Notes 2, 9, and 10)
| |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $4,084,650 $4,181,041 See Notes to Financial Statements.
| |
| ENTERGY LOUISIANA, INC.
| |
| STATEMENTS OF RETAINED EARNINGS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| Retained Earnings, January I $74,739 $46,766 $63,764 Add:
| |
| Net income 191,770 179,487 141,757 Deduct:.
| |
| r)ividends 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 Retained Earnings, December 31 (Note 8) $59,554 $74,739. $46,766
| |
| .See Notes to Financial Statements.
| |
| -100-
| |
| | |
| ENTERGY LOUISIANA, INC.
| |
| SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 1996, 1995 (In Thousands)
| |
| $1,674,875
| |
| $1,806,594 $1,710,904 $1,803,272 $1,828,867 Operating revenues $ 179,487. $ 141,757 $ 190,762 $ 201,537 Net income $ 191,770 $4,331,523
| |
| $4,084,650. $4,181,041 $4,175,400 $4,279,278 Total assets $1,530,590 $1,522,043 $1,545,889 $1,52,8,542 L-ong-term obligations (1) $1,274,006 (1) licludes long-term debt (excluding currently maturing debt), preferred stock with sinking fund, preferred securities of subsidiary trust,, and noncurrent capital lease obligations.
| |
| 1999 1998 1997 1996 1995 (Doflars In Thousands)
| |
| Electric Operating Revenues:
| |
| $620,146 $598,573 $606,173 $609,308 $583,373 Residential 379,131 374,515 353,582 386,042 367,151 Commercial 708,356 .727,505. 641,196 646,517 597,536 Industrial 34,171 33,621 31,616 33,738 32,795 Governmental 1,744,949 1,609,767 1,686,443 1,596,055 1,727,831 Total retail Sales for resale: 3,817 27,253 16,002 5,065 1,178 Associated companies 58,685 48,987 53,923 53,538 55,345 Non-associated companies 16,279 20,168 14,943 38,975 45,313 Other $1,828,867 $1,674,875
| |
| $1,806,594 $1,710,908 $1,803,272 Total Billed Electric Energy Sales (GWH): 7,826 8,354 8,477 7,893 7,855 Residential S5,265 4,906 4,846 4,786 5,221 Commercial 16,390 17,647 16,971 15,052 14,781 Industrial 460 457 439 468 481 Governmental 29,582 30,843 30,051 29,095 29,004 Total retail Sales for resale: 44 415 386 104 143 Associated companies 831 855 805 982 1,293 Non-associated companies 31,968 31,388 30,341 30,245 30,491 Total
| |
| - 10.1 -
| |
| | |
| Report of Independent Accountants To the Board of Directors and Shareholders of Entergy Mississippi, Inc.:
| |
| 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 respects, the financial position of Entergy Mississippi, 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 onwthese financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United Statesi which require that we. plant and perforn 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 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.
| |
| PricewaterhouseCoopers LLP New Orleans, Louisiana February 17, 20O0
| |
| -102-
| |
| | |
| ENTERGY .MISSISSIPPI,INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net Income and an increase in other Net income decreased in 1999 primarily due to a decrease in unbilled revenues operation and maintenance expenses. .
| |
| Nqt income -decreased in 1998 pr . due to an increase in oper expenses,.partialy offset by an increase in electric operating revenues.
| |
| Revenues and Sales The changes in electric operating revenues for the twelve months ended December 31,,1999 and. 1998 are as follows:
| |
| Increase/(Decrease) 1999 1998 Description iions)
| |
| (w Base revenues ($9.7) ($10.2)
| |
| (95.9) (2.6)
| |
| Grand Gulf rate rider ::(11.6)
| |
| Fuel cost recovery 4.1 "25.6' 9aes volume/weather Other revenue' (including unbiled) 0.6 (18.3) 5.0 Sales for resale
| |
| ($143.5) $38.9 Total Base revenues 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 financial statements.
| |
| Rate riders them.
| |
| Rate rider revenues have no material effect on net income because specific incurred expenses offset effective In 1999, Grand Gulf rate rider revenue decreased as a result of a new rider which became plan, which was October 1, 1998. This new rider eliminated revenues attributable to, the Grand Gulf phase-in Recovery completed in September 1998. However, this decrease was prally offset by the Grand Gulf Accelerated October 1, 1998. This tariff provides for accelerated recovery of a Tariff (GGART), which also became effective obligation. The GGART is discussed in-more detail in portion of Entergy Mississippi's Grand Gulf purchased power Note 2 to the financial statements.
| |
| - 103 -
| |
| | |
| ENTERGY MISSISSIPPI, INC.
| |
| MANAGkMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Fuel cOSt recovery Fuel cost rcýv 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 recovety revenues decreased due to the 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.
| |
| Sales "olumi/wea In 1999, sales volume increased as a result of sales growth in the residential and commercial sectors, partially offset by unfavorable Weather.
| |
| In 1998, sales volume indreased as a result of significantly warmer weather.
| |
| Other revenue In 1999, other revenue decreased primarily due to a change in tmated unbilled revenues. 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 variatibns in d .iiad Sales for resl .
| |
| In 1999, sales for resale decreased as a result of decreased oil generation due to plant outages at Entergy Mississippi. The decrease is also due to higher sales to associated companies in 1998 as a result of an outage at EntergyAz.kazsa.,
| |
| Expenses Fuel and purchased power expense, In 1999, fuel and purchased power expenses decreased primarily due to:
| |
| o a decqes in total eergy, consumption requirements; and o planned and unplanned plant outages during the.year.
| |
| The 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 market 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.
| |
| - 104 -
| |
| | |
| ENTERgY 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 warmer weather; and "o 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 increased its fixed fuel factor to recover actual fuel expenses more timely.
| |
| Other operation and mi eae In 1999, other operation and maintenance expenses increased primarily due to:
| |
| "o planned and unplanned plant outages in 1999; "o an increase in customer service and reliability improvement spending; "o an increase in employee benefit expense; and
| |
| " an increase in casualty reserves.'.
| |
| Other regulatory credits In 1999, other regulatory credits increased-due to greater under-recovery of Grand Gulf I related costs as a result of the new rider implemented in October 1998.
| |
| In 1998, other regulatory credits decreased primarily due to less under-recoIvely of Grand Gulf related expenses in 1998 as compared to 1997.
| |
| Amortization of rate defierals In 1999, amortization of rate defrals decreased due to the completion of the Grand Gulf 1 rate phase-in plan in September 1998. These phase-ins had no material effect on net income.
| |
| In 1998, amortization of rate d&rrals 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.
| |
| - 105 -
| |
| | |
| ENTERGY MISSISSIPPI,.INC.
| |
| INCOMES'TATEMENTS, For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING REVENUES Domestic electric $832,819 $976,300 $937,395
| |
| 'OPERATING EXPI ENSES
| |
| ýOoeratiag and Maintenance: .
| |
| * Fuel, fuel-related expenses, and gas purchased for resale 185,063 241,415 199,880 Purchased power 332,015 286,769 285,447 Other operation and maintenance 152,817 131,752 129,810 Taxes other than income taxes 44,o03 44,888 43,142 Depreciation and amortization "42,870 45,1133 43,300 Other regulatory credits - net (12,044) (3,186) (20,731)
| |
| Amortization of rate deferrals -104,969 " 11,197 TOTAL 744,734 851,740 800,645 OPERATING INCOME 88,085. ,124,560 136,750 OTHER INCOME (DEDUCTIONS)
| |
| Allowance for equity funds used during construction 1,569 188 543 Gain (loss) on sale of assets 1.025 (2) 6,781 4*,891.I 919 Miscejlaneods- net.
| |
| ",; 8,350 TOTAL §j9_4 1,460 INTEREST AND OTHER CHARGES
| |
| - interest on Icng-t6r'm:debt 35,265 37,756 40,791 Other interest - net 3,574 .3,171.:! . 4,483.
| |
| Allowance for borrowed funds used during construction (1,529) (932) (469)
| |
| TOTAL 37,310 39,995 . 44,805 INCOME BEFORE INCOME TAXES 59,12.5 90,669 93,405 Income taxes 17,537: '28,031 .'. 26,744 NET INCOME . .41,588 . 62,638 66,661
| |
| "".itrcferred dividenid rcquirtments and other 3,17b1 .. 3,370 4;044 EARNINGS APPLICABLE TO COMMON STOCK .$38,218 $59,268 $62,617 See Notes to Financial Statements.
| |
| -106-
| |
| | |
| ENTERGY MISSISSIPPI, INC:.'
| |
| STATEMENTS OF CASH FLOWS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING ACTIVITIES
| |
| $41,588 S62,638 $66,661 Net income Noncash items included in net income:
| |
| 104,969 119,797 Amortization ofrate deferrals (12,044) (3,186) (20.731)
| |
| Other regulatory credits - net Depreciation and amortization 42,870 45,133 43,300 18,066 (12,494) (32,204)
| |
| Deferred incom~e taxes and investment tax credits Allowance for equity funds used during construction (1,569) (188) (543)
| |
| (Gain) loss on sale of assets (1,025) 2 Changes In wdrldng capital:
| |
| 24,208 6,253 2,978 Receivables; (771) -384 3,275 Fael inventory..
| |
| 54,317 (31,967) (12,338)
| |
| Accounts payable 29,955 (26.301) 5,832 Taxes accrued (4,595) 323 (6,600)
| |
| Interest accrued (45,1830) 12,858 .. (10,967)
| |
| Deferred fuel coats 10.072 8,652 (12,245)
| |
| Other working capital accounts 4,173 (6,915) 1,173 Provision for estimated, losses and reserves (30,179) (38,295) (29,699)
| |
| Changes in other regulatory assets 12,152 38,304 other 142,413
| |
| * 115;'041' 155,995 Net cash flow provided by operating activities INVESTING ACT IVITIES Construction expenditures (94,717) * (58,705) (50,334)
| |
| Allowance for equity funds used during construction 1,569 188 543 Net cnash flow used In Investing activities (58,517)
| |
| FINANCING AC`TIVIIES Proceeds from issuance of 153,629 78.703 64,827 Longterm debt Retirement of:.
| |
| (163.278) (80,020) (96.015)
| |
| Long-term debt (14,500)
| |
| Redemption of preferred stock Changes in short-term borrowing, net (6) (13)
| |
| Dividends paid:
| |
| (34,10D) (66,000) (59.200)
| |
| Common stock Preferred stock (3,363) (3,370)
| |
| (47,118) (70,700) (10886 Net cash flow usked In financing activities Net increase (decrease) In cash and cash equivalents 2,147 (4,176) (2,6 82)
| |
| Cash and cash equivalent~s at beginning of period 2,640 6,816 9,498 Cash and cash equivalents at end of period $4,787 $2,640 $6,816 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
| |
| Cash paid (received) during the period for:
| |
| Interest - net of amount capitalized $41,567 $39,291 $50,662
| |
| ($29,850) $64,204 $51,598 Income taxes See Notes to Financial Statements.
| |
| - 107 -
| |
| | |
| ENTERGY MISSISSIPPI, INC.
| |
| BALANCE SHEETS ASSETS December 31, 1999 1998 (In Thousands)
| |
| CURRENT ASSETS Cash and cash equivalents:
| |
| Cash S4,787 $2,Mo.
| |
| Accounts receivable:
| |
| Customer .35,675 39.70L (886) (12.7,)
| |
| Allowance for doubtful accounts 1,370 '.5,703:
| |
| Associated companies 2,391 -*E 1,267'.* . "
| |
| Other Accrued unbilled revenues 28,600 45,904 Total receivables 67,150 91.358 Deferred fuel costs 47,939 2,108 Accumulated deferred income taxes 665ý "!
| |
| Fuel inventory - at average cost 3,774 3,002 Materials and supplies - at average cost 17,068 17,149 .
| |
| Prepayments and other 7,114 12,256 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 accumulated depreciation) 13 TOTAL 12,496 12,600 UTILITY PLANT Electric 1,763,636. 1,718,426 384 1477 Property under capital lease 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 1,121,266 1,069,006 UTILITY PLANT - NET DEFERRED DEBITS AND OTHER ASSETS Regulatory assets:
| |
| SFAS 109 regulatory asset - net 24,051 ,25,5,15*
| |
| 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 TOTAL ASSETS $1,460,017: $1,350,929 See Notes to Financial Statements.
| |
| - 108 -
| |
| | |
| ENTERGY MISSISSIPPI, INC.
| |
| BALANCE SHEETS ''
| |
| LIABILITIES AND SHAREHOLDERS' EQUITY December 31, 1999 1998 (In Thousands)
| |
| "CURRENT LIABILITIES Currently maturing long-term debt $- $20 Accounts payable:
| |
| Associated companies 84.382 44,091 32,470 18,444 Other 23,303 18,265 Customer deposits 35,968 6.013 Taxes accrued 526 Accumulated deferred income taxes 10.038 14.632 Interest accrued 95 92 Obligations under capital leases 2,137 2,319 Other 103,&76 188,919 TOTAL DEFERRED C!REDITS AND OTHER LIABILITIES 298,477 281.017 Accumulated deferred income taxes 20,908 22,408 Accumulated deferred investment tax credits 290 384 Obligations under capital leases 3,200 7.374 Accumulated provisions 3,368 4.331 Other 330,417 311,340 TOTAL 464.466 463,616 Long-term debt SHAREHOLDERS' EQUITY Preferred stock without sinking fund 50,381 50,381 Common stock, no par value, authorized 15.000,000 199,326 199,326 shares; issued and outstanding 8,666,357 shares in 1999 and 1998 (59)
| |
| (59)
| |
| Capital stock expense and other 226,567 222,449 Retained earnings 476.215 472.097 TOTAL Commitments and Contingencies (Notes 2. 8, and 9)
| |
| $1.460.017 S1.350.929 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY See Notes to Financial Statements.
| |
| -109-
| |
| | |
| ENTERGY MISSISSIPPI, INC.
| |
| STATEMENTS OF RETAINED EARNINGS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| Retained Earnings, January 1 $222,449 . $229,181 $225,764 Add:
| |
| Net income 41,588 62,638 66,661 Deduct:
| |
| Dividends declared:
| |
| Preferred stock 3,370 3,370 3,656 Common stock 34,100 -, 66,000 59,200 Preferred stock expenses - - 388 Total 37,470 69,370 63,244 Retained Earnings, December 31 (Note 8) "$226,567 $'S`222,449` $229,181 See Notes to Financial Statements.
| |
| -110-
| |
| | |
| ENTERGY MISSISSIPPI, INC.
| |
| SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1999 1998 1997 1996. 1995 (In Thousands)
| |
| $ 958,430 $ 889,843 Operating revenues $ 832,819 -$ 976,300 $ 937,395
| |
| ,$ 62,638 $ 66,661 $ .79,211 $ 68,667.
| |
| Net Income $ 41,588
| |
| $1,350,929 $1,439,561 $1,521,466 $1,581,983 Total assets $1;460,017
| |
| $ 464,000 $ 464,156 $ 406,054. $ 511,613 Long-term obligations (1) $ 464,756 (1) Includes long-term debt (excluding currently maturing debt) and-noncurrent capital lease obligations.
| |
| 1999 1998 1997 1996 1995 (Dollars In Thousand")
| |
| Electric Operating Revenues:
| |
| $311,003 $367,895 $342,818 $358,264 $336,194 Residential 281,626 262,786 250,929 284,787 274,195 Commercial 185,351 178,466 151,659 170,910 173,152 Industrial 26,882 29,093 27,410 23,528 26,670 Governmental 817,047 854,334 804,856 737,119 850,262 Total retail Sales for resale:
| |
| 63,004 80,357 78,233 58,749 35,928 Associated companies 21,906 31,546 32,442 21,276 22,814 Non-associated companies 22,533 27,153 1,150 13,239 20,839 Other $889,843
| |
| $832,819 $976,300 $937,395 $958,430 Total Billed Electric Energy Sales (GWH):
| |
| 4,753 4,800 4,323 4,355 4,233 Residential 3,673 3,508 3,368 4,156 4,015 Commercial 3,089 3,063 3,044 3,246 3,163 Industrial 333 346 336 363 347 Governmental 11,418 11,272 10,981 12,518 12,325 Total retail Sales for resale:
| |
| 1,774 2,424 1,918 ,1,368 959 Associated companies 521 692 426 484 412 Non-associated companies 13,161 12,632 Total 14,718 15,233 13,748
| |
| - 111 -
| |
| | |
| Report of Indopendent Accountants To the Board of Directors and Shareholders of EntergyNew Orleans, Inc.:
| |
| 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 respects, the finanicial position of Entergy New Orleans, Inc. at December 31, 1999 and 1998, and the results ofits operations and its cash flows for each of the three years in the period ended December 31, 1999 in conformity with accounting principles generally accupted in the United States. These financial statements are the responsibility of the. Company's management; ourresponsibility 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 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 significant estimateA made by management, and evaluating the overall financial statement presentation. We belivq that our audits provide a reasoniable basis for the opinion expressed above.
| |
| PricewaterhouseCoopers LLP" "
| |
| New Orleans, Louisiana February 17, 2000-
| |
| -112-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net Income
| |
| . Netincme increased slightly in 1999 primarily due to an increase in unbiUled revenues and sales volume, partid4y ofset by anincrease in other operation and imainitenance expenses.
| |
| other income and a Net income increased in 1998 primarily due to an increase in operating reveues and.
| |
| decrease in income taxes, partially offset by increased operating expenses.
| |
| Revenues agd Sales
| |
| -,,Electric operating revenues 1999 and 1998 are The changes in electric operating revenues for the twelve months ended December 31, as follows:
| |
| Increasef(Decrease)
| |
| Description 1999 1998 (In Millions)
| |
| Base revenues ($113) .. ($9.8)
| |
| Fuel cost recovery (4.6) 14.5 Sales volume/weather .1.7 13.9 Other revenue (including unbilled) 5.5 1.0 Sales for resale 3j -17 Total . ($5L.0 . $21.3 Base revenues 9 9 and.rate In 1999, base revenues decreased primarily due to base rate mreduchouns effective January 19 refund provisions accrued for potential rate matters.
| |
| rates that went In 1998, base revenues decreased primarily due to reductions in residential and commercial into effect .in August 1997.
| |
| 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.
| |
| from In 1999, fuel cost recovery revenues decreased due to an under-recovery of fuel expenses resulting 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 wanner weather.
| |
| - 113-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| MANAGE MNT"S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Other revenue
| |
| .In 1999, other revenueificreased due to a change in estimated unbilled revenues. The changed estimate more closely aligns the fuel component of unbilled 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 thiough the first quarter of 2000. Comparative'impacts are also affected by seasonal variations in demand.
| |
| Sales for resale In 1999, sales for 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.
| |
| Expenses Fuel and purchased:power expenses In 1998, fuel. and purchased power expenses increased primarily due to:
| |
| "o an increase in purchased power primarily due to increased generation requirements as a result of significantly wanner weather and an increase in the price of purchased power; and "o an over-recovery of gas 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 operation andmaintenance expe.ses 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.
| |
| 'Amortiotizton of rate deferrals In 1999, amortization of rate deferrals decreased due to a scheduled rate change in the amortization of Grand Gulf 1 phase-in expenses.
| |
| Other regulatory credits In 1999, other regulatory credits increased due to a greater under-recovery of Grand Gulf 1 costs in 1999.
| |
| -114-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| ANALYSIS MANAGEMENT'S FINANCIAL DISCUSSION AND RESULTS OF OPERATIONS Other Other income Other income increased in 1999 primarily due to:
| |
| projects in 1999; and "o an increase in AFUDC resulting from increased capital charges on "o increased interest related to the Grand Gulf 1 rate deferral plan.
| |
| New Orleans' portion of System Fuel's Miscellaneous income increased in 1998 primarily due to Entergy related to the Grand Gulf 1 rate deferral plan.
| |
| gain on the sale of oil and gas properties and an increase in interest in Note 2 to the financial statements.
| |
| The Grand Gulf I rate deferral plan is discussed in more detail income taxes.
| |
| 38.4%, and 44.0%, respectively.
| |
| The effective income tax rates for 1999, 1998, and 1997 were 40.7%,
| |
| due to the increase in pre-tax income The increase in the effective income tax rate for 1999 was primarily reducing the impact of permanent differences and flow through items.
| |
| due to a tax benefit recorded in 1998 The decrease in the effective income tax rate for 1998 was primarily related to a depreciation adjustment.
| |
| - 115-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| INCOME STPATEMENTS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING REVENUES Domestic electric $426,431 $431,453 $410,131 Natural gas 81,357 82,297 94,691 TOTAL 507,788 513,750 504,822 OPERATING EXPENSES Operating and Maintenance:,
| |
| Fuel, fuel-related expenses, and gas purchased for resale 135,242 138,142 141,902 Purchased power 166,579 164,435 156,542 Other operation and maintenance 830197 79,023. 72,748 Taxes other than income taxes, . 395621 .2I1,07o 40.417 Depreciation and amortization 21,219 21,878 38,964 Other regulatory credits - net (9,036) (4,540) (6,394)
| |
| Amortization of rate deferrals 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
| |
| * 2,263... "o1(77)
| |
| TOTAL 3,347 1,693 303 INTEREST 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 funds 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 $17,996 $15,172 $14,486 See Notes to Financial Statements.
| |
| -1I16-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| STATEMENTS OF C.ASH FLOWS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING ACTIVITIES S$18ý9.61 $16,137 Net income Noancash items included in net income: 28,430 37,662 Amortization of rate deferrals 35,336 (6,394)
| |
| (9,036) (4,540)
| |
| Other regulatory credits - net 21,219 21,878., 21,107 Depreciation and amortization (3,131) (7,498). (1,957)
| |
| Deferred incom6 taxes and investment tax credits (1,084) (284) (380)
| |
| Allowance fir equity funds used during construction (458)
| |
| Gain on sale of assets Changes in working capital: 3,148 4,257 (7,258)
| |
| Receivables (861) (145) 179 Fuel inventory 23,319 (4,136) 540 Accounts payable .(5,270) 4,065 429 Taxes accrued 37 (130) (276)
| |
| Interest accrued 8,193 (2,094)
| |
| (13,293)
| |
| Deferred fuel cosis 6,607 (5,122) (15,908)
| |
| Other working capital accounts (531) (6,295) (247)
| |
| Provision for estinrat losses and reserves (11,482) (6,964) 7,365 Changes in other regulatory assets 6,796 (2,805) (9,941)
| |
| Other 60,162 40,329 54,105 Net cash flow p by operating activities eeovid INVESTING ACTIVITIES (21,691) (16,137)
| |
| (46,239) 380 Construction expenditures (1084 284 Allowance for 4itj funds used during'construction (21,407) (15,757)
| |
| Net cash flow used in Investing activities
| |
| . " FINANCING ACTIVITIES Proceeds from issuance of:
| |
| Long-term debt 29,438 Retirement of:
| |
| .- (30,000) (12,000)
| |
| Long-term debt Dividends paid:. (26,000)
| |
| (26,500) (9,700)
| |
| Common stock (1,206) (965) (965)
| |
| Preferred stock (27,706) (11,227) (38,965)
| |
| Net cash flow used in financing activities (617)
| |
| (12,699) 7,695 Net increase (decrease) in cash and cash equivalents 17,153 9,458 10,075 (Cash and cash equivalents at beginning of period
| |
| $4,454 $17,153 $9,458 (ash and cash equivalents at end of period SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
| |
| Cash paid durIng ihe peod for:
| |
| $14,281 $14,592 $15,237 Interest - net of amount capitalized $12,476 $26,197 $10,981 Income taxes - net See Notes to Financial Statements.
| |
| - 117-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| BALANCE SHEETS ASSETS December 31, 1999 1998 (In Thousands)
| |
| CURRENT ASSETS Cash and cash equivalents:
| |
| Cash $4,454 $3,769 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 8,845 Rate deferrals 24,788 28,430 Prepayments and other 2,528 ;,686 TOTAL 113,934 112,780 OTHER PROPERTY 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 $485,746 $471,904 See Notes to Financial Statements.
| |
| - 118 -
| |
| | |
| ENTEgGY NEW ORDLEANS, IN(%
| |
| BALANCE SHEETS LIAIIILITiES OL EUITY December 31, 1998 1999 (In Thousands)
| |
| CURRENT LIABILITIES Accounts payable: $18,283
| |
| $24,350 11,008 Associated companies 28,261 Other 17,830 18,03.2 Customer deposits 429 Taxes accrued 10,863 6,284 Accumulated deferred income taxes 4,956 4,919 Interest accrued 5,524 Other 92,213 60,359 TOTAL 57,214 DEFERE"D gREDITS AND OTHER LIABILITIES 43,878 Accumtilated deferred incbme takeis.. 6,378 6,894 Accumulated deferred investment tax credits 942 SFAS. 109 regulatoryliability - net. 1,753 3,146 Other regulatory liabilities 8,836 9,367 Accumulated provisions .7,733.. 8,116 Other 76,106 85.679 TOTAL 169,018 169,083 Long-term debt SHAREHOLDERS' EQUITY 19,780 19,780 Preferred stock without sinking fund Common stock. $4 par value, authorized 10,000,000 sharesm issued and outstanding 8,435,900 shares in 1999 33,744 33,744 and 1998 36,294 36,294 Paid-in capital 58,526 67,030 Retained earnings 148,344 156,848 TOTAL Commitments and Contingencies (Notes 2 and 9)
| |
| $485,746 $471,904 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY See Notes to Financial Statements.
| |
| - 119-
| |
| | |
| EM'ERGY NEW ORUEANS, INC.
| |
| STATEMENTS OF RETAEVO EARNINS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| Retained Earnings, January 1 -67,030 $61,558 $73,072 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 . .... 26,965 Retained Earnings, Decembei 31 (Note 8) $58,526 t67,030 61,558 See Notes to Financial Statements.
| |
| -120-
| |
| | |
| ENTERGY NEW ORLEANS, INC.
| |
| SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1998 1997 1996 1995 1999 (In Thousands)
| |
| "$-507j788 $ 5*3,750:: $ 504,822 $$ 504,277 $$ 470,278 34,386 Operating reVenues .$ 15,451 26,776
| |
| $ý 18,961 $1.:6,137 $ 596,206 Net income -$,498,f50 4$`549,996
| |
| $ 485;746 '$471,904 $155,958 Total assets $ 168,953 $ 168,888
| |
| $ 169,083 r$:f*9,0`8 Long-trm obligatins (1)
| |
| (1) 'Includes long-teqn debt*(excudit cuYently maturing'debt).
| |
| '1999 1998 1997 1996 1995 (Dollars In Thousands)
| |
| Electric Operating Revenues:
| |
| $158,822 $164,765 $145,688 $151,577 $141,353 Residential 14%,49, 144,374 146,328 149,353 143,113 Commercial 24,663 22,842 25,584 26,229 24,616 Industrial 58,561, . 52,880 63,056 62,332 58,746 Governmental 384,450. 361,449 393,790 402,679 372,163 Total retail Sales for resale: 10,451 10,342 3,217 14,207 2,649 9,882 9,864 Associated companies 10,590 8,996 10,545 6,273 15,472 Non-associated companies 7,889 7,733 18,630 Other $403,254 $390,002
| |
| $426,431 $431,453 $410,131 Total Billed Electric Energy Sales (GWH): 1,998 2,049 2,102 2,141 1,971 Residential 2,073 2,079 2,208 2,149 2,072 Commercial 481 537 514 514 484 Industrial 974 983 1,071 1,037 994 Governmental 5,526 5,648 5,895 5,841 5,521 Total retail Sales for resale: 149 441 370 316 66 297 Associated companies 199 160 212 180 6,094 Non-associated companies 6,410 5,997 5,804 6,516 Total
| |
| - 121 -
| |
| | |
| Report pf IndepeudeIt Accountants To the Board of Directors and Shareholder of System Energy: Resources, Inc.:
| |
| 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 respects, the financial position of System Energy* Resources, Inc. at December 31, 1999 and 1998, and the -esults of its, op ra.ons and it. c~sh flows for each of the three years in the period ended Decembmer 31, 1999 4i ponfomnity with. couting priniles generally accepted in the United States.
| |
| These financial- staements are the responsibility of the,Cqmpany's nagement; our responsjbility 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 .ccegtedin. q. UnieStates, wh.'req.uue .th we plan. and perform the audit to obtain reasonable assurance about whether the financial stat ments 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 signjriqnt estimates rma4e by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.
| |
| PricewaterhotiseCbopers LLP New Orleans, Louisiana February 17, 2000
| |
| -122-
| |
| | |
| SYSTEM ENERGY RESOURCES, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Net Income the potential refund of Net income decreased in 1999 due to the additional reserves and interest recorded for System Energy's proposed rate increase, as well as downtime for unplanned outages.
| |
| Net incomeincteased slightly in 1998 primarily due-to an increaseinother income.
| |
| Revenues to Grand Gulf 1.
| |
| Operating revenues recover operating expenses, depreciation, and capital costs attributable equity funds allocable to its net Capital, costs are computed by. allowing .a return. on. System Energy's common cost for its debt.
| |
| investment in Grand Gulf I and adding to such amount System Energy's effective interest Gulf Accelerated
| |
| . Operating revenues increased in 1999 primarily due to the implementation of the.Grand This increase in revenues is -offset by Recovery Tariff (GGART) at Entergy Arkansas and Entergy Mississippi. and allow Entergy Arkansas related regulatory charges and does not affect net income. The tariff was designed to obligation in purchased power Entergy Mississippi to accelerate the payment of a portion of their Grand Gulf 1998 for 1, 1999 and October 1, advance of the implementation of retail access. It became effective on January Entergy Arkansas and Entergy Mississippi, -respectivdly. .The GGART and System Energy's proposed rate increase, which is subject to refund, are discussed in Note 2 to the financial statements.
| |
| Fuel Wpenses outage at Grand Gulf 1 in In 1999, fuel expenses decreased primarily due to an extended nuclear refueling compared to 1998.
| |
| addition to unplanned outages. Grand Gulf 1 was on-line for 17 fewer days in 1999 refueling outage in In 1998, fuel expenses decreased because of lower generation due to a scheduled nuclear to 1997.
| |
| April and May. Grand Gulf 1 was on-line for 47 fewer days in 1998 compared Depreciation and amortization in principal payment In 1999, depreciation and amortization expenses decreased as a result of the reduction Gulf 1. The depreciation schedule matches the associated with the sale and leaseback of a portion of Grand collection of lease principal and revenues with the depreciation of the asset.
| |
| Other regulatory charges of the GGART at In both 1999 and 1998, other regulatory charges increased due to the implementation Entergy Arkansas and Entergy Mississippi, as discussed above.
| |
| - 123 -
| |
| | |
| . SYSTErMENERGY RESOURCES, INC.
| |
| MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS RESULTS OF OPERATIONS Other Other income:
| |
| 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 fimding arrangemen. The monoe pool is, discussed in Note 4 to the financial statements.
| |
| Interest charges Othert interest.increased in 1999 dueltointerest oh the:potential refuid of.System Energy's proposed rate increase. .K.
| |
| ....-Interest onlong-term debt.decreased-in 1999 and 1998 as a result of the retirement andrefinancing ofhigher cost long-term debt. " o4:..."-
| |
| income taxes..
| |
| The'effective income tax rates itL 1999, 4998,.and 1997 were 39.5%0/,42.r%, 4nd 42.2%, respetvely-.:,
| |
| The effective income tax rate for 1999 decreased due to decreased pre-tax income partially offset by the amortization of investment tax credits related to Grand Gulf 2.
| |
| t& w
| |
| -124-
| |
| | |
| SYSTEM ENERGY RESOURCES, INC.
| |
| INCOME STATEMENTS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING REVENUES Domestic electric $620,032 $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 - not 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 109,735 Interest on long-term debt 102,764 121.633
| |
| -"5,218 6.325 7,020 Other interest - net Allowance for borrowed funds used during construction (1,920) (1,805) (1,683) 146,062 114,255 126,970 TOTAL INCOME BEFORE INCOME TAXES 136,223 183,739 176,949 Income taxes 53,851 77,263 74,654 NET INCOME $82,372 $106,476 $102,295 See Notes to Financial Statements.
| |
| - 125 -
| |
| | |
| (Page left blank intentionally)
| |
| -126-
| |
| | |
| SYSTEM ENERGY RESOURCES; INC.
| |
| STATEMENT.4 OF CASH FLOWS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| OPERATING ACHVITS ILS Net income $82,372 $106,476 $102,295 Noncash items included in net income:
| |
| Reserve for regulatory adjustments 108,484 68,236 43,123 Other regulatory charges - net 57,656 4,443 Depreciation, amortization, and decommissioning 132,806 144,275 147,859 Deferred income taxes and investment tax credits (86,860) .(28,222) (39,370)
| |
| (2.540) (2,042) (2.209)
| |
| Allowance for eq'uity funds used durig bonstruction Changes in worldng capital:
| |
| Receivables (172,354) 9,690 (23,833)
| |
| (11,688) (2,859) 11.172 Accounts payable (21,424) 1,131 7,852 Taxesaccrued Interest accrued (2,022) (300) 8,127 Other working capital accounts (4,425) (2,228)' 19,054 Provision for estimated losses and reseiives 45 (1,704) (1,025)
| |
| Changes in other irejlatory assets (18,492) 25.066 36,654 Other 41,250 (23,159) (23,392) 102,808 2?8,803 286,307 Net cash flow provided by operating activities INVESTING ACTIVITIES Construction expenditures (28,848) (30,692) (35,141)
| |
| Allowance for equity funds used during construction 2;540 2.042 2,209 Nuclear fuel purchases (39,975) .(30,523) (16,524)
| |
| Proceeds from sale/leaseback of nuclear fuel 39.975 "30,523 16,524 Decommissioning trust contributions and realized change in trust assets. (22.139) (24,166) (22,452)
| |
| Net cash flow used In investing activities (48,447) (52,816) (55,384)
| |
| FIN4ANCING ACIJ. ES Proceeds from issuance of:
| |
| Long-term debt 101,835 212,976 Retirement of:
| |
| (282,885).. (300,341) . (17,319)
| |
| Long-term debt Dividends paid:
| |
| Common stock (75,000) (72.300) (113,800)
| |
| Net cash flow used in financing activities (256,050) (159,665) (131,119)
| |
| Net increase (decrease) in cash and cash equivalents (201,689) 86,322 99,804 C'ash and cash equivalents at beginning of period 236,841 150,519 50,715 Cash and cash equivalents at end of period $35,152 $236;841 $150,519 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
| |
| Cash paid during the period for:
| |
| Interest - net ofamount capitalized $102,867 $107,923 $112,387
| |
| $154,336 $104,987 $105,621 Income taxes Noncash investing and financing activities:
| |
| Change in unrealized appreciation (depreciation) of decommissioning trust assets ($37) $3,205 $1,237 See Notes to Financial Statements.
| |
| - 127 -
| |
| | |
| SYSTEM. ENERGY RESOURCES, INC.
| |
| BALACE SHEETS..,
| |
| ASSETS December 31, 1999 1998 (In Thousands)
| |
| CURRENT ASSETS Cash and cash equivalents:
| |
| Cash $136 $120 Temporarycash investments - at cost, which approimates market 35j,61 236,721 Total cash and cash equivalents 35,152, 236,41, Accounts receivable:
| |
| Associated companies 301,287 125,171 Other 670 4,431 Total receivables 301,957 129,602 Materials and supplies - at average cost 61,264 62,203 Deferred nuclear refueling outage costs 18,665 12.853 Prepayments and other 2,25-1 Z.592 TOTAL 419,289 444,091 OTHERFPROPERTY AND INVESTMENTS Decommissioning trust funds 135,384 113,282 UTILITY PLANT Electric 3,060,324 3.030.636 Property under capital lease 434,993 41,098 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 Lems - accumulated depreciation and amortization 1,312,559 1,198,266 UTILITY PLANT - NET 2,395.165 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets:
| |
| SFAS 109 regulatory asset - net' 242,834 221,996 Unamortized loss on reacquired debt 56,474 57,150 Other regulatory assets 185.910 188,256 Other 9,869 11,265 TOTAL 495,087 478,667 TOTAL ASSETS ; S3,369.048 ;. $3,431,205 _
| |
| See Notes to Financial Statements.
| |
| - 128 -
| |
| | |
| "%Y*-.M ENERGY RESOqlRCES, INC.
| |
| BALANCE~ SHREETS LIABIl'tIES AND) SiHAREi1OLDiR'S EQUITY December 31, 1999 1998 (In Thousands)
| |
| ![RRENT LIABILITIES CU...
| |
| Currently maturing long-term debt' $77,947 $175,820 Accounts payable:
| |
| Associated companies 15,237 25,975ýý 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 capital leases 38,421 41,835 Other 1,651 1.543 TOTAL 254.271 388,443 DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes 481.94M 506.727 Accumulated deferred investment tax credits 93.209 96,695 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' EQUITY $3.369,048 $3,431,205 See Notes to Financial Statements.
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| - .129 -
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| | |
| SYSTEM ENERGY RESOUIUCE9, INC.
| |
| STATEMENT$ 16 RETAINED EARý!NS For the Years Ended December 31, 1999 1998 1997 (In Thousands)
| |
| Retained Earnings, January 1, S54,7594- -60;583 $72,088 Add:
| |
| 82,372 106,476 102,295 Net income Deduct:
| |
| Dividends declared 75,000 72,300 _113,.800
| |
| $102,131 $94,759 $60,583 Retained Earnings, December 31 (Note 8)
| |
| See N&t6s to Financial Statements. , .
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| - 130 -
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| | |
| SYSTEM ENERGY RESOURCES, INC.
| |
| SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 1998 ý 1997 1996 1995 (Dollars In Thousands)
| |
| $ 605,639 Operating revenues $ 620,032 $ 602,373 $ 633,698 $ 623,620
| |
| $S 106,476 S 102,295 $ 98,668 $ 93,039 Net income $ 82,372
| |
| $3,431,205 $3,432,031 $3,461,293 $3,431,012 Total assets $3.,369,048
| |
| $1,182,616 $1,364,161 $1,474,427 $1,264,024 Long-term obligations (1) $1,122,178 7,212 7,567 8,259 9,735 8,302 Electric energy sales (GWH)
| |
| (1) Includes long-term debt (excluding current maturities) and noncurrent capital lease obligations.
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| - 131 -
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| | |
| ENTERGY CORPO6RATION AND S-bSIDIARIES NOTESTO NANCIAL STATEMENTS NOTE 1.
| |
| | |
| ==SUMMARY==
| |
| OF SIGNIFICANT ACCOUNTING POLICIES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Missis~ippi, Entergy New Orleans, and System Energy)
| |
| The accompanying consolidated financial statements include ihe accounts of Entergy Corporation ind its direct and indirect subsidiaries, includinig the domestic utility companies and System Energy, whose separate financial statements are included in this dbraument. The .financial 'tatements presented herein result .from these companies having registered securities with the SEC.
| |
| As required by generally accepted accounting principles, all significant intercompany transactions have been elunminated in the consolidated financial statements. The domestic utility companies and System Energy maintain accounts in accoimcc with FERC ai4dother'itgulatory guidelines. Certain previously reported amounts have been reclassified to conform to current classifications, with no effect on net income or shareholders' equity.
| |
| Entergy Corporation sold 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 Financial Statements 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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| -132-
| |
| | |
| utility Plant Utility plant is stated at original cost. The original cost of utility plant retired or removed, plus the applicable reImoval costs, less salvage, is charged to accitriuated depreciation. Maintenance, repairs, and minor replacement costs are charged to operain expenses. Substanitially all of the utility plant is subject to hiens from mortgage bon~d indentures.
| |
| Utility plant includes the portion s of Grand Gulf I and Waterford 3 that have been sold and leased back. For financial reporting purposes, these sale and leaseiback arrangenmets are reflected as financing transactions.
| |
| Net..utilrity plant by company and finctioibal category, as of December 31,1999, is shown below (in millions):
| |
| Egntergy Igutergy Entergy Entergy Entergy. System, Etry:Arkansas Gulf-States Louisiana Mississippi New Orleans Energy Production Nuclear S 6,766 S 913 S 1,853 $ 1,832' S - S - S 2,157 Other 1,396 338 585 201 199 15 Transmission 1,5977 455 495 311 300 27. 9 Distribution 3,225 964 889 742 463 167?7 Other 567 99 152 118 92 .. 17 16 Plant accuisition. adjustment Entergy Gulf States 407 ---
| |
| Other 86 - 20 - -66 Construction work in progress 1,501 267 145 108 67 30* 59 Nuclear fuel 374 95 71 52 -- 78 (lease d and owned)
| |
| Accumulated provision for decommissioning (1) (418) (271) -(64) (83) --
| |
| Utility plant -net S 1,50 S 2,860 S 4,146 $ 3,281 $ 1,121 S 322 1$ 2,319 (1) The deconimisgic~niig.liabilities related to Grand Gulf 1,Pilgrim, and the 30% of River Bend previously owned by Cajun are recorded in the applicable Balance Sheets in-De~ffred Credits and Other Liabilities wDecommnissioning-."
| |
| 'Depreciation is comhputed on the zstraight-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' ýEntergy Entdrgy, Entergy System Entergy Gulf Stts
| |
| -Arkansas Louisiana MISitiggig New Orlen Enerf 1999 2.9% 3.2% 2.4% 2.9% 2.4% 3.0% 3.3%
| |
| 1998 3.0% 3.3% 2.6% 3.%2.5% 3.1%* 3.3%
| |
| 1997 3.2% 3.1% 2.8% 3.0% 2.5% 3.1% -3.4%.
| |
| AFUDC represents the approximate net composite interest cost of borrowed funds and alteasonable return on the equity flmnds used for construction. Although AFUDC increases both utility plant and earnings, it is realized in cash through depreciation provisions included in rates.
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| - 133 -
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| Jointly-Owned Generatin! Stations Certain Entergy subsidiaries jointIl.owii eectric generating facilities with third parties. The investments and expenses associated with these generating statios *arerecorded by the Entergy subsidiaries to the extent of their respective undivided ownership interests. As of December 31, 1999, the subsidiaries' investment and accumulated depreciation in each of these generating stations were as follows:
| |
| Total Megawatt Accumulated Generating Stations Fue&Tvue Capability Ownership Investment Deprecation (In Millions)
| |
| Entergy Arkansas.
| |
| Unit I. . Coat. 836 31.50% $ 118 $ 55 Indelndence A Common Facilities Coal 15.75% " 30 13 White Bluff Units I and 2 Coal 1,659. 57.00% 404 205 Entergy Gulf States 403 199 Roy S. Nelson Unit 6 Coal 550 70.00%
| |
| Big Cajun 2 Unit 3 Coal 540 42.00% 227 106 Entergy Mississippi Independence Units I and 2 Coal 1,678 25.00% 227 95 System Energy Grand Gulf Unit 1 Nuclear 1,200 90.001/6(l) 3,483 1,313 Entergy Power Independence Unit 2 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 return. Income taxes are allocated tQ)he 1subsidiaries in proportion to their contribution to 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 temporary., differences between th. book and tax basis of assets and liabilities, and for certain credits available for carryforward.
| |
| .,Deferred tax asets are rediwed by a valuation allowange when, in the opinion of management, it is more likely than not that some.portion of thedeferred 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 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.
| |
| -134-
| |
| | |
| Cash and Cash Eauivalents Entergy considers all unrestricted highly liquid debt instruments purchased with an original maturity of three mths or less to be cash equivalents.
| |
| Investments 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 result, Entergy has recorded on the consolidated balance sheet $136 million of additional value in its decommissioning trust.. funds.. Tis, increase represents the amount by which the fair value of the secpities held in such firds exceeds, the~amounts deposited plus the earnings on the deposits.. In accordance with the.. regulatory treatment for decomnussioning trust funds,- the domestic utility companies and System Energy have recorded an offsetting amount in unaz gains on, invegment securities as a regulatory liability in other deferred credits.
| |
| Decommissioning trust funds for Pilgrim do not receive regulatory trpatment.Aceprdingly, unrealized gains recorded on the assets in Pilgris. trust funds are recognized as a separate cmpo .ofshare*Iders',quity
| |
| -nt because these assets are classified as available for sale. ,
| |
| Foreign Currency Translation All assets and liabilities of Entergy's foreign subsidiaries are translated into U.S. 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 separote po . 1hareholders equity.
| |
| Current exchange rates are used for U.S. dollar disclosures of future obligations denioriated id foreign currencies.
| |
| Earnings Per Share The average number of common shares outstanding for the presentati onf.ddutq4 earnings per share were greater by approximately 199,00 '0shar in 1999, 176,OQO shares in 1998, a 140,000 shares in 1997, .than the number of such lshares for the preserflation of basic. earnings per share due tojEntergy's stock option and 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 Shares of common stock at various prices wqe outstanding at the end of i!999, 1998, and 1997, respectively, but were not included in the computation of diluted earnings per share because the exercise prices were greater than the average marlj4 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 regulationpursuant 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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| - 135 -
| |
| | |
| 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*financial statements. In general, SFAS 101brI res.that the enterprise report the discontinuation 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.
| |
| EITF 974: "DeregWationw .bf the Pricing of Electricity: .Issues Related to the -Application of FASB
| |
| -Statements No. 71 andiOl Seieb&that SFAS 71 should bediscontinued "t a date no later than when the:effects of a transition to competition planwfor'all or a portion of the entity subject to- such plan are reasonably determinable.
| |
| Additionally, ETF. 97-4 promuigtes that regulatory,assets to be recovered through cash flows derived firom another p6tion of-the entity that continues to. apply SFAS 71 should not be written'off, rather, they should'be considered regulatory assets ofthe segment that will continue to apply SFAS 71.
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| As described in '"MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS -VSIGNIFICANT FACTORS AND KNOWN TRENDS," management believes thit definitive outcomes have not yet been determined regarding transition to competition in any of Entergy's jurisdictions. Therefore, the regulated 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 Arkansas. and Texas regulators, and the enacted laws do not provide sufficient detail to reasonably determine the impact on Entergy Arkansas' arid Enter&Gulf States' regulaWt& operatio.-s.
| |
| Transition to Comieti"A iLabilikies In 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 established :to ntiga*e potential stranded costs. These mechanisms include the transition cost account at Entergy Arkansas, which is discussed further in Note 2 to the fhiaiciai1 Agements. Also included is a' provision in the Texas transition legislation that allows depreciation on twission "d distribiitibn assets to be directed toward generation assets. The liabilities recorded as a rediit of these mechanisms are classified as '*ansitioi to competiton" deferred credits.
| |
| Domestic Onerating Company Deregdated Ogerations Entergy Gulf Stateb doesnobt a~pply regulatory accounting principles to its wholesale jurisdiction, steam department, Louisiana rdtaii deregulated portion of River Bend, and the 30% interest in River Bend firmerly owned by Cajun. The Louisiana retail deregulated portion of River Bend is operated under a deregulated asset 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 sell, 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 sharfing such incremental revenue above 4,6-cents per KWH between ratepayers and shareholders.
| |
| -136-
| |
| | |
| . 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 "Total6per!ating expense 162,058 177,076 126,338 Income tax expense 628 1,154. 9,416 Net income from deregulated utility operations $ 3,823 $ 73 $ 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.
| |
| Impairmet of 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 recoverability is based on themnet cash flows expected to 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 remanaing life of the assets.
| |
| * Assets -regulated under traditional cost-of-service ratemaking, and thereby subject to SFAS 71 accounting, are generally not subject to impairment~because this form of regulation astures 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. Those .assets include Entergy Arkansas' 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 discontinuation of SFAS 71 regulatory accounting principles would require that Entergy 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 ga&ýand 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 "purposesthat are sold'or terminated are deferred and amortized over the remaining life of the debt instrument being hedged: by the interest rate swap. If t-ie 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
| |
| - 137-
| |
| | |
| 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 2001. 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 exposureldraft 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 thetime it was first incurred, which is initial contamination of a nuclear. plant. 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 is probable that the difference will ultimately be recoverable from or refundable to customers. In that case, a regulatory asset or liability would be recorded, .Decommissioning 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 wouldnmitigate any impact on net income.
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| NOTE 2. RATE AND REGULATORY MATTERS, Electric Industry Restructuring Arkansas (Entergy Corporation and Entergy Arkansas)
| |
| In April 1999, the Arkansas 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, 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 finctions; o require operation of transmission facilities by an organization independent from the generation, distribution, and retail operations; o provide for the determination 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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| -138-
| |
| | |
| o f!reeze residential and small business customer rates for three years by utilities that will recover stranded costs.
| |
| Etergy Arkansas filed sepairate generation, transmission, distribution, and customer service rates with the APSC ineeb&" 199.' The rates were based on the cost-of-service st tha formed the basis of the rates included in tthl 1997 ,setnent *genent. Hearings on the rate filig are scduled for Se r 2000. If approved, these rates will become effective July'l1,2001'. "Entergy Arkansas als? filedntcewt the APSC in December 1999 of its intent to recover stranded costs. The APSC ad vanous participants in the industry, including Entergy Arkansas, are currently in the process of implementing the legislation through various rulemaking and other proceedings.
| |
| Texas
| |
| :(Entei 'C4or oration and-Entr Guf States) :..
| |
| 99 4 t~s1gi~aur InJue eacedaaw prvdn o optton in te elecri6 iWtlift-industry
| |
| *rough retail open access. The law prowýids for retail open a by most electritiltis, mclau 8if g Entergy States, on Yonuary' , 2002. ith 'retail open.apcess, Mmenaia6n and iinew retail provider operation will be co ettive businesses, but trannssionhd disbitdi&n opeationswill continue robe r ated. The new retail providerflctn bei pnaypito wt csomr for most seprvices beyond initiation of elscricservice andres of s ce following an e. The provisions ofth new.law o require a rate freeze through January 1, 2002 with frozen rates beyond that for residential and small commercial customers of incumbent utilities; require utilities to separate (unbundle) their generation, transmWspion and Olistribut'on, and retail electric provider functions. Entergy Gulf States filed its pln i Jamiary 2000 with the PUCT to separate its funictions.. The plan included separate transmission and distribution companes;
| |
| .. oreqiie prin eaon a n 4 iia ry manner ofdtransrission and distribution facilities by an fie*M. JPi -i/dejme..eitf the' gen and retail operations ,by &Y time compeion
| |
| 'eratign . s "o lo r recovery of straný"ed'costs incuriedin purchasing power and providing elect generation
| |
| 'service if e costs are appro:Ve by the PUCT; o allow securitization of regulatory assets and stranded costs; o prod for the deter tinaation measures for generation market.power; pnd o require utilities to lile separated data and proposed transmission, distribution, and copetition tariffs by April 1, 2000.
| |
| The market power measures include a. limit on the ownership, of generation assets bya power generation company withbia specled region. The implications of this limnit are uncertai .forIEnitergy .Guf States and the Entergy system. However, it is possible that Entergy Gulf States could be required to divest so'ne of its generation assets if Entergy Gulf States is found to have generation market power. The legislation also requires afected utilities to sell at auction, at least 60 days before January 1, 2002, entitlements to at least 15% of their insitlled generation capacity in Texas. The obligation to auction capacity entitlements. continues for up to 60 months after January 1, 2002 or until 1 0*/ of customers i thq jurisdiction-have.ch o *en an teative supplier, Whiiever comes fij:
| |
| The PUCT and various paArcipants 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:
| |
| 0 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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| -139-
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| | |
| Rules governing the separated costs filing have been issued. Included is a provision establishing, as an alternative to a market-based returti on equity, a presumptively 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 return should be higher. The rules also provide that the utility may propose a performance-based euiliancem.nt to the authorized rate of return, based on distribution and tiranmission "companyindependece Management d not g with t arbitriry level set in therul. and w seek a'higher return in its separat costs, filing. A workshop has been held by the PUCT to discuss opportunities to seekape ~orse4 return.
| |
| Louisiana (Entergy Corporation, Entergy Gulf States, and Entergy Louisiana) in September 1996, Entergy Gulf States and Entergy Louisiana filed prqposals with the LPSC designed. to achieve an orderly transition to retail electric competition in Louisiana, while pr t ceiain class-"of rat'iyets firm bearing the burden of cost shifing. In 1997 and 1998, the LPSC identified areas and *sucs for consideration in the'geeic rulgeia dioc' o n cý tz'tion in. te electiu.tlity industry...*iMarch 1999, 'the LPSC deferred niainga. decision onWhhi ecicrsu rgin Louisiana is in tbo public interest, but approveW ie developi.*n of a usin p plnf o*spible, fture.p on. Th LP9C sta outside consultants, and counsel were dc to work together.o analy;e pnd'esv o .utstýnd issues and rdcomin a npl fbirthe implementation ofretail cmein for cnsideratonby the LPSCiby January 1,2001. T LPSC 'outside consultants, counsel, and industry members are working "6iher to devetop a plin to be submitted to the LPSC.
| |
| Mississippi ntergy Corporation and Entergy ssissippi Since 1996, Entery Mi.ssissippi and the SC have been addiessg ssus regading an orderly transition S
| |
| to a more competitive ..a iket f6r electricity. Asl a result tle .MPlC issued, for inforrional pu and to spur'd scussion, a proposedt ition plan inJune 1998. The planp)rovided forl compeitin inMississippi to begin January 1, 2001 and for recovery of allowable stranded costs, through a non-bypassable k.rarge during a transition period between January 2001 and tie end of'2004. n Prea for competition, t M lC has conducted hearings on:
| |
| "o mirket pouver'and reliability studies Aled by the two investor-owned utilities in Missig'sippi; "0octtification requiremnents and load dispatch and control rules; "o cost of service issues; "o holding company issues; 6 rules and regulati6ns that possibly could be promulgated, after appropriate s l.gislan, gte to implem1nt rti. electric competition; o stra edcosts-and 6 rate caps and perormance-based rates.
| |
| In February 2000, legislation was introduced in Mississippi to establish a study committee to consider retail competition and providea report to the legislature y December 1, 2000. Ifthis legislation passes, the transition plan discussed above would be put on hold until this report has been reviewed. Management does not expect deregulation in Mississippi to occur prior to 2003.
| |
| -140-
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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
| |
| ::-of that1plan-by the Council.
| |
| S......... In October 1998, the Council established a procedural schedule to determine if natural gas retail competition is in the public interest, In April 1999, Entergy New Orleans 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 1999: No further action has been taken by the Council.
| |
| Retail Rate Proceedinas Filings with the APSC (Entergy Corporation and.Entergy Arkansas)
| |
| Entergy Arkansas is operating. under the terms of a, settlement agreement approved by the APSC in December 1997 that provides for the following:
| |
| 01:, accelerated paymentvofEntergy Arkansas' Grand Gulf purchased power obligation in an amount totaling
| |
| $165.3 million over the period from January 1999 to June 2004; o collecting earnings in excess of an;11l% return on equity in a transition cost account to offset stranded costs when retail access is implemented;
| |
| : o. axate,freeze untilatleast July 1, 2001; and o rate decreases totaling $200 million overthe two-year period 1998-1999. The net.income effect from the rate reductions was approximately $22 million.
| |
| During 1999, Entergy Arkansas' operating expenses reflected reserves of $15.4 million ($9.5.million net of taxes) to recordithe. 1999.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.
| |
| 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 increase was warranted to offset an under-recovery of the energy costs for 1998. The increased energy cost rate is effective April,1999 through March 2000.
| |
| Filings with the PUCT and Texas Cities Rate Pro i (Entgy-Corporation and Entergy Gulf States)
| |
| In June 1999, the PUCT approved the settlement agreement that Entergy Gulf States entered into in February 1999. The 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 cost recovery proceeding discussed below. The Office of Public Utility Counsel, an intervenor in the proceeding, has appealed certain aspects of this settlement to Travis County District Court Entergy Gulf States cannot predict the impact ofthe appeal.
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| - 141 -
| |
| | |
| The settlement agreement provides for the following:
| |
| 0 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 on rehearing in October 1998;,
| |
| o a methodology for semi-annual revisions of the fixed fuel factor based on the market price of natural gas; o a base rate freeze through June 1, 2000. The Texas restructuring law extends the base rate freeze through December 2001; o amortization: of the remaining River:Bend accounting order deferals as of January 1, 1999, over three years.on aw straight-line basis, and the accounting order deferrals will not be recognized in any subsequent base rate case or stranded cost calculation; o- the,.dismissal 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 ofthe settlement agreement, in June 1999, Entergy Gulf States:
| |
| o 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 million reserve recorded in 1998 for the amortization of River Bend accounting order deferrals to reflect the thee-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.
| |
| In June 1999, the PUCT instituted a proceeding to consider the final adjustment of the rate refundss:ordered as a result'of 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 a reduction in operating revenues.
| |
| SInSeptember 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 accoint 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. Entergy 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 of River. Bend Costs' (Entergy 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 142 -
| |
| | |
| $115 million,: 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 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 of these costs will be included in rate base. However, no assurance can be given that additional reserves or write-offs will not be required in the future.
| |
| PUCT FuelCost Review (Entergy Corporation and Entergy Gulf States)
| |
| In September 1998, Entergy Gulf States filed 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 surcharge that would result. in recovery of $112.1 million .ofunder-recovered fuel costs, inclusive of interest, over a 24-month period. These increases were implemented in the first billing 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 cannot predict the outcome of this .appeal.
| |
| Based. on the settlement agreement discussed above, Entergy Gulf States adopted. a methodology,.for calculating its fixed fuel factor based on the market price of natural gas. -This calculation and any, necessary adjustments began semi-annually as of March 1, 1999 and are scheduled to continue until December 2001 ,. 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 factor reduction was approved by the PUCT'in FebrUaryy1999. The calculation for the factor to be implemented September ,1,.999showed, and the PUCT approved on an interim basis, an increase in the fuel factor.
| |
| The amounts collected under Entergy Gulf 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 States-reached a,unanimous settlement with: all parties to the proceeding.
| |
| Entergy Gulf States is reconciling approximately $731 million (after excluding approximately $14 million,.reated 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 betrecovered 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 throughAugust 31, 2000.*
| |
| In September 1999, Entergy Gulf States filed an application with the PUCT requesting an interim fuel
| |
| ..surcharge to collect under-recovered fuel and purchased power expenses incurred from March 1999 through July 1999. In December 1999,1the PUCT 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.
| |
| Filings with the LPSC Annual Earnings Reviews (Entergy Corporation and Entergy Gulf States)
| |
| In May 1995, 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, the LPSC ordered a $33.3 million annual base rate -reduction and a $9.6 million refund. 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
| |
| - 143 -
| |
| | |
| insofar as it requires the $13.4 million reduction, which Entergy Gulf-States implemented in November -1996. In addition, pursuant to an October 1996 settlement with the LPSC, Entergy Gulf States will be allowed to. recover
| |
| $8.1 million annually related to certain gas transportation and storage facilities costs. This amount will be applied as an -offset to any refunds required. In April 1999, a Louisiana Supreme Court decision reduced the refund 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 reductioný in June 1996. In September 1998, the LPSC issued an order in the third required post-Merger earnings analysis that required a refund of $44.8 million 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.
| |
| In May 1998, Entergy Gulf States filed its fifth 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 fourthquarter, 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 were.held in December 1999.
| |
| In May 1999, Entergy Gulf States filed its sixth required post-Merger earningslanalysis with the LPSC.
| |
| Hearings 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 management'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 millibn net of taxes), including interest,: are reflected, in operating revenues in 1999.
| |
| Proceedings on issues in the second, third, fourth, fifth, and sixth post-Merger earnings analyses will continue.
| |
| LPSCFuel CoslRevieW (-0Entergy.Corporation and Entergy Gulf States)
| |
| In September 1996, the LPSC completed the second phase of its. review of Entergy Gulf States' fuel costs, which coveted the period October 1991 through December 1994. In October 1996, the LPSC ordered a
| |
| $34.2 million refund. The refund includes a disallowance of $14.3 million of capital costs (including intdrest) related to certain gas transportation and storage facilities, which were recovered through the fuel clause, and which have been refundedpursuant to an: October 1996 settlement with theiLPSC. 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'sOctober 1996 order. In accordance with this decision,. Entergy Gulf States refunded $26.2 million, including interest in August 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. This 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 refund, although the resulting amounts were not quantified. Entergy Louisiana has appealed this order and obtained a preliminary injunction pending a final decision on appeal.
| |
| -144-
| |
| | |
| In September 1998, Entergy Louisiana made its third annual performance-based formula rate plan filig w4ith 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 Luisiana submitted its, fourth annual performancebased 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 reduction of $15.0 million was implemented effective August 1i,-1999. Entergy Louisiana's filing will be subject to further review by the LPSC, which may esult in an additional change- in rates. Entergy Louisiana has provided reserves for the potential of further rate.reductions. Hearings arewscheduled with the LPSC in May 2000.
| |
| Fuel Adjustment Clause Litigation (Entergy Corporation and Entergy Louisiana)
| |
| In May 1998, a group of ratepayers filed a complaint against Entergy Corporation, Entergy Power, and Entergy Louisiana in state court in Orleans Parish purportedly on behalf of all Enter Louisiana ratepayers. The plaintis seek treble- damagw. for alleged,injuries arising.from the defendants' alleged yiolations 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 impxudently ,purchased high-cost. electricity., . afil iom mits, and imprudently purchased high-cost gas. Plaintiffs allege that these practices violated Louisiana's antitrust laws. In addition, plaintiffs seek towrecover interest and attorney. fees; Exceptions have been filed by Entergy, asserting that this dispute should be litigated before the LPSC and FERC:: At the appropriate time, if necessary, Entergy will raise its defenses
| |
| -tothe antittust claims. At present theesuit instatecourt is stayedby stipulation fthe.parties.
| |
| :Plaintiffsalso filed ti&s complaint with theLPSC to initiate a riew by the LPSC of Entergy Louisiana's Smonthly fuel adjustment chargoefilings andlto force restitution to ratepayers of all-costs that the plaintiffs allegewere improperly included in.those fuel adjustment filings. Marathon Oil Company. and Louisiana Energy Users Group
| |
| .have alsob intervened in. thea LPSC proceeding.. Discovery at the LPSC has been conducted and is wqected to continue. Direct testimony was filed with the LPSC by plaintiffs and the intervenors in July,4999. In theirtestimony for th.lperiod 1989 through 1998,:,plaintiffs.,purport to quantify many of their claims in an. amount totaling
| |
| .$544 nmionk plus interest., Tbe plaintiffs will likely assert additional :damages for the period 1974 through 1988.
| |
| The -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 12000. Entergy intends to defend this matter vigorously, both in court and at the LPSC. -Theoutcome of the lawsuit and the ýLPSC: proceeding anno" be. predicted ..at this time. Management has provided reserves for this,, other
| |
| -_litigation, and Entergy Louisiana's formula rate plan proceedings based on its estimate. of the outcome of these
| |
| 'proew!ings Filings with the MPSC (Entergy Corporation and Entergy Mississippi)
| |
| In March 1999, Entergy Mississippi submitted its annual performance-based formula rate plan filing for the
| |
| .1998 test year. In April 1999, the MPSC approved a prospective rate reduction of $13.3 million. This rate reduction went into effect May 1, 1999. In June 1999, Entergy Mississippi revised its March 1999 filing to include a pprtion of refinanced long-term debt, not included in the original filing. This revision resulted in an additional rate reduction of approximately $1.5 million, effective July 1999.
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| - 145 -
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| | |
| Filings with the Council 1997Settlement (Ent=r Coporation.and Entergy New Orleans)
| |
| Entergy New Orleans submitted its cost of service and revenue'requirement filing in September 1997 to the Council. In connection with this filing, Entergy New Orleans filed a settlement agreement with the Council, which
| |
| .wasaipproved in November 1998, The settlement agreement~required'the folloWing:
| |
| " o base rate reductions -for,Entergy N6, Orleans' electri. customers of $7.1 million effective January 1, 1999, $3.2itiilliOn effev October '1,1999, and $16A million-effetive October 1, 2000; o ia base rate,reductioni;for Entergy New Orleans' gas custome bof $1.9 million efective January 1999; and no base rate increases prior tWOctober 1,2001.
| |
| t.;Natural GasEntrgy C4pratiomand Entergy New Otleans),
| |
| The Council held, herings in. May 1999 regarding the .pudenc -ofEntergy New Orleans ntural gas purchasi --. tprati Fuel Adijusthient-:CMasLitiaaion (Entergy-Corporation and Entergy New Orleans)
| |
| ,In April 1999,. a group of tmtepayers: filed'a-complaint against!Entergy New; Orleans, Entergy Corporation, B.,Entergy Servies, and. Ent6rgy :Power in.state court. in.Orleans PWh purportedlý ot behalf of all Entergy New Orleans ratepayers. The--plaifttiffs:seek treble damages for alleged injuries: afsing, from the defmdants' alleged violations of Louisiana's antitrust laws in connection with certain costs passed on to ratepayers in Entergy New
| |
| .: Orleans* . fuel adjustment,. filingst with:.the. Council.,.. In particular, plaitiffs ,allege :that Entergy New Orleans improperlylncluded. c¢ertain:costs.in the.catculationt of fuel charges. and that Entergy New Orleans imprudently puri*asedi high-co*t- fuel, boir other Eptergy Afiuates:. Plainfiffsiallege. that Entergy New Orleans and theother defendant Entergy companies eonspired tormdke.these purchases to the; detrimet of Entergy New Orleans'. ratepayers
| |
| -and tothe benefit of Entergy's shareholders, in violationwof Louisiaha'santitrust laws. Plaintiffs also seek to recover interest, andattomey fees.:.,Exceptions to the, plaintiffs' allegations-,were;f1edlby Entergy, asserting, among other
| |
| :thihglgthat jurisdiction over these issues xrsts with. the Council and FER;C. If neicessary, ,at the .-ppropriate time,
| |
| ;lEnt~rgy will: also.raise its defenses to the antitrust claims. At present, the suit,in. state.court is stayed by stipulation oftepaities "Plaintiffs;also filed this complaint with the Council. in order to initiate a review by the Council of their allegations -and to 'force restitution to ratepayers'df all costs they allege were improperly and imprudently included in the fuel ;adjustment filings..ý 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.
| |
| River Bend Cost Deferrals (Entergy
| |
| .' '.,'I Corporation
| |
| ; / . , ' " -
| |
| and :Entergy Gulf States)
| |
| "Entergy Gulf States was amortizing $192 million of River Bend operating and purchased power costs, depreciation, and accrued carrying chaiges over a 20-year period, however the PUCT recently accelerated the
| |
| 'recdýery of these deferrals to a thred-year recoveiy period endixii May 19099 The settlement agreement 'discussed above dismissed Entergy Gulf States' appeal regarding these deferrals 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 December 31, 2001.
| |
| -146-
| |
| | |
| Grind Gulf 1 Deferrals and Retained Shares (Entergy Corporation and Entergy Arkanasas)
| |
| . IUnder the settlement agreement entered into with the APSC in 1985 and amended in 1988, Entergy Arkansas retains 22% of its 36% share of Grand G(ilf 1-related costs and recovers the remaining 78% of its share in rates. In the event that Entergy Arkansas ig not able to sell its retained share to third parties, it may sell such energy to its
| |
| -cost of retail customers at. a price equal to its avoided energy cost, which is currently less than Entergy Arkansas' 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 GrmdGulf*. 1subject to certain terms and conditions, Entergy Louisiana retains and does not recover from retail 82%
| |
| ratepayers, 18% of its 14% shaie, of the costs of Grand Gulf I capabity and energy and recovers the remaining per KWH of its share in rates. Entergy Louisiana is allowed to recover through the fuel adjustment clause 4.6 cents for the energy related to its retained portion of these costs. Non-fuel operation and maintenance costs for Grand Gulf .are recovered through Entergy Louisianaes base rates. Alternatively, Entergy Louisiana may sell such energy tononaffliated,.parties at prices above the fuel adjustment clause recovery amount, subject to the LPSC's approval.
| |
| (Entergy Corporation and Entergy New Orleans)
| |
| , rUnder various rate settlements with theeCouncil in 1986i .1988, and 1991, Entergy New Orleans agreed to was absorb and not recover from ratepayers a total of $96.2 million of its Grand Gulf I costs. Entergy New Orleans year through 1995, and to -defer certain permutted to implement annual rate increases in decreasing amounts each As of costs and related carrying charges for recovery on a schedule extending from 1991 through 2001.
| |
| December 31, 1999, the uncollected balance of Entergy New Orleans' deferred costs was $35.8 million.
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| FERC Settlement (Entergy Corporation and System Energy)
| |
| In November 1994, FERC approved an agreement* settling a long-standing dispute involving income tax total of allocation procedures of System Energy. In accordance with the agreement, System Energy will refund a approximately $62 million, plus interest, to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy debits New Orleans through June 2004. System Energy also reclassified from utility plant to other deferred Although such costs are excluded from rate base, System approximately $81 million of other Grand Gulf I costs.
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| and the loss Energy is amortizing and recovering these costs over a 10-year period. Interest on the $62 million refund of the return on the $81 million of other Grand Gulf 1 costs will reduce Entergy's and System Energy's net income by approximately $10 million annually until 2004.
| |
| Proposed Rate Increase (System Energy)
| |
| 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 in costs, the depreciation rate, and the rate of return on common equity. The request also includes a proposed change that of expensing those costs as incurred to the the accounting recognition of nuclear refueling outage costs from 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 decommissioning cost
| |
| -147-
| |
| | |
| methodology. The ALJ recommended a decrease in the return on common equity from 11% to 10;86%. Other portions of System Energy's request for a rate increase were approved by the AL. All of the ALJ's findings are advisory, and may be accepted, modified, or rejected by FERC in a final order. .
| |
| If FERC were to approve the ALJ'slfindings, System Energy would be required to make a refund of money collected under its proposed tariff in the amount of $2282 -million as of Deocember 31, 1999, together with interest in the amount of $39.6 million. As of December 31, 1999, System Energy has fully provided reserves forthis potential refund. t is not certain when.FERC may issue a final order in this rate proceeding or whether FERC will accept, modify, or reject the AUL'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.
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| (Entergy Mississippi)
| |
| Entergy Mississippi's, allocation of the proposed System Energy. wholesale rate increase is $21.6 million
| |
| .annually. In. July. 1995,2 Entergy. Mississippi filed a.schedule with, the MPSC that defers the retail recovery, of the System Energy; rate increase. Uedeferral plan, which was approvedby -the MPSC, began in Decerber 1995, the effective, date of the System, Energy rate increase,. and.will end after the issuance of a final order by FERC.: Under this plan, the, deferral period was anticipated.to have ended by September 1998,.and the deferred amount would-have been amortized over 48.months, beginning in October 41998. :Although the dferral period under the plan has ended, FERC has not ydt issued an order. For that reason, Entergy, Mississippi filed a revised deferral. planwith 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. Thc$11.8 nili9n.isbeing amortized over the original 48-month period, which began in October 1998. The amount of System Energy's proposed increase in excess ofthe $11.8 million'.will cntinue:toh:be deferred until the issuance of a final order by FERC, or OctobQr 2000,;whichever occurs first. These deferred amounts, plus carrying charges, will'be amortized over a 45-monthfperiot beginning in October 2000, :,
| |
| (Entergy New Orleans)
| |
| 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 Energy rate increase.. The deferral began in February 1996 and will end after the issuance of a final order by FERC.
| |
| Grand Gulf Accelerated Recovery Tariff (Entergy Arkansas)
| |
| In April 1998, FERC approved the GGART that Entergy Arkansas filedcas part of-the settlement agreement 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 of*.etail 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)
| |
| In September 1998, FERCapproved the GGART for Entergy Mississippi's allocable portion of Grand Gulf which was filed with FERC in August 1998. 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 June-30, 2004..
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| - 148 -
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| | |
| NOTE 3. INCOME TAXES Income tax expenses for 1999, 1998, and 1997 consist of the following (in thousands):
| |
| 1"99 - En' IEnterby Etergy Entergy Entr System Arkansas Gulf States Louisiana Mississippi New Odemns Eaergy Current.
| |
| Federal S 452,568 $ 25,812 $ 64,991 $ 115,179 $ (660) $ 13,238 $ 121,733 27,730 - -
| |
| Foreign 65,834 5,781 11,669 22,675 131 2,923. 18,979 State 546,132 31,593 76,660 137,854 (529) 16,161 140,712 Totao (153,304) 26,334 13,513 (9,953) 19,566 (2,615) (77,173)
| |
| Deferred - net Investment tax dredit (36,161) (3,915) (15,008) (5,533) (1,500)Y (516) (9,688) adjustments - net ITeoorded income tax expense L$7356,667 S 54,012 __ 75,165__. 122,36A8 $ 17,537 $ 13,030__$ 53,851 Entergy Entergy Entergy Entergy Enter*y System atew Arkansas Gulf States Louisiana' Mississippi XNew,.1ealns-_. Energy "curent. 91,107
| |
| $ 235,979 $ 68,814 $ 43,729 $ .69,55.1 S 34,984 S .15,010 S Federal Foreign 28,156 - " -
| |
| 67,163 14,853 17,218 . 12%643 5,541 2,530 14,378 state
| |
| * 331,298. 83,667 . 60,947 -. 82,194 40,525 17,540 105,485 (109,474) (7,153) (90,314) 32,506 (10,983) (6,993) (24,745)
| |
| Defrred -net Investment Uax credit 44,911 (5,140) 61,140 (5,596) (1,511) (505) (3,477) adjustments - net Recurded Income tax expense S 266,735 S 71,374 S 31,773 $ 109,104 S 28,031 S 10,042 $ 77,263 Entergy Fatergy Entegyw Entergy Entergy systemi 1997 Enegy Arkansas Gulf States Louisiana Mississisi New Orieans I- Energy Current:
| |
| $ 433,444 $ 113,278 S 68,881 $ 94,448 S 49,472 S 12,003 S 98,428 Federal 237,337 - - - -
| |
| Foreign 76,905 23,756 6,007 19,974 9,476 2,096 15,596 State 747,686 137,034 74,888 114,422 58,948 14,099 114,024 Total (312,691) (73,406) (104,435) (9,833) (30,697) (1,369) (35,894)
| |
| Detcred - net Investment tax credit 36,346 (4,408) 51,949 (5,624) (1,507) (581) (3,476) adjustments - net
| |
| $ 471,341 S 59,220 $ 22,402 S 98,965 $ 26,744 S 12,142 S 74,654 Recorded income tax expense
| |
| - 149 -
| |
| | |
| Total income taxes differ from the amounts computed by applying the statutory income tax rate to income before taxes. The reasons for the differences for the years 1999, 1998, and 1997 are (amounts in thousands):
| |
| Etteri Entegy Entegy Enterg Entrgy System Entav Arkaas Gulf States o isi NewOrles FheW*
| |
| .1999 70,058 $ 109,948 S 20,693 $ 11,196 $ 47,678
| |
| -,tn, Ccw tedat .ta. rate (35%) S 333,093 $ 43,164 $
| |
| Inaeras (ra ftions) intax restlting froni State incmne taxes net ef 49,487 6,949 18,805 13,741 1,982 1,930 6,080 federal imxxm tax effect 9,577 (1,093) 2,232 15,597 49,460 18,429 4,718 Dxepre*aticn (24) (207)
| |
| (254) (90) 67 Rate defenals - net Anxxozati of investment (29,015) (5,132) (6,642) (5,532) (1,500) (518) . (9,691) tax Madts (8,042) (5,250) (2,795) 532 (284) (272) 27 differeaces US tax benefit an foteign inmme (9,584)
| |
| Benefit of EutmV Ccqxatfiom expenses (3,341) (4,046) (4,053) (1,936) (754) (4,552)
| |
| Change in vahluton allowance (46,315) (1.288) 17 "l7 (301'I (577)
| |
| O(e-net
| |
| $ 356,667 1$ 54,012 $ 75,165 S 122,368- $ 17,537 S 13,030 S 53,851 Total income taxes 37.5% 43.8% 37.6% 39.0% 29.7% 40.7% 39.5%
| |
| Effective Inomne Tax Rate
| |
| - 150 -
| |
| | |
| Entergy EnteWgy Enteri Entera Entergy a System Arkonsas Gulf States Louisiana Mississippi New Orleans Energy 1998 -- W I Conputed at stautoiy rate (35%) $ 368,327 S 63,814 $ 27,358 $ 101,007 $ 31,734 $ 9,162 $ 64,309 Increases (reductions) in tax res-tig friom State income taxes net of 37,494 9,289
| |
| * 7,744 9,156 3,053 831 7,421 1.,-4,633 federal income tax effect (686) 888 40,578 6,497 11,099 8,147 Depreciation. 659 372 (2,535) 292 (511) . : 701 Rate deferrals-net Amorization ofinvestment (5,592) .(3,480)
| |
| (21,285) (5,136) (5,061) (1,512) (504) tax credits 149 (187) (18)
| |
| (3,570) 1,078 (4,404). (188) differncos US tax on foreign incune 108,194 Nm-taxable gain om sale of foreign assets (20,283)
| |
| Cage inUK statutoy rate (31,703)
| |
| Foreign subsidiary basis difference (58,235)
| |
| Retchedrate on gain om sale, of foreign. assets (56,712)
| |
| Non-deductile fimanise fees 7,315 nterest on pepetua instruments (5,467)
| |
| Benfit of Enter Corporation (5,212) (4,948) (3,947) (2,386) (629) (4,999) expenses Qbage k valuatiaon allowance (106,636) 189 (603)
| |
| Oter-inet t`:es 9.229-
| |
| * 343 * (674) 149 214
| |
| : 1_ - .
| |
| + I*,.
| |
| 1 34 (674),,
| |
| 71.374 S 31,773 $ 109,104 S 28,031 $ 10,042 $ 77,263 Total income taxes S 2667351S Effective Income Tax Rate 25.3% 39.1% 40.6% 37.8% 30.9% 38.4% 42.1%
| |
| Entergy Entergy Entergy Entergy Entergy System lter* Arkansas Gulf States Louisiana Mississi NewOrleans pp EnerP /
| |
| 1997 32,691 S 9,658 b1,iZ
| |
| $ 270,284 $ 64,470 84,253 S S 28,833 $ 94,253 S 32,691 S 9,658 $ 61,932 Computed at statutory rate (35%)
| |
| Increases (reductions) in tax resulting from:
| |
| State income taxes net of 33,272 8,382 1,274 12,106 3,110 1,191 7,209 federal income tax effect 964 2,236 15,563 25,471 (2,784) (3,670) 13,162 Depreciation (526) 396 3,484 1,543 5,575 (3,504)
| |
| Rate deferrals - net Amortization of investment (19,592) (4,404) (3,981) (5,627) (1,512) (589) (3,479) tax credits Flow-through/permanent (6,537) (1,558) (14,658) 47 (78) (187) differences 234,080 UK windfall profits tax Change in UK statutory rate (64,670)
| |
| Non-deductible franchise fees 17,234 Interest on perpetual instruments (9,094)
| |
| Benefit of Entergy Corporation (831) (4,037) expenses (4,920) - (4,788) (2,704)
| |
| (19 *O1'i (1 *fl"1 9A029 338 (2223) 268 (2,534)
| |
| Other - net (12 , , (1 509) 9, Total income taxes S 471,341 $ 59,220 $ 22,402 $ 98,965 S 26,744 $ 12,142 74,654 61.0% 31.6% 27.2% 41.1% 28.6% 44.0% 42.2%
| |
| Effective Income Tax Rate
| |
| - 151 -
| |
| | |
| Significant components of net deferred tax liabilities as of December 31, 1999 and 1998 are as follows (in thousands):
| |
| 1"9 Entergy Eatervr Enterg pnterg Fzierv S31ste emeaV I Adransas Gulf States Louisiana Mssissippi NewOleans Energy Defemed Tax Liabilities:
| |
| Net regulatory asse/(liabilities) $ (1,268257) S (229,555) S (432,256) $ (2T2) S (32,048) S 44 .. S (3,589)
| |
| Plant-related basis diffErences (3,041,135) (533,375) (1,013,110) (749,257) (220,827) (62,104) (452,083)
| |
| ,at defersi ,(77,652) (6,168) (3,128) (44,214) (24,142)..
| |
| RAo brals (201,958) (77,812) (15,157) (24,741) (9,214) (7,718) (22,412)
| |
| (4,589,002) $ (M910) S (1,463,65:) (,0528 S (306,30) S (89,47 ,04 "DeferredTax Asseta Aciuisdated deferred inveshment tax Credit 178,153 37,211 46,851 47,390 7,997 3,048 35,656 Net cperatin loss car(orwards 2,137 - 2,137 ---
| |
| Ca*ta loss Cartyiywads 6 2,7 5 4 - .- ,
| |
| Foreip tax credits 116,701 - - -
| |
| Alternative mininmwn tax credit 405,65 40.658 -...
| |
| Sale and leaseback 230,690 - 107,184 - - 123,506 Removal cest 108,572 943 26,848 66,786 1,994 12,001 Unbilled revenues 40,761 - 21,161 17,613 (1,183) 3,165. .
| |
| Penmio-rehted item 32,734- 10,810- 9,509 (1,508) &064 2,883 Rate refund 142,934 - 45,781 20,270 - P347 102,422 Reser for repdabst ayustzents 124,078 - 124,078 - - -
| |
| Tranition cost acarual 43,127 43,127 - "
| |
| FERC Settlement 12,638 .MOO .. 12,638 Other 161,074 13,358 18,485 3,760 - 7,113 8,872 Valuation allowance (91,0379) - - . ...
| |
| Total 5, 1,206,022 $ 94,639 $ 336,809 $ 272,5.7 $ 7,300 $ 34,743 $ 285,977 Net deferred tax liability S (3.38980) S (752,271) S (1,126ý,42) s (779,770) S (29,003) $ (54,741) s (48,107
| |
| -152-
| |
| | |
| . I . Ema t* Etera tWtW Entergy Esitergy S39tem 11991 Aac~ Gulf states Louisiana Misnsisipi New COlean EneWg Dd..rd Th. Liablififs: (2,305) $ (258,982)
| |
| (1,334,014) S (286,983) $ (432,070) $ (319,88) $ (34,086) $
| |
| Net regulaltoy awsetsliabilitics) (489,501)
| |
| (505,851) (1,027,463) (739,298) (214,461) (57,778) lant-reated basis dffwne (3,053,837)
| |
| (1(,350) (26986) (36,064) (32,671)
| |
| Rate deferals,. (97,071)
| |
| (8%,590) -
| |
| Gain on sale of auets (63,663) ( 2,12)
| |
| W,2) (6,531) (,2) (20,517)
| |
| POWe (55.700)
| |
| Total ( ,87 (,495,42 $ (1,084;79!2 S 021,1!2) S (98,126 S (79,0_00)
| |
| S (,621,122 $
| |
| Deftred Tax Assets:
| |
| Amamdated d6sred invetment 3,247 3W,96 192,696 38,708 55,664 49,520 8,571 tax ceeit 8,779 -
| |
| 8,97 bVaknent tax ,edit curyferwards " "
| |
| 2,137 - 2,137 /
| |
| Ndt openaing lost curfrawads 65,939 -
| |
| capital lss ,unyforwards 135,727 -
| |
| Fereign tax credits 40,658 - 40,658 Aftenative ninimum tax credit 131,942 240,067 .. 108,125 -
| |
| Sale and leasecak 11,759 i08,88 " 1,127 27,015 66,012 2,945 R*moval Cost 36,802 - 20,365 12,660 (726) 4,53 Unbilled revenucs 3,833 11,565 9,664 - 5,849 Pension-related items 30,911 49,385 = - 60,927 Rate refi*d 110,312 -
| |
| - 158,839 - . "
| |
| ,esve forr-eouatgY a4ustue-t 158,839 35,374 35,374 - .
| |
| Transition cost accrual 15,057 15,057 - - . . -
| |
| FERC Settlemnt 9,270 8,506 10,719 1,905 33,944 9,218 "
| |
| 12.26..1 .
| |
| Valuation allowacoe S 257,251 1,050,814 S 77,114 $ 408,551 $ 255,199 $ 10,790. 34,628 Total S Net defered tax liability S (3,570,308) S (730,733) $ (L086,891) $ (827,599) $ .280,352) S (63,498) $ (511,749)
| |
| As of December 31, 1999, Entergy had net operating loss carryforwards of $24.5 million for state income utilized against tax purposes, all related to Entergy Gulf States. If the state net operating loss carryforwards are not (AMT) credit tax income from its subsidiaries, they will expire between 2000 and 2004. The alternative miniumm related to Entergy Gulf States. This AMT credit can caryfolrwads -as of December 31, 1999 were $40.7 million, all tax liability of Entergy Gulf be carried forward indefinittely and may be applied solely against the federal income Stat*._
| |
| T'lk valuation allowance is provided primarily against foreign tax credit carryforwards, which can be utilized against fhtiii United States taxes on foreign: source income. If these carrýf rds are not utilized, they will expire between 2000 and 2004.
| |
| AtDecember 31, 1999, unrettý d earnings of foreign subsidiaries were approximately $29.5 million. Since distnibution it is Entergy's intention to indefinitely reinvest these earnings, no U.S. taxes have been provided. Upon of these earnings in the form of dividends or otherwise, Entergy could be subject to U.S. income taxes (subject to foreign tax credits) and withholding taxes payable to various foreign countries.
| |
| - 153 -
| |
| | |
| NOTE 4. LINES OF CREDIT AND RELATED SHORT-TERM BORROWINGS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entei~gy 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 authorized to borrow from the Entergy System Money Pool(money pool). The money pool is an inter-company borrowing-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 Borrowines (in Millions)
| |
| Entergy Arkansas $ 235 $ 40.6 Entergy Gulf States 340 36.1 Entergy Louisiana 225 91.5 Entergy Mississippi 103 50.0 Entergy New Orleans - 35 9.7 System Energy 140 '
| |
| Total 0227 -1 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 December-31, 1999 borrowed from the money pool. Some of these borrowings are restricted as to use and are collateralized by certain assets.,'
| |
| In September 1999,, Entergy Corporation amended its $,250 million, 364-4y bank credit facility. As of December 3!, 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 fluctuate depending on the senior debt ratings of the domestic utility companies. There is further discussion of commitments for long-term financing arrangements in Npte 7 to the financial statenents.
| |
| On February 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 remaining proceeds for general corporate purposes and working capital needs.
| |
| - 154 -
| |
| | |
| NOTE 5. PREFERRED, PREFERENCE, AND COMMON STOCK (Entergy Corporation, Entergy Arkahsag, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans) stock for The number of shares authorized and outstanding, and dollar value of preferred and preference Entergy Corporation, .Entergy Arkansas, Entergy Gulf States, Entergy.Louisiana, Entergy- Mississippi, and Entergy New Orleans as of December 31, 1999, and 1998 were:
| |
| Sham Call Price Per Slxasof Auiorizd Decte 31, and Outstanding 1998 .1999 1998 1999 1"9 (Dollars inThmsanb*
| |
| Fnlrv Arkam Nkrred Stk l~hog stig ud Cumulative, $100 par value:
| |
| 70,000 $7,000 $7,000 $103.65 4.32% Series 70,000 9,350 107.00 93,500 93,500 9,350 4.72%Saies 75,000 7,500 7,500 102.83 75,000 4.56%Series 75,000 7,500 7,500 102.50 75,000 4.56% 1965 Series 10,000 10,000 102.83 100,000 100,000 6.08% Series 10,000 10,000 103.17 100,000 100,000 7.32% Series 15,000 15,000 103.25 150,000 150,000 7.80% Series 20,000 20,000, 102.80 200,000 200,000 7.40% Series 15,000 15,000 103.00 150,000 150,000 7.880/ Series Qmdative $0.01 par valu 600000 15,000 15,000. 25.00
| |
| $1.96 Seies (a) 600,000 1,613,500. $116,350 $116,350 Total witixut sinkingfuml 1,613,500 Qnmi~atlie $100O par value:
| |
| 200,000 $20,000 8.52% Series Cumtiate $25 par valh 81,085 9.92% Series 2,027" 281,085 22,027 Total Vh sitniing figd Fair Value of Prekned Stock $22,986 with sinldng fmd (e)
| |
| - 155 -
| |
| | |
| Shares Cup Pr"Pe1r AutIorbed Shaveas of and Oidsbntai December 31, 1999 M 1999 1998 1999 Eitern Gulf Sttes Preferred amd Preference Stock (Dolsi in Thousapsh)
| |
| PrfereDce Stock CuiM ve, without par value 7P/. Series (a) (b) 6,000,000 6,000,000 $150,000 $150,000 Pllferred Stock Autrized 6,000,000 shares,
| |
| $100 par alue, cun** five 4.40% Series 51,173 51,173 $5,117 .$108:00 4.50% Series 5,830 5,830 583 583 ..'105.00 4.400/a- 1949 Series 1,655 1,655 166 .166 103.00 4.201/6 Series 9,745 9,745 975 9751 102-82 4.44% Series 14,804 14,804 1,480 1,480 103.75 5.00% Series 10,993 10,993 1,099 1,099 104.25 5.080/0 series 26,845 26,845 2,685 .2,685 104.63 4.52% Series 10,564 10,564 1,056 1,056 103.57 6.08% Series 32,829 32,829 3283 3283 103.34 7.569/6 Series 35Q,000 35O,000 35,000 35,000 101.80 Total ilifi~t sinking fund 514,438 514,438 $51,444 $51,444.
| |
| 8.80r/. Series 139,971 $13,997 8.64% Series 84,000 8,400 Adjustabl Rate - A, 7.02%/ (q) 144,000 156,000 $14,400 15,600 $100.00 Adjustable Rate - a, 7.03% (c) 202,500 20,250 22,500, 225,000 100.00 Total with sn"g fund 346,500 604971 $34,650 .$60,497 FarValue of Prftfce Stodck ad Preferred Stock with Ankg fund (e) $183,357 $203,456
| |
| -156-
| |
| | |
| Sluhre can Pfice Per Slure as of Amdou .m Decewber31, mad9 9!9I8 1l99 Mg 1999 (Dollan hin 13mzIam Cumulative, $100 par value.
| |
| $6,000 $6,000 $104.25 4.96% Series 60,000 60,000 104.21 7,000 7,000 4.16% Seriý 70,000 70,000 7,000 7,000 104.06 4.44% Seriis 70,060 7,500 7,500 104.18 5.160/ Series, 75,000 .o,ooo 75,000 103.00 8,000 8,000" 5.40Vo Serie oooo.
| |
| 8,000 8,000 102.92 6.44% Series 80,000 80,000 10,000 10,000 .103.78 7.84% Series 100,000 100,000 10,000 10,000 103.36 7.36% Series 100,000 100,000 Cumulative $25.psrvalue: 37,000 1,48D,000 1,49%000 37,000 25.00
| |
| &0(:0/0 Scriii :, $100,500 . $100,500 2,115,000 2,115,000 Total withoi siking Rind
| |
| $50,000 7.00 */OSi ". 50,000 35,000 35,00" 350,000 350,000 $35,000 $85,000 Total w& sinking fund 85D.000 Fsir V"ioidoirn Stock with M nd(e) $35,364 $87,813 Eutemf Mmssaput PrefivedStk Without ahiling ftin*
| |
| 59,920 59,920 5,992 5,992 103.86 4.36% Seies 107.00 43,888 43,88 "4,1800 4.k%Series 10,000 102-88 100,000 10,000 100,000 10,000 102-81 100,000 10,000 7.44% Series 20,000 100.00 200,000 20,000
| |
| " "TtW*ut36 uSeries 5038,0.. $50,381 $50,381.
| |
| Total wAitoit sinkng fund 503,80W
| |
| - 157 -
| |
| | |
| CAIPticeyf IDLmfr31, 1999 .. , 1M I 0 .Uy in
| |
| ..... -:d 1999 Fitop New O&=e~ Prebie Stoc Wahot -ag m Qnm~aifiv, $100 per value 4.75a Scie .77,79% 77,798 7,780 7700, 105.00 4.36% Seaies 60,000 (000 6,0(X 6,000 104.57 5.56%otalixs 60e1,0 61,0O)0 6,000 6,0010 102.59 Totalm~ntsidngfiimn 977819, $19,780 $19,780 Suabdd sP Stck(a)b):
| |
| d 6,000,000 6,00O,000 $150,000 $150,000
| |
| &Wdmia -dmqo 4,944,544 4,944,544 $338,455 $338,ý*t A 1hontl -fnd: 6KW50 1,736,056 $69,650 $167,523 ,.
| |
| FabrV offte BmdStcdk mdbdfaned Stokiidkl rohlngh*lme) $218,721 (a) The total dollar Value represents 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. .; . .1 (c) Represents weighted-average annualized rates for 1999.
| |
| (d) This series is not redeemable as of December 31, 1999, but becomes mandato.j*y redeem ,bleon November 1,2001....
| |
| (e) Fair values were deternnpd using bid prices reported by dealer markets and by nationally recognized investment banking firms. There is ad.ditional disclosure. of fair value of financial instruments in 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 duringthe 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)
| |
| -158-
| |
| | |
| 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:.
| |
| Entergy Entergy Entere- 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 amounts 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 shares of Entergy common stock, for an aggregate consideration of up to $250 million. In July 1999, the Board approved the comnuitment of up to an additional $750 million toward'the repurchase of Entergy common stock through December 31, 2001. In 1999, Entergy Corporation repurýsed 8,484,000 shares of its common stock for an aggregate purchase price of approximately $245 million.
| |
| Shares are purchased on 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 and proceeds of $7.5 million from the issuance of 253,269 shares of common stock under its dividend reinvestment stock purchase plan during 1999.
| |
| The Equity Ownership Plan grants stock options, equity awards, and incentive awards to key employees of of the the domestic utility companies. The costs of equity and incentive awards are charged to income over the period grant or restricted period, as appropriate. Amounts charged to compensation expense in 1999 were immaterial.
| |
| are Stock options, which comprise 50% of the shares targeted for distribution under the Equity Ownership Plan, 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 for stock 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 1997.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 for awards under the option plan.
| |
| The fair value of each option grant it estimated on the date of grant using the Black-Scholes option-pricing model with the following stock option weighted-average assumptions:
| |
| 1999 "1998 1997 Stock price volatility 20.3% 20.9% 19.3%
| |
| Expected term in years 5 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 Nonstatutory stock option traniactions are summarized as follows:
| |
| its" "1998 L997'
| |
| 'Ayenrge - Average 'AverAg
| |
| .Nmuuer Option.
| |
| of Optiom Price of Options Pice of Options Price Beginning-of-year balance: i.. 901,639 $ 26.21 1,176,308. $,.25.12 .1,053,308 $- 24.94 Op sg .- 5,354,189 29.88 125,000 29.46 ,255,000 25.84; Options exrcised (213,084) 236.'9 (350,169) 23*37 (2,500) 23.38 Options f&ýfdted (414,638) 30.34 (49,500) 28.56 (129,500) "25.10 End-ofyear baln.nce, 5,631,106 $ 29.50 901,639 $ 26.21 1,1.7,6,308 $ 25.12 Options exercisable at year-ad 612,531 861,639 421;909 W *ghI average fair value of options granted $ 4.72 $ 4.11 $ 3.10
| |
| - 160-
| |
| | |
| as of December'31,1999:
| |
| The following table sunuamarizes information 'abouit stock options outstanding Options outstadin'g Options Exercisable 0,iht IAvg Rem g . Weighted# ..Number Weighted Exercisable Avg. Exercise As of Contractul Avg.Exercise Price
| |
| -Range pf' at.12/31/ 9 9 12/31/99 Life-Yrs. Price $ .24.83 Exerse Prices: .533,312
| |
| '$20:"430W 5,173,076 8.8 $ -29.29 79,219 $ . 35.99
| |
| '.8.3 $ *-31.81t
| |
| $30 - $40 :"-458,030 5,631,106 8.7 $ 29.50 612,531 $ 26.27
| |
| .0 40 the SEC authorized Entergy To,meet tb* requirments ofetI. Employee ,tock Investmput plan (ESIP),
| |
| Corpqraqt'n to issuegr acquire, through March 31, 2Q90, up to 2,0Q0,000i shares of its common stock tobe held as treasury shares. .ieESP-is authorized through them999 j a March 31, 2000. Entergy Corporation satisfy ESIP requirements. Under may issue either treasury shares or previously authorized but unissued shares to 10% of their. regular annual salary (not to the terms of the ESW, employees can choose each year t have up to at a purchase price equal to 45% of the lower of exceWp$25,000) withheld to purchse the Company's common stock March 3L. Under the plan, the number. of the market value ou-fhe first or last business day of the plan year ending 1997.
| |
| subscribed shares was 285,505 in 1999; 294,108 in 1998; and 319,457 in using the Black-Scholes option
| |
| ,,The fair value of gSIP shaMe granxtedwas .estim,.#ed o the dt4 of the grant ppricing model with eypepted ESIP weighted-averag assumptio"".
| |
| -... 99 ,, 99* 1997 24.1% 19.3.%1 Stock price.yolatiJityJ..J 1 1 Expected term in years 4.6% 5.1% 6.1%
| |
| Risk-free interest rate 4.3% 6.1% 7.4%
| |
| Dividend yield $1.20 $1.80 $1.80 Dividend payment
| |
| $6.32, and $4.75 in 1999, 1998, and The weighted-average fair value of those purchase rights granted was $5.90, ($3,086), ($256,000), and $98,000 in 1997, respectively. The impact on Entergy's net income would have been determined based on the fair value at 1999, 1998, and 1997, respectively, had compensation cost for the ESIP been the grant date for awards under the ESIP.
| |
| (Savings Plan). The Savings Entergy sponsors the Savings Plan of Entergy Corporation and Subsidiaries and its subsidiaries who have completed Plan is a defined contribution plan covering eligible employees of Entergy matching subsidiary may make certain service requirements. The Savings Plan provides that the employing Entergy up to 6% of their salary, contributions to the plan in an amount equal to 50% of the participant's basic contribution, to the Savings Plan, and any in shares of Entergy Corporation common stock. Entergy's subsidiaries' contributions Entergy's subsidiaries contributed income thereon, are invested in shares of Entergy Corporation common stock.
| |
| Savings Plan.
| |
| $14.5 million in 1999, $13.6 million in 1998, and $13.2 million in 1997 to the
| |
| - 161 -
| |
| | |
| NOTE 6. COMPANY-OBLIGATED REDEEMABLE PREFERRED SECURITIES (Entergy Arkansas, Entergy Louisiana, Entergy Gulf States)
| |
| Entergy Arkansas Capital I, Entergy Louisiana Capital I, and Entergy Gulf States Capital I (Trusts) were established as financing subsidiaries of Entergy Arkansas, Entergy Louisiana, and Entergy Gulf States, respectively, for the purpose of issuing common and preferred securities. The Trusts issue Cumulative Quarterly Income Preferred Securities (Preferred Securities) to the public and issue common securities to their.parent companies.
| |
| Proceeds from such 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 Securities Securities Securities/ Investment in Securities at Trusts* Of Issue Issued Issued Debentures Debentures 127,31-99 (In.Millions) (in Minions)
| |
| Arkansas Capital 1. 8-14-96 $ 60.0. $ 19 8.50% S 61.9 $ 60.3 Louisiana Capital I 7-16-96 $ 70.0 ;11V-2.2 9-00% $ 72.2 $V-70.0 Gulf States Capital I 1-28-97 $ 85.0 $ 2.6 8.75% $ 87.6 $ 77A4 The Preferred Securities of the Trusts mature in the years 2045 and 2046. The Preferred Securities are redeemable at 100% of their principal amount at the option of Entergy Arkansas, Entergy Louisiana, and Entergy Gulf States beginning in 2001 and 2002, or earier under certain limited circumstances, including the loss of the tax deduction arising out of the interest paid on the Debentures. Entergy Arkansas, Entergy Louisiana, and Entergy Gulf States have, pursuant to certain agreements, fully and unconditionally 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.
| |
| -162-
| |
| | |
| NOTE 7. LONG - TERM DEBT (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Energy)
| |
| Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Lorg-tern debt as of December 31, 1999 was:
| |
| F
| |
| * uEf Bitarg Ene* F.ntm wntmV -
| |
| ldurities Intmest Rates Fr.. To From To I L:V £
| |
| -- s W w Wilia ,-. 1" "
| |
| S".:'-
| |
| * ai w swx)
| |
| Frst MItgap BCmds $240,000 $288,359 $205,000 5.800%o 8.2500/c $1,337,109 $603,750 115,000 2000 2004 428,000 215,000 98,000 2005 2010 6.500% 7.500% 260,000 444,950 115,000 7.000% 8.940% 819,950 2020 2026 G&RB1ds &W$360o00 $55,000 415,000 2002 2012 6.200% 8.2.0% 60,000 115,000 175,000 2013 2026 7.550% &0000/o Govq-o nmW obligatid (a) 22,315 220 22,095 2MoO 2010 5.450% &250% 355,335 9.0000/, 569,535 214,200 2011 2020 5.600/ 72,000 102,000
| |
| &.000'/ 1,051,750 415,120 46,030 416,600 201 2030 4.850/
| |
| 75,000 Dd20O0 75,000 2000 2000 7.380% 7.800%
| |
| Salten Project Se=CrQedit Facility, 57,681 avg rte 6.93% due 2014 r ODa1a1Qeect Smior Qeuit 342,929 FacilAy, avg rAe 5.98%due2016 67,000.
| |
| EPEdWl,7 CN~ePA3.sW 7.7% due 2000 136,088 136,088 Loag-TermDOE Cblgafim (Note 9) 330,106 330,306 Wakrid3 Lease Cbligadm 7.45i/b (Note 10) 465,480 465,480 C GraWf.ILease0 U7.(%(Note 10).
| |
| "ctia 10,391 620 9,771 Ohedr Lwg-TcanDebt (17.396) (7,107) (4,320) (1.934) (1,564) (917) .(1,54) tUonotbdfnuadiscclmt-et a.
| |
| 6,M7,138 464,465 169,083 1,160,526 77,947 Total Imong-TOmDebt 1,131,021 : 1.?1,581 1,261,851 -
| |
| * lu-I r.gqq 220-*/ - 116,388 ers Aimunt'*e*tlin One Year Loag-Ter*nDeli EcRwhxli1gAfmmtDue $1,145463 :$464,46& $169,083 $1,02,579
| |
| $6,612,583 $1,130,801 $1,631,581
| |
| $966,559 $1,651,415 $934,404 $446,168 $163,131 $6:4,902 Fair Value of Lmg-TewnDebt (b) $5,815,189
| |
| - 163 -
| |
| | |
| Long-term debt as of December 31, 1998 .was:
| |
| ~atlri*ies hee~tRates From To Frn Interest Rates To Akmas Gulf States Lania. M . ws i b-kwCkiens.
| |
| 1 I __
| |
| qnxhmxb)
| |
| First Mortgge Bmds 1999 2004 6.000/ &25D% $1,640709 $25,000 $674,750 $335,959 $365,00o 2005 2010 6.500% 7.500% 428,000 215,000 9*,000 115,000 202O 2026 7.0000/9 &940% 833,237 273.287 444,950 115,000 GRBmds 2002 2026 6.625% &".0 590,000o $420,000 $170,000 Govemeal Obhio s (a) 1999 2008 5.90* o 8.5000/0 36,537 1,540 22,920 11,212 865 2009 2026 5.6000/c 9.5000/0 1,618,335 286,200 457,335 412,170 46,030 416,600 1999 2000 7.380% 7.800% 75,000 "75,000 Salt*dPkjat Saior Quit Facility, avg rate 7.139/a due 2014 " 320,485 Dmnesd Qek P1ojqe Smier Cedit Facility, avgrade 6.8%due2016 166,482 EP Edegel, Ic. Note Paale, 7.7%, due 2000 67,000 Long-Team DOE UffigptonQ(No 9) 129,891 129,891 Waterfod 3 Lease CMoienm 7.45%YQotAe 10) 353,600 353,600 Grand Gulf Law Oblighic7.02%(NiTe 10) 481,301 O1fierIng-Tc=nD*b 481,301 134,313 10,614 9,771 Lbrn dePcmlium and Discmmt - Net (23.052-Total Ing-TwnxEbt 6,851,838 1,173,379 .1,703,173 1,339,087 463,636 169,018: J335,650 L=ess AMDmt Due Wlmti One Year 255,221 1,094 71,515 6,772, 20 175,820 LIw,-TanTiDeth idmAmnt Die Vwthin One Year $6,596,617 $1,172,285 S1,631,658 $I,332,315--" $463,616 $169,018 1$,159,830 Fair Value of cIg*TemmIbt (b) $6,244,711 $1,081,52. $1,871,739 $1,059,893 $481,520 $0538 87,446 (a) Consists ofppolution control bonds, certain series of which are secured by non-interest bearing first mortgage bonds.
| |
| (b) The fair value excludes lease obligations, long-term DOE obligations, and other long-term debt and includes debt due within one year. It is determined using bid prices reported by dealer markets and by nationally recognized investment banking firms.
| |
| - 164-
| |
| | |
| obligations) and annual cash sinking fund The annual long-term debt maturities (excluding lease for the next five years are as follows:
| |
| requirements for debt outstanding as of December-31, 1999, Entergy Entergy Entergy Entergy, System Entergy pouiiana(ffl Misuissinui New Orleans Enerzy Enterzx ~sasj~If) r~a n Gulff Satc(c') (In Thouspuds)
| |
| $- 105,950 - - $ 75,000 2000 $ 1s1,17 .6 $ 220 135,000
| |
| $ 122,750 -19,700 . =
| |
| 2001 276,450 ' 70,000
| |
| $ 65,000 -
| |
| 85 150,000 94,660 2002 379,745 65,000 $ 25,000 2003 129,155 155 39,000
| |
| - 292,000 -" 1150,000 2004 442,000
| |
| $49.6 million annually, which may be (a) Not included ae-other sinking fund requirements of approximately rate of 167% of such requirements.
| |
| satisfied by cash or by certification of property additions at the
| |
| $1. million annually, which may be (b) Not included are other sinking flred requirements of approximately of such requirements.
| |
| satisfied by cash or by certification ofproperty additions at the rate of 167%
| |
| $45.7 million annually, which may be (c) Not included are other sinking fund requirements of approximatelyof 167% of such requirements.
| |
| the rate satisfied by cash or by certification of property additions:at
| |
| $2,1: million annually, which may be (d) Not included are other sinking fund requirements of approximately satisfied by cash or by certification of property additions at the rate of 167% of such requirements.
| |
| Bonds due
| |
| . n February 15, 2000, Entergy Mississippi issued $120 million of 7.75% Series First Mortgage O
| |
| $100 million of 7.72% Series First Mortgage February 15, 2003. On March 9, 2000, Entergy Arkansas issued including the Bonds due March 1, 2003. The proceeds of both issuances will be used for general corporate purposes, expenditures.
| |
| retirenent of short-term indebtedness that was incurred for working capital needs and capital EPDC maintains a credit facility of BPS100 million. ($161.5 million)for to finance the acquisition of the project, and general corporate purposes in Damhead Creek Project, assist in the financing of the Saltend distribution or transmission facilities. As of connection with the acquisition and developmentvof power generation, Approximately BPS6.8 million under this facility.
| |
| December 31, 1999, there were no cash advances outstanding cash advances was
| |
| ($10.57million) was outstanding as of December 31, 1998. .The interest raft on the outstanding of the undrawn 1999 and 19.98, regpectively. The commitment fbe is .17%
| |
| 5.88% and 6.97% as of December 31, of credit under the credit facility to amount. In addition, EPDC has BPS89.7 million ($144.9 million) of leiters support project commitments on the Saltend and Damnhead Creek lrojects.
| |
| wholly-owned subsidiary of EPDC, maintains a Saltend Cogeneration Company Limited (SCCL), an indirect providing bridge and term loan facilities, cost BPS586 million ($946.4 million) non-recourse senior credit facility (the Senior Credit credit -and guarantee facilities overrun and working capital facilities, and contingent letter of gas-fired power plant in northeast England.
| |
| Facility) to finance the construction and operation of a 1,200 MW 15-year period beginning December,31, 2000. In Borrowings under the Senior Credit Facility are repayable over a facility (the Subordinated addition, SCCL has also entered into a BPS72 million ($116.3 million) subordinated creditor August 31, 2000. The completion of construction Credit Facility) which is to be drawn down by the earlier of Senior Credit proceeds of borrowings under the Subordinated Credit Facility will be used to repay a portion of the beginning December 31, 2000. All of Facility. The Subordinated Credit Facility is repayable over a lo0year period Credit Facility.
| |
| Facility and the Subordinated the assets of SCCL are pledged as collateral under the Senior Credit
| |
| - 165-
| |
| | |
| 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 movements 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 $603.2 million. The estimated fair value of the interest rate swap agrifments, which represent the ekimnated amount SCCL would have received to terminate the swaps at December 31, 1999, was a net asset of $3.4 nfillion. 'Under the Senior Credit Facility and the Subordinated Credit FFacility, SCCL's ability to make distributions of dividends, loans, or advances to EPDC is restricted by, among other things, the requirement to pay permitted 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 beginning-December. 31; 2001., DCFL also entered 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, JThe Subordinated, Credit Facility is payable over a ten-year period beginning December 31, 2001. Pursuant to a corporate restructuring in April 1999, Damhead Finance LDC (DFLDC), an indirect wholly-owned subsidiary' of EPDC, replaced DCFL as borrower under the Senior Credit Facility and the Subordinated Credit Facilityd, All ef the 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 amajority of the project debt from the earlier of commercial operation or the date the long term interest rate for the agreed interest rate hedging strategy exceeds 8%. 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 requirementito pay 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 within the Articles 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 Entergy Corporation's subsidiaries from 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 Cavital Requirements and Financin! (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
| |
| -166-
| |
| | |
| excluding nuclear fuel) for Entergy are estimated at (including environmental expenditures and AFUDC, but totals are estimated
| |
| $1.5 billion in 2000, $1.7 billion in 2001, and $1.8 billion in 2002. Included in these and System Energy as follows:
| |
| construction expenditures for the domestic utility companies 2000 2001 2002. Total (In Millions)
| |
| $350 $248 $188 $786 Entergy Arkansas 298 269 204 771 Entergy Gulf States 202 188 162 552 Entergy Louisiana 115 122 123 360 Entergy Mississippi 50 46 45 141 Entergy New Orleans' 39 20 12 71 System Energy mainly on (i) distribution and transmission The domestic utility companies' anticipated spending is focused (ii) return to service of generation stations that have projects that will support continued reliability improvements, to a more competitive environment. Projected been held in reserve shutdown status; and (Wii)transitioning generators, which is scheduled for the third quarter construction expenditures for the replacement of ANO 2's steam during the figures above. Entergy will als0 require $1.0 billion 6f 2000, are included in Entergy Arkansas' estimated stock maturities and cash sinking fund requirements. Entergy
| |
| -period 2000W2002.to meet long-term debt and preferred generated funds and cash on hand, supplemented by plans to meet these: requirements primarily with internally facilities, and project financing. Certain domestic utility proceeds fromntthe issuance of debt,, outstanding credit or refinancing of all or a portion of certain companies and System Energy, may also continue the reacquisition See "MANAGEMENT'S FINANCIAL DISCUSSION outstanding series of preferred stock and long-term debt.
| |
| for additional discussion of Entergy's capital AND ANALYSIS - LIQUIDITY AND CAPITAL RESOURCES" spending plans.
| |
| Sales Warranties and Indemnitie (Entergy Corporation)
| |
| Entergy or its subsidiaries made certain warranties In theEntergy London and CitiPower sales transactions, and regarding litigation, accuracy of financial accounts, to the purchasers. These warranties include representations December claim on the CitiPower warranties must be given by the adequacyof existing tax provisions. Notice of a of a-claim on the Entergy million ($66 million). Notice 2000, and Entergy's potential liability is limited to A$100 must be given by December 1999, and for the tax warranties, London warranties had to be given for certain items by and BPS 140 billion ($2.3 billion) on certain tax warranties June 30, 2001. Ejitergy's liability is limited to BPS 1.4 to such notices have been received. Entergy has also agreed million ($226 million) on the remaining warranties. No 2001.
| |
| Entergy London at $700 million through June 30, maintain the net asset value of the subsidiary that sold and believes it has adequately provided for the Management periodically reviews reserve levels for these warranties 1999.
| |
| ultimate resolution of such matters as of December 31, Fuel Purchase Aereements (Entergy Arkansas and Entergy Mississippi) coal to White Bluff and Independence Entergy Arkansas has long-term contracts for the supply of low-sulfur for These contracts, which expire in 2002 and 2011, provide (which is also 25% owned by Entergy Mississippi). are satisfied coal requirements. Additional requirements approximately 85% of Entergy Arkansas' expected annual by spot market purchases.
| |
| - 167 -
| |
| | |
| (Entergy Gulf States)
| |
| Entergy Gulf States has a contract for i 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 ownership 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 for 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 ofits 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 cont .satthe project level to supply up to 100% of the -gas requirements for the Saltend ,and Danhead. Creek power pla*t located in -the UK.
| |
| Both contracts have 15-year terms and: include a take-or-pay obligation for approxinmately
| |
| .75% of the gas requirement for each plant. Under.the terms of Saltend's contract and based on its..currat coustruction schedule, Entergy's global power development business may incur certain liabilities with regard to .this gas prior to the project reaching commercial operation. The disposition of the gas will be managed under the terms of the contract, and the financial effect on the Saltend project is expected to be minimal.
| |
| Sales Azreements/Power Purchases (Entergy Gulf States)
| |
| In 1988, Entergy Gulf Statesentered into a joint venture with a primary term Qf 20 year*. with Conoco, Inc.,
| |
| Citgo Petroleum Corporation, and Vista Chemical Company (collectively the Industrial Participants),
| |
| whereby Entergy Gulf States' Nelson Units -1and 2 were sold to NISCO, a. partnership consisting of the Industrial Participants and Entergy Gulf States., The Industrial Participants supply the fuel for the. units, while Entergy Gulf States operates the units at the discretion of theIndustrial Partiipants and purchases the electricity, produced by the units. Entergy Gulf States purchased electricity from-the joint venture totaling $51.4 million in 1999,
| |
| $57.5 million in 1998, and $7.0.7 million in 1997.
| |
| (Entergy Louisiana)
| |
| Entergy Louisiana has an 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 $64.6 million in 1997. If the maximum percentage (94%) of the energy is made available to Entergy Louisiana, current production projections would require estimated 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 fi.el adjustment clause.
| |
| -168-
| |
| | |
| and System Fuels (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy ?New Orleans, System Energy)
| |
| The domestic utility companies that are owners of System Fuels have agreed to make loans to System Fuels to System Fuels as to finance its fuel procurement, delivery, and storage activities. The following loans outstanding of December 31, t999 mature in.2008:
| |
| Owner- Ownership Percentafe Loan Outstandine at December 31, 1999 Entergy Arkansas 35% $ 11.0 million Entergy Louisiana 33% $1442. million SEntergy Mississippi. 19% 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)
| |
| 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
| |
| .(currently. $200 millioqnp\ach for Entergy Arkansas, Entergy Gulf -States EntrgyLouisiana,. System-Energy, and program, Entergy's non-utility nuclear power business) and an industry assessment program. Under-the assessment the maximum payment requirement for each nuclear incident would be $88.1 million per reactor, payable at a irate of As a co
| |
| . $10 millionper licensred.retr per inpid~eot per year. Entergy has six licensed reactors, i.cludmnPilgdmt, each licensec of Grand* Gulf I with System Energy, SMEPA would bamr. 10% of this obligation. .*add*tion, in a-private insuran*e program that provides coverage for
| |
| . owner/licensee of Fntcw's si.x nuclear units participates
| |
| - worker -tort claims:-fild.for bodily infjury caused by radiation exposure. The.,program provides, fbr a maximum assessment of approximately. $18.6 million for the six. nuclear units in the eWent that losses exceed accumulated reserve funds. ---
| |
| Energy,. end Entergy's non-utility
| |
| *nuclear,
| |
| - Arkasa, Entergybusines n power are also members ofStates, Entergy.Gulf programs System insuranceLouisiana, certain,Entergy that provide 'covye.rage ,fot-property damage, plants. ýAs of including decontamination and premature decommissioning expense, to members' nuclear generating Energy were each December 31, 1999, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System is-,insured for $1.115 insured! against such losses up to $2.3 billion. Entergy's non-utility nuclear. power business; Entergy Gulf billion in property. damages for Pilgrim under these insurance programs. In, addition, Entergy Arkansas, power States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy's non-utility nuclear certain replacement power and business interruption costs business are members of an insurance program that covers damage and replacement power/business incurred dueai.%.prolonged ,fticear unit outages. Under the property interruption in .*.ance-Programs, these Entergy subsidiaries could be subject to assessments if losses exceed the possible accumulated funds available to the insurers. As of December 31, 1999, the maximum amounts of such assessments were: Entergy'Arkansas - $16.6 million; Entergy Gulf States - $14.1 million; Entergy Louisiana Energy - $12.7
| |
| $15.3 million;' Entergy Mississippi - $0.5 million; Entergy- New- Orleans - $0.3nmillion; System million, and Entergy's non-utility nuclear power business - $7.3 nmllion. 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 be used,- first;-, to render the reactor safe and stable, and second, 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.
| |
| -169-
| |
| | |
| Spent 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
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| $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 fees for all generation prior to the July 1999 purchase date. Entergy considers all costs incurred for the disposal of spent nuclear fuel, except accrued interest, to be proper components 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.
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| Delays have occurred in the DOE's program for the acceptance and disposal of spentinuclear 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:
| |
| Pending DOE acceptance and disposal of spent nuclear fuel, the owners of nuclear. plants are responsible for their own spent fuel storage. Current 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- thrtogh the replacement of the existing storage racks with .higher density storage racks.. "This expansion should provide sufficient storage for Waterford 3I until after 2010. ýAn ANO storage:ficility'using dry casks began operation in 1996 and is being expandedin 2000. Current on-site spent fuel storage capacityýat ANO, including the current expansion, is estimated ,to be sufficient until approximately 2002. -his facility may be further expanded as required: The spent fuel storagefacility at Pilgrim is'expected to provide storage capacity until approximately 2003.
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| Entergy plans to modify the facility to provide sufficient spent fuel storage capacity through approximately 2012.
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| The cost of adding additional spent fuel storage capacity as needed' at each site wilIlbe reasscssed in 2000. In December 1999, Entergy Arkansas, System zEnergy, and Entergy Gulf States issued requests for proposals for additional dry storage capacity at'ANO, Grand Gulf 1, and RivertBend, respectively.
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| Total approved decommissioning costs, for rate recovery purposes as of December 3.1; '1999, for the domestic utility companies' nuclear power .plants, excluding the co-owner share of, Grand Gulf 1, have been estimated as follows:
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| Total Estnad Approved
| |
| *emuaoun .Cossts
| |
| ' , (InMBons)
| |
| ANO 1 and ANO 2 (based an a 1998cost stud rejecti*g 1997 dollars) $ 813.1 River Bend (based oni a 1996 cost study reflegting 1996 dollars) 419,0 Waterford 3 (based m a 1994 uptated study in 1993 dollars) 320.1 Grand Gulf 1 (based cx a 1994 cost study using 1993 dollars) 365.9
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| $, 1,918.1 Decommissioning 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 millionrespectively, 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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| -170-
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| that, when added to EeryArkansas and Entergy Louisiana are authorized to recover in rates amounts estimated jnvestment income, should be sufficient to meet the above approv dc nsioning costs for ANO and Waterford 3, respectively.
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| decommissioning trust fund, which As part of the Pilgrim purchase, Boston Edison funded a $471.3 million was transferred to-Entergy's non-utility nuclear power business. After a favoiableon tax determination regarding the trust fund, Entergy returned $43.million of the trust ftnd to Boston Edison. Based cost estimates provided by an to cover future outside consultant, Entergy believes. that Pilgrim's. decommissioning fund *wil be adequate deposits to the trust decommissioning costs for the Pilgrim plant without any additional Bend decommissioning costs In th. Texas retail jurisdiction, Entergy Gulf States is recpvering in rates River a..1996 cost..study*, Entergy Gulf States included decommissionmg-,cos .of that-total $385.2 million,a base..on, costupdatean tot $562.7.millionin the PUCT rate review filed in*Novemnber
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| $513.3 million- based on 199$
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| study. n th 199g. The PUCT ordered that .EitergyGulf States continue funding at the level based on te 1996 study, in the tem", on the 1996 Lowisiana retail jurisdictio.n, Entergy Gulf States included. decom iss~koning ,based chapge was implemented.that included LPSC rate reviews filed.in May 1996,. 1997, and 199$.- In June 1996, a rate Sept=-.r ,1998, the LPSC issued an order decommissioning reven*e, requirements based o. the. 19p96 study. In .Entergy Gulf States included ac. tng the 1996 cost study:.amount of $419 million. In the May 1999.xate Mview, decomnUMssion: costs based on the 1998 update of$562. million.
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| fund $198 million (in 1989 dollars)
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| System Energy was previously recovering in rafes amounts sufficient to of its Grand Gulf I decommissioning costs. System Energy included updated decommissioning costs (based on the 1994 study) in its pending rate increase filing with F. Rtes rafuest e *..Ais proceeding were placed into effect rate case.
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| in December 1995, subject to refund. FERC has not yet issued an order in the is presently Eeryperiodically riesand updates, esiaedcomsong costs. Although.Entergy bee under-recovering for Grand G6.0 Waterford 3, and River Bend based on the above estimates, applcatons hav regiatory authorities to reflect projected decommissioning costs in
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| .andwill continue to be made to the appropriate upon market at market value based rates: The amounts recovered in rates are deposited in trust funds and reported
| |
| ..quotes or as determined by widely used picing services. These trust fund assets largely offset the accumulated decommissioning and liabilityand EntergY Loisiana, as accmuiated recorded as is recorded thatare depreciation for Entrgy .Arkansas, Entergy Gulf States, defrred creditsfor System Ener and Entergy's non-utility nuclear with the transfer of Cajun's 30%
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| power business. The liability associat*d with the trust funds received from Cajun.
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| share of River Bend is also recorded as a deferred credit by Entergy Gulf States.
| |
| in 1999 by Entergy were as The cumulative liabilities and actual decommissioning expenses recorded follows: Cumulative 1999 Cmunlative Liabilities as of 1999 Trust Deconuissioning Liabilities as of December 31. 1998 Earnings Epenses.: Oth.e December 31, 1999 (in Millons)
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| $ 253.4 $ 7.6 $ 10.7 $ - $ 271.7 ANO 1 andANO2' 5.6 7.6 - 203.5 River Bend 190.3 Watrford3 71.9 2.3 8.8 - 83.0 107.3 3.2 8.9 - 129.4M GrandGulf 1
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| - - 6.8 428.0 434.8 P.irm (1)
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| $ 622.9 $ 18.7 $ 52.8 $ 428.0 $ 1,122.4
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| - 171 -
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| | |
| (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.- Pilgrim's trust earnings are not shown as an increase to its decommissioning liability -because it is not -subject* to regulatory treatment.
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| In 1998 and 1997, ANO's decommissioning :xpense was $15.6 million and $11.3, million, respectively; River Bend's decommissioning: expense -was $3.4A -million and $8.9 'Ifiion, ,respectively; Waterford 3's decommissioning expense was $8.8 million.ink both years, 'and Grand Gulf 11,decommissioning expense was $18.9 million in both years. The actual decommissioning costs may vary 'from -the estimate because of regulatory requirements, changes in technology, and increased costs of-labor, materials, and equipment.
| |
| The EPAct contains a lrolision that assesses domestic nuclear utilities with fees for thedecontamination and decommissioning of the DOE's past-uranimn ehrichnient Operations. The decontamination and decommissioning assessments are being used to'set up a fund-intd which coneributions frimi utilities id the federal government willbe placed. Annual assessments (in 1999 dollars), which will be adjusted annually for inflationk-are for-15 years and are approximately $3.9 million for Entergy Arkansas, $1.0 million for, Entergy iGulf States, $1.5 million for Enteitgy Louisiana, and $1L6 million foa, System Energy. :DOE feAs are included in other cutrrt liabilities and other noncurrent liabilities and, as of December 3.1, 1999,'; i rded liabilities wet& $27.0 million for Entergy-'-Arkaii,
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| $4.7; million for, Entergy Gulf States, $10.3 million for ,Entetgy'Lbuisiana, and $10.0 million for Systetaergy.
| |
| These liabilities were offset in the consolidated fifiancialfstatments by regulkoryassets. FERC requires that utilities treat these assessments as costs of fuel as they are amortized and recover these costs through rates in the same manner as other fuel costs.
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| ANO Matters (Entergy Corporation and Entergy Arkiiiua)
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| Cracks in steam generator tubes at ANO 2 were discovered and repaired during an outage in March 1992.
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| Further inspections and repairs wert conducted during subsequent refueling and-imidJtycle outages, including the most recent mid-cycle outage in.Novembei .-1999. Turbine modifications were islý i- May 1997 -torestore-most of the output lost due to steam generator fouling and-tube plugging. In October 1996, the Board authorizid Enteagy Arkansas and Entergy Operatibns to. fabricatand install repl nt steam generators at'ANO 2.. Entergy Operations thereafter entered -into contracts for the design, fabrication, and installation of replacement steam generators. In December 1998, the APSC issued an order finding replacement of the ANO 2,steam genetators is in the public interest. It iVanticipated that thed:9am generators will-be installed during a planned refuein4g outage in September 2000. Entergy estimates the ýco-. of fabrication and replacei-ent of the steam generators to be approximately $150 million.
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| Environmental Issues (Entergy Gulf States)
| |
| Entergy.Gulf States has been designated as a PRP for the clean-up of certain-hazardous waste disposal sites.
| |
| Entergy Gulf States is currently negotiating with thp EPA and state authorities regarding the clean-up of these 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 States' 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 materially adversely affected by the outcome of the suits. As of December 31, 1999, a remaining provision of $19i1million existed relating to the clean-up of the remahimig sites at which Entergy Gulf States has been designated as a PRP.
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| -172-
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| (Entergy.Louisiana and Entergy New Orleans)
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| During 1993, the LDEQ issued new rules for solid waste regulation, including regulation of wastewater impoundments. Entergy Louisiana and Entergy New Orleans hae determined that certain of their power plant wastewater impoundments were ffectedb y these r6gulations and have chosen to upgrade or close them. As a result, a remaing, recorded liability in the amount of $5.9 million for Entergy Louisiana and $0.5 million for Entergy New Orles exisd at Dember 3 1999 fortwastewater up d and closures. Completion of this work is pending Ciy jrnias Odin an , 0 .Eefty New Orleans)
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| -Enitergy N Orleans provides electridcand gas service in the City' of New Orleans pursuant to franchise ordinances. These ordinances contain a continuing option for the city to purchase Entergy New Orleans' electric and gas utility properties.
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| Waterford 3 Lease Obligations (Entergy Louisiana) i.:*.in Se~ptlez 28, 1989, Entergy Louisiana entered into throee idnical t ons for the sale, and l~sbccof undiie interest (aggegating approximately 9.3%)IhWiherfiord 3. In Ji'ul 197 neg oiiana "6a the lessors to issue $307.6 mion aggregat'principa. amount of Wrrd.3 Secured Lease Obligation
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| .B" d1' 8.76% Series due 2017,.to refinance the outstandg bonds originally issued to finance the purchase of the uin*terests ,by e lessos. The lease pa
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| 'U~id~L ts we*re c to reflect the lower interest costs. Upon the ed.
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| occurrence of c era ts, Entergy Louisiana may. t bligt t pay amounts sufficdit to permit the termination tof lease tra0sactins and m*y be required to assumre the out bonds issu~ed to iane, ipart,. the lessors' l6f theu*ndivdeji.nu.re in Waterford 3. .
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| Em!DlpyMent Liiation (Entergy Corporation, Entergy Arkansas, Entergy. GulStates, Entergy Louisiana, and*ntegy &e "rlei"s)
| |
| .Entergy Corppration, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans disc dthaithe- w wr6oifiliy terminated and/or are d"f on.elawsuit anin iumerous ilmedeby basis .of age, race, sex;. Enasse'rtig employees formerdor
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| .Corporiooy ere Arkansas, Entergy.. Gulf Louisian adEntergyNew Oreans are vigorously defndd the* suits a deny any liability to Stat th p tigy Hoever, noassurance can be given as to the outcme of these cases.
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| laen.iffs*: ".'
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| Cajun - oal Conitracts (Enteigy Corporation'and Ente 'yGulfStates)
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| Entergy Gulf States filed declaratory judgment actionsi the U.S. Bankruptcy Cort in which the Cajun bankruptcy case is pending These onswere filed. seek rulings cing that Entergy Gulf States is nliable for..d ges to certain c*aslie"s a the rail and barge comipaie that transjooit t* ig Cajun 2, Unit 3 if c0n.r* werrefNJed in the"banklitcypro
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| '- their g. Collecvely, the'coal suppliers and transporters asserted clamis ind the Ca'tj baipý*c case that exceedd t,'.6billion. ln October 1999, the bankruptcy court confirmed a plan of reorganization in the bankruptcy case pursuanit6 a settlement agreement among theparties. The settlement agreement and plan of reorganization effectively release Entergy Gulf States from an'y claims asserted by the coal suppliers apd transporters for Big Cajun 2. The settlement agrreement is subject to regulatory approvals.
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| Grand Gulf 1-Related Afreements CapitalFunds Agreement (Entergy' Corporation and System Energy)
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| "Entergy Corporatin 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
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| - 173 -
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| debt), and (ii) permit the continued commercial operation of Grand Gulf 1 and pay in full all indebtedness 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 contributions to enable System Energy to make payments on sucd debt when due.
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| System Energy has entefed into agreements with Enter Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans whereby they are obligatedlto purchase their respective entitlements of capacity a.t energy from System Energy's 90% ownership and leasehold interest in Grand Gulf 1, and to make payments that, together with other available funds, are adequate to cover System Energy's operating expenses. System Energy -oulldthave to secure funds from other sources, including Entergy Corporation's obligations under the Capital Funds Age ent, to cover any shortfalls from payments received from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans under these agreements.
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| Unit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)
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| System Energy has agreed tosell all of its 90% owned and leased share of capacity and energy from Grand Gulf 1to Entergy , Enfergyouisana, Entergy Mississippi, and Entergy New Orleans in accordaznce with specified percentages (Ei&rgy A ansa-36"/, Entergy L6uisiana-14 0% Entergy Mississippi-33%, and Entergy New Orleans-17%) as orderid by FERC. Charges undeis agme are paid in consideration for the purdiasing companies' respective enti lement to receive capacity and energy and are payable irrespective of the quantit' of
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| ,yener delivered so long as the m operation. The aeemet will remain "termniatedby the partiesjand the ten on is approvedby FERC, most likely upon Grand Gulf l's retirement from service. Monthly obligations for payments under the agreement are approximately $11 million for Entergy s as,
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| $8 million for Entergy Louisiana, $19 million for Entergy Mississippi, and $10 million for Entergy New Orleans.
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| "Availability Agr eement ( rgy''Arkansas, Entergy Louisiana, Entergy Mississippi, Ewitergy. New-Orieans, and System Energy)
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| Entergy Arkansas, Entergy, Louisiana, Entergy Mississippi, and Entergy New Orleans 'are individually
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| . o_,gated to make paymtents or subord advances to System Energy in accordance with staed.percentages (Entergy Arkansas-17. 1%, Efitergy Louisiana-26.9o%, Exitergy Mississippi-31.30%, 'and Entergy New 0rleans-24.7 %)
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| in amounts that, when added to amounts receied under the Unit Power Sales Agreement or otherwise, are adequate to cover all of System Energy's operating expenses as defined, including an amount 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 security for' certain obligations. Since commercial operation of Grand Gulf 1, payments under the Unit Ppwer Sales Agreement have exceeded the amounts payable under the Availability Agreement. a ccrdinly,, no. payments under the Availability Agreement have ever been required. If Entergy Arkansas or Entergy Mississippi ais to make its Unit Power Sales Agreement payments, and System Energy is unable to obtain"fuds irom othesi'6ices, Entergy Louisiana and Entergy New Orle4ns could become subject to claims or demands by System Energy or its preditors forpayments or advances under the Availability Agreement (or the. assignments thereof) equal to the difference between their required Unit Power Sales *Agreement payments and their required Availability Agreement payments.
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| 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 the 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 I capacity and energy to Entergy Arkansas supersedes the Reallocation
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| - 174 -
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| | |
| been Agreement as it relates to Grand Gulf 1. Responsibility for any Grand Gulf 2 amortization amounts has individually allocated (Entergy Louisiana-26.23%, Entergy Mississippi43.97%, and Entergy New Orleans-29.80%)
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| Entergy under the terms of the Reallocation Agreement. However, the Reallocation Agreement does not affect the assignments referred to in the preceding paragraph.
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| Arkansas' obligation to System Energy's lenders under and Entergy Arkansas would be liable for its share of such amounts if Entergy Louisiana, Entergy Mississippi, Entergy New Orleanswere unable to meet their contractual obligations. No payments of any amortization amounts other will be required so long as amounts paid to System Energy under the Unit Power Sales Agreement, including under the Availability Agreement, which is expected to funds available to System Energy, exceed amounts required be the case for the foreseeable future.
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| Reimbursement Agreement (System Energy) and In December 1988, System Energy entered into two separate, but identical, arrangements for the sale
| |
| : 1. In connection with the equity leaseback of an approximate aggregat, 11.5% ownership interest in Grand Gulf certain funding of the sale and leaseback arrangements, letters of credit are required to be maintained to secure of amounts payable for the benefit of the equity investors by System Energy under the leases. The current letters credit are effective until March 20, 2003.
| |
| Under the provisions of a bank letter of credit reimbursement agreement, System Energy has agreed to a number of covenants ., ig to the miantenance of.cra 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 in adjusted capitalization,(defined in the..reimbursement.agreement to include certain amounts not included Energy must.maintain, with respect to each capitalization for financial statement purposes). In addition, System fiscal quarter during.the term of the reimbursement agreement, a ratio of adjusted net income to interest expense As of (calculated, in each case. as specifidd in the rýinbursement agreement) of at least 1.60 times earnings.
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| charge December 31, 1999, System Energy's equity approximated 40.57% of its adjusted capitalization, and its fixed coverage ratio for 1999 was 1.92.
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| Entergy Litigation (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Mssissippi, and Entergy New Orleas).
| |
| In addition to those cdcsged 4above, Entergy and the domestic utility companies are involved in a number of the legal proceedings and claims in the ordinary course of their business. While management is unable to predict of these matters will have a material adverse outcome of such litigation, it is not expected that the ultimate resolution effect on results of operations, cash flows, or financial condition of these entities.
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| - 175 -
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| | |
| NOTE 10. LEASES General As of December 31, 1999, Entergy had.:capital leases and non-cacelable 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:
| |
| Capital Leases Enftrgy Entergy Year Enterayv Arkamas Gulf States (in Thouands) 2000 $25,379 $9,645 2001:. 23,-6,76 .9,645 2002 19,414 9,645 ..9,720 2003 19,414 9,645 9,;720:
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| 2004 19,414 9,645 9,720 Years thdreafter -39A82 2-3,034 16,746, Minimum;lease payments 147,179 7.1,259 69,388
| |
| -Less- Amount representing interest 48,570 26,067 21,852 Present VAlue of net nminmum leaise payments $98,609 $45,192 $47,t36 Operating Leases Yeer Eeft ArImm QM(S bikýu 2000 $88,978 _$30X28 -$23,322. $9,7Z7 2001 77;,761 29,203 '20,453 4,742' 2002 60,338 A4545 16,804 4,160 2003 43,422 13,082 14,435 2,570 2004 40,173 1Z004 14,031 1,653 Years fteafter 127,346 33,618 40,073 1,973 Ninmlease paynnt $438,0181 $14Z690 $129,118 $23,825 Rental expense for Entergy's leases (excluding nuclear fuiel leases and tile Grand Gulf 1 and Waterford 3 sale and leaseback transactions) amnounted to 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
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| $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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| - 176 -
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| | |
| Nuclear Fuel Leases (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, System Energy)
| |
| As of December 31, 1999, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy each had arrangements to lease nuclear fuel in an aggregate amount up to $135.million, $85 million, $90 million, and
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| $100 million, respectively. As of December 3 1, 1999, the unrecovered cost base.of Entergy Arkansas', Entergy Gulf States', Entergy Louisiana's, and System Energy's nuclear ýfuel leases amounted to approximately. $85.7 million,
| |
| $70.8 million, $51.9 million, and $78 million, respectively. The lessors finance the acquisition and ownership of nuclear fuel through credit agreements. and the issuane, of intermediate-term notes. The credit agreements for Entergy Arkansas, Entergy Gulf States, Entergy. Louisiaaa, 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 financing 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 represents the total nuclear fuel lease payments (principal and interest) as well as the separate interest component charged to operations by the domestic utility companies and Syst*ni Energy in 1999, 1998, and 1997:
| |
| 1999 "1998 1997 Lease Lease Lease Payments Interest Payments Intereit Paments Interest (in b"on)
| |
| Entergy Arkansas $48.6 $5.6 $ý0.5 $4.9 $53.7 $6.4 Entergy Gulf States . 31.4 1.8 36A1 3.1 25.7 3.2 Entergy Louisiana 29.7 3.7 36.8 3.9 29.4 3.7 Systern FAergy 28.1 3.4 35.4 4.7 41.1 5.4 Total $137.8 $14.5 $158.8 $16.6 $149.9 $18.7 Sale and Leaseback Transactions Waterford 3 Lease Obligations (Entergy Louisiana)
| |
| In 1989, Entergy Louisiana sold and leased back 9.3% of its interest in Waterford 3 for the aggregate sum 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.
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| 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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| 177 -
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| "Financial Events" include, among other things, fildure 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 fixedtharge coverage ratio of at least 1.50 computed on a rolling 12 month basis.
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| As of December 31, 1999, Entergy Louisiana's total equity capital (including preferred 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 payments (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 2004 31,739 Years thereafter 440,690 Total 654,866 Less: Amount representing interest 324,560 Present value of net minimum lease payments $ 330,306 Grand Gulf 1 Lease Obligations (System.Energy)
| |
| 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 1/2 years. 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.
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| 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 intere&t 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;ofthelease 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 deferred asset was $104.5 million and $85.9 million as of December 31, 1999 and 1998, respectively.
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| -178-
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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 5.74,782.
| |
| Total .. 802,822 Less: Amount representing interest 337,342 Present value of net 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 Qrleans, and System Energy)
| |
| Pension Plans Entergy has two postretirement benefit plans, "Entergy Corporation Retirement Plan for Non-Bargaining Employees" and "Entergy CorporationRetirement Plan for Bargaining Employees,", covering substantially all of its cdomestic employees. The pension:plans are noncontributory and provide pension benefits that are based on employees' credited service and comp on during the final years before retirement. 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 Fntergy Enmtergy EItergy Fntergy Eziey System ergy Mwis Gulf States Louisiana Nfissis New Oreans Enegy Service cost - benefits earned duingtheperod $39,327 $8,723 $6,531 $4,948 $2,278 $997 $2,334 Interest cost on projected benelit 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 ofpnor service cost 1136 1,227 1,434 558 480 165 64 Net peion cost (incomr) $15,005 $2,287 ($6,835) ($4,981) ($1,497) $1,662 $1,195.
| |
| -179-
| |
| | |
| long Ente i EnteW
| |
| 'y onteagy E g Faterlgy Systemn Enternv Ad==nsa (ulf StAtes louisana, Misssspt New (Mlemn Ener Service cost - benefits eaned duinng the period $45,470 $7,428 $5,448 $4,148 $1,913 $818 $2,494 Interest cost on projected benefit ogion 192,132 27,919 24,564 16,845 10,362 3,020 3,265 E*pected return on assets (233,058) (31,119) (32,506) (22,526) (12,335) (2,083) (3,979)
| |
| Amortization oftransition asset (9,740) (2,336) (2,387) (2,808) (1,250) (195) (597)
| |
| Amortization of prior service cost 11,459 1,227 1,434 558 480 259 80
| |
| $3,119 ($3,447) ($3,783) ($830) $1,819 $1z263 Net pension cost (incone) $6,263 19Y7 Ente-gy EtWEEri*tg Eitergy Ererg System Ente' Arkanss Guf States Io siam lssi New Odeas Enra SMie cost - be earned diir period -$47,703 $6,937 $5,365 $3,762 $t~893 $763 V2,389 Iterest cost on pojcted bmft otgation 193,665 26,472 23,684 15,778 10,011 Z783 2942 qWected reurn on assets (220,641) (28,050) (29,119) (19,988) (11,258) (1,915) (3,480)
| |
| Anorfzatim oftlitib asset (2,546) ..(2336) (23) (2,8oe) (1,250) (195) (597)
| |
| Aw aoof pior seice cost. 4,266 1,227 1,434 558 480 259 80 Net penso cost (*on*) $22,447 ..$4,250 ($1,0C3) ($2,.98). ($124) $1,695 $1,334
| |
| -180-
| |
| | |
| The funded status of Entergy's various pension plans..as of December 31, 1999 and 1998.was (in thousands):
| |
| Th* w ta Btmgy Fbtag Thi~g *s SAdow (ifS~es 1gisim- M TubN~dcwQ z Omri~inh~dednmefit
| |
| $1,553,251 $435,638, $377,288 $261,858 $158,778 $47,881 $44,876 Samice ecog 39,327 8,723 6,531 4,948 2,277 997 2,334 104,591 29,457 24,757 17,950 1Q,810 3,296 3,017 Aduua1 (SW)OSS (126,715) (25,915) (35,000) (11,638) (9,038) (4,663) (6,294)
| |
| (80,580) (23,34%) (25,359) (14169) (9,565) (1,469) (671)
| |
| Fv*e J/asst a /19 9,727 -...
| |
| $L499,601 $424554 8348,217 $256949 $153262 , 46.042 $43262 Cm min Assets Plan
| |
| $1,791,92, $473,353 S1,65 $35463 $192,438 $28,927. $48,910 241,460 :68258:. 74,249 49,260 24,602 2,6*5. 8 ,
| |
| Adndtoummiplms 13,106 -.. -.. 1,244
| |
| .343 .,
| |
| Fairvalue ofassst 1at10I9 S123349) (-25360) ,16.168) (956 .. (L40). (671')
| |
| $1.965-178 $5i8262 $569
| |
| : 0. $389755 $207-475 831370 $56.442 Fmxisl*,m $465,577 $93,708 $215,380, $132,806 $54,213.. -($14,672). $!3,.180 (17,446) (4,671) (2,387) (5,615) (20) . (180) (2,829)
| |
| Uudo tniwhcuiaet Uhrecpizadriorsviccoo 30,092 11,,3 9,780 4,238 3,455 1,282 696 (483.741') .(13h.*i (260.266)f 12.- 06) "7 (53(747) 7.776 Q1. 495"
| |
| *ONednet (gmnOai (85.51 (L22) S79') 8.2 $142 0 (8.94 - ($5A4
| |
| - 181 -
| |
| | |
| Fn19 Thtau B*W Btw BW *k Embey A~an Wdftte hg~am Msdsii I~wOlems ED=v ChangeinftojectedBmndt Bala=at 1/1/9 $2,495,107 $381,581 $327,842 $226,254 $140317 $40,568 $35,770 Svice cost 45,470 7,428 5,448 4,148 1,913 818 2,494 192,132 27,919 24,564 16,845 10,362 3,020 3,265 AO*ei loss 142,217 41,742 45,302 29,769 15,544 5,319 "4,005
| |
| ... (161,^9) (23,Mf2 (25;868) (15,158) (9,358) (1,844) (658)
| |
| Bm ofsts a1/d Disposi&D cfsibsidwics* '1159.676) - - -:
| |
| 1Farx 12/3 IM. 1.553.251 $4350638 $7288 $261858 $15778 $47881 $44,876 hiagesinFan sds Fiirvduofas A 1/119 $3,133,232 $427,175 $454,912 $317,650 $174,434 $23,145 $40,917 Ach tual1Vof1CpJ31a5ct 472,181 67,058 76,254 54,171 27,318 2,000 8,440 72,596 '2,152 8,067 - 44 5,626 211 (16L9-" (23," (25,M6) (15,158) (9,358) (1,8," (658)
| |
| Bmefits pai avIifcnefs"&mbies (1-724.918) - - - --
| |
| Fir/aue fa*&sA2W1IM 13911-2 '-47-3353 "-8.:513365 $356663 $192438 $28927 SA910
| |
| $237,941 $37,715 $136,077 $94,805 $33,660 ($18,954) $4,034
| |
| ".!'(24,798) (7,007) (4,775) (8,423) (3,751) (376) (4,097) 32,748 12,429 V1,215 4,796 3,935 1,447 941 (23981 (6 274)" (17& 188) (87536) (33.921) 12507 (6141)
| |
| P~vq~i(=wtd) pzwsimcodt "=-36.110,(*_' 37) 6(35,671)$13.642 $77) (5.376 tf5263)
| |
| * lecis tde & moflkmx&o* El*ecity and tOG rieffveDin1 w 1998.
| |
| - 182 -
| |
| | |
| Other Postretirement Benefits Entergy also provides health care and life insurance benefits for retired employees. Substantially all domestic employees may become eligible for 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 postretirement benefits other than pensions. At January 1, 1993, the actuarially determined accumulated postretirement benefit obligation (APBO) earned by retirees and active employees was estimated to be approximately $241.4 million and $128 million for Entergy (other than Entergy Gulf States) and for Entergy Gulf States, respectively. Such obligations are being amortize over a 20-year period 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 five-year period that began JanuaryI, 1993) over a period of 15 years beginning in January 1998.
| |
| The LPSC ordered the portion of Entergy Gulf States regulated by the LPSC and Entergy Louisiana to continue the use of the pay-as-you-go method for ratemaking purposes for postretirement benefits other than pensions. However, the LPSC retains the flexibility to examine individual companies' accounting for postretirement benefits to determine if special 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:Energy fund postretirement 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 and FERC on a pay-as-you-go basis. The assets of the various postretirement 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 suibsidiaries, including amounts capitalized and deferred, included the following components (in thousands):
| |
| 1999 Entergy Entergy Entargy Entergy Entergy System Enterg Arkansas Gulf States Loisiana Mississippi New Orleans Energy Service cost - benefits earned during the period $16,950 $3,952 $3,227 $2,140 $1,009 $512 $982 Interest cost on APBO 29,467 6,596 8,206 4,234 2,167 2,69.9 631 Expected retur on assets (8,208) (1,309) (2,980) - (1,634) (1,425) (522)
| |
| Amortization of transition obligation 17,874 3,954 "5,803 2,971 1,502 2,678 222 Amortization of prior service cost 44 - 44 - -
| |
| (1,452)1 - (393) (227) (69) (616) (8)
| |
| Recogtnied net (gain)
| |
| $54,675 $13,193 $13,907 $9,118 $2,975 $3,848 $1,305 Net postretieet benefit cost
| |
| - 183 -
| |
| | |
| 1998 Entergy Entergy Entergy Enter -g SysM Entergy Arkansas Gulf States Louisiana Mississippi New Orleans Energy Service cost - benefits earned during the period $13;878 $3,325 $2,553 $1,776 3$8621 $432 $871 Interest cost on APBO 28,443 6,519 8,103 4,089 2,085 2,714 652 Expected return on assets (5,260) (215) (2,385) - (1,059) (1,155) (446)
| |
| Ain on oftransition obbli gion 17,874 3,954 5,803 2,971 1,502 Z"628 262 Am.zaton.ofpor service cost'1 44 -44 --
| |
| Recognized nqt~gain)- ;; (3,501) (1,216) (686), (4 M)7 Net pos.retirement benefit $51,478. $13,583 $12,902. $8,150 $3,26 $6, 1997 Entergy Entergy: Entery Entrgy . Fntergy System Entergy Aikansas Gulf Staes Lo.iisim :ississippi.: Now O(eans Enery Service cost - benefits earned duringthepeiod " . $13,991 '$3,204 $3,227 $2;081 $1,092 "$618 $939 Intirest co on APBO 29,317 6,22. 9,466 4,490 12,279 3,106' 648 Expected return on assets (3,386) (1,637) - (695) (840) (214)
| |
| Amortization. of transistion obligation 15,686 3,954 5,803 2,971 1,502, 2,678 262 Aiiortization of V*o service cost 44 ' - 4 -
| |
| onzed nt (gain)Ao.. 134 (238) 672 (348) , (742)
| |
| .(103) ,
| |
| Net postretireinmt benefit cost $55,786, $13,15.2 $17,575 $9,194. $4,07,4,.. $4,8,20.. $1,635 The funded status of Entergy's postretirement plans as of Decemfber. 3 1, 1,999 ;and ,1998 was (in thousands):
| |
| Entergv. -;n.*ergyr
| |
| * nte Enterav ,.Enta*y Svstezii EtrYfArkansas:. GufStates Lousiqna MssipiNew Orleans.:. Energy Change in APRO Balance at 1/1/99 $444,509 $101,856 $124,431 $63,449 $32,404 $40,838 $9,087 Service cost, 16,950 3,952 ,3*227 2,140 1,009 512 982 7
| |
| Interest cost "29,467. 6,596 -. 8,206 4,234 2,167 2,699 631 Actuarial (gain) (40,202) (10,375) (1d028) (4,924) (2,131)*' 2,098) (882)
| |
| Benefits paid (25,881) (6,373) (7,282) (3,743) (2,316) (3,588) (272)
| |
| Acquisition of subsidiary 4,929 ---
| |
| Balance at 12/31/99.' $429,772 $95,656 $118,295. $61,156 $31,133 $38,363 $9,546 Change in Plan Assets Fair value of assets at /1/99 $89,579 $11,774 $311,510 $ " $18,759 -$20,380 $7,156 Actual return on plan assets 7,134 1,278 3,103 ' 150 1,476 548 Employer contributions 43,576 15,526 11,414 3,743 3,021 "4,448 -2,117 Benefits paid (25,881) (6,373) -.(7,282) (3,743) (2,316) (3,588)--. (272)
| |
| Acquisition of subsidiary 5,800 .. -- ,
| |
| Fair value-f assets at 12/31199 $120,208 $22,205 $39,045 , $ $19,614 $23,716 $9,549 Funded status ($309,564) ($73,451) ($79,250) ($61,156) ($11,519) ($14,647) $3 Unrecognized transition obligation 149,141 51,390 75,444 38,633 19,525 34,827 2,893 Unrecognized prior service cost 335 - 335 - - -
| |
| Unrecognized net (gain) (19,374) (6,941) (24,503) (12,048) (5,117) (13,870) (3,653)
| |
| Prepaid/(accrued) postretirement benefit asset/(liability) ($179,462) ($29,002) ($27,974) ($34,571) $2,889 $6,310 ($757)
| |
| .-.184-
| |
| | |
| 1998 .Entergy System Entcr~y IAkansas Gulf States Louisiana Mississippi New Orleans Energy aiange in APBO
| |
| $427,962 $91,097 $136,228 $65,385 $33,273 $43b,8 S8,483 Balance at 1/1/98 13,878 3,325 2,553 1,-776 862 432 871 Service cost 66kda 28,443 6,519 8,103 .4,089 2,085 2,714, 652 tti6 1,322 8,005 (15,007) (3,698) (1,545) ý!(2.589) (573)
| |
| Actuarial (gain)/nss Benefits paid (27,096) (7.090) (7,446) (4,103) (2,27) (3,552) (346)
| |
| Balance at 12/31/98 ~S4 09 :$101,&56 $124,431 $63,j449 $3L2,44 $40,838 $9,087 (bainge in Plan Assets
| |
| $59,688 $ $25,696 $,, $11,807 $17,350 $4,835 Fair value of assets at 1/1/98 -
| |
| 4,616 713 1,165 405 721 Actual return on plan assets -1,612 Emiployer contributions 52,372 18,151 12,095 .4,103 7,611 6,177 1,947 (2709)1 (7,090) -(7,446); (4,103) (2,271) C3,552) (347)
| |
| Benefits paid
| |
| $31,510$ $18,759 $20,380 S7,156 Fair value ofaseat 12/ 3 1/9 8 $89,579 $11,7
| |
| ($354930) ($90,082) ($92,921) ($63,449) ($13,645) (S20.458) ($1,931)
| |
| Funded status 160,613 55,344 81,247 41,604 21,027 37,505 3,670 Unrecognized transition obligation Unrecognized priCW service cost, ~379 379 .- -
| |
| * 24.704. 3,403,, (14,186Y- (7,351) ý(4539) (1-2,337 338 lUnrecognized neti(gain)loss ý
| |
| * Prepaid/(accrued) posiretirement benefit asqet/(i~jip#Y) ($6923).($1335) ($25,4-81), (S2l229,196LA ...... 1$4?O' 51,62 The assumed health care cost trend. -sed in. measuring- th APBO of En,~g a .5 o 00 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): !. :
| |
| .1Percentage Point IncERea 1 Pereentane PointDemrase Increase inthe sum Decr~ase inthe sumn lurase~in the ofsrice cost and [)ecrease inthe of ýservice cost and AP11O interest cost -interestcost
| |
| $34,514 $,8 *($4,356)
| |
| $7,379 $1,156 ($6,261)
| |
| Entergy Arkansas ($1,064)
| |
| $10,041 $1,281 ($8,520)
| |
| Entergy Gulf States ($544)
| |
| $4,450 $657 ($3,782)
| |
| Entergy Louisiana ($263)
| |
| $2,84 ($1.5940)
| |
| Entergy Mfiossippi .<$319,
| |
| $Z,32ý9.. $249 ($2,Q12) '(1211)
| |
| Entergy New Orleans ($189)
| |
| System Energy $1,021 $233 ($845)
| |
| The, signifcant actuiarial assu'mpitioni used in deterninin the esi6nr PRO 'and -the SFAS 106 AP]3O for 1999, 1999.il *. 1998 1997 Weighted-average discount rate 7.5%. 6.75% 7.25,%
| |
| Weighted-average rate of increase in 4.6% 4.6% 4.66%
| |
| futute compensation levels Expected ldng-term rate of return 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.
| |
| 185 -
| |
| | |
| NOTE 12. DISPOSITIONS AND ACQUISITIONS (Entergy Corporation)
| |
| Business Dispositions As part of the new strategic plan adopted by Entergy in August 1998, Entergy sold several businesses during 1998, including the following:
| |
| Business Pre-tax Gain (Loss) on Sale (In Millions)
| |
| London Electricity $ 327 CitiPower (a) 38 Efficient Solutions, 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 monitoringsubsidiary, Entergy Security, Inc. a4 a minimal gain. Several telecommunication businesses were sold in June, also at small gains.
| |
| The results. of operations 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), Gain on sale of assets - net" in that statement.
| |
| Asset Acquisition r.
| |
| On July 13, 1999, Entergy's non-utility nuclear p6wer businds acquired the 670 MW Pilgrim Nuclear Station lo t 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 fund, which was transferred to an Entergy subsidiary. Based on a favorable tax determination' regarding the trust fund, Entergy returned $43 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, System Energy, and Entergy Power (in the case of Entergy Arkansas) under rate schedules filed with FERC. In addition, the domestic utility companies and System Energy purchase fuel from System Fuels; receive management, technical, advisory, :operating, and 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.
| |
| -186-
| |
| | |
| The tables below contain the various affiliate transactions among the domestic utility companies and System Entergy (in millions).
| |
| Intercompany Revenues Entergy Entergy Entergy Entergy Entergy System is ArkadM 'Gulf States LouiSiana Mississioui New Orleans EnerEv 1.999 . $189.2 $38.4 $27.3 $68.3 $14.2 $620.0 1998 $162.0 $16.7 $16.7 $88.3 $11.0 $602.4-:
| |
| 1997 $230.8 $15.9 $3.4 :$85.5 $11.1. $633.7 Wtercompany Overatinz Expenses Entergy Entergy Entergy Entergy.. Entergy System .
| |
| Arkansas Gulf State Louisiana Mississipni New Orleans Enerev 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
| |
| -997 . $335.0V $41.6.4 .$326.7 .$3i6.1 $177.1 $36.5 (1) IncludeS 15.8 million in!1999, $18.8 million in 1998, and $16.5 million in 1997 for power purchksed from Operatin g .tenses Paid or Reimbursed to Entergy Operations ,.
| |
| Entergy Entergy .Entergy System Arkansas Gulf States Louisiana Enere 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, Entergy 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 natural gas utility service in portions of Louisiana. Entergy's power marketing and tading 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.
| |
| -187-
| |
| | |
| Entergy's segment financial information is as follows (in thousands):
| |
| untyandk MVof
| |
| __ _AI OW gkmaimiu Cbmwdid~e
| |
| $6,14,623 $2,249,274 $i $ $143, $8,773,228 OpmCnge y 17075 411,519 , (719) 208875 Fu&gas i :forresl -
| |
| 2,442,484 693,202 V771,128 (21,86 Pmxhwdpow 76,057 Nu1dker &igota*s 76,057 -
| |
| 1,405,M8 66,383 - " 247M250 (1396) 1,705,545 O r auficn&nuiiL 32,192 - 5;212 . 7,475 744,869 cp anxiii&**c-tii` -
| |
| 334,834 682 3,768 339,284 TwcsdliJx ilXIXC ydw s 8,113 - - .iwcg . . . 8,113 122347 122,34 AnutL Ofrjecbals ---
| |
| Tctabl cpimgtqomss 5,044,018 22.954,924 - . 258,493. 7,521,574 1,3/4605 (5,650) (115,31 2046 1,251,654 qOxvgtzrw (LMs) --
| |
| 2Z006 20,592 555,601 bt QWSs 536,543 --
| |
| 904,973 (3,719) 50,439 - 951,693 hxn 'dlIaxhrTaxgs 356,667
| |
| *maream
| |
| $553,525
| |
| _n_(1ms) ($499 $ - $41,992 $ $595,026
| |
| $18,956,750 $460,063 $ . - $ - $3,762,115 $ (193,841) 822,8,097 Tctal asds
| |
| -188-
| |
| | |
| rqtj.~ I.ý 00c fitI 4,
| |
| 00 I I II 0
| |
| .t 11 II ISI I 00IJ0i I 4, 1i
| |
| 'I IN
| |
| | |
| PONM Dwniiym Muiwft sysam amd Ehac T ng Lfjwdm* CaGlovw* All Ober* Cjjojij L997
| |
| $6,731,872 $493,10M $1,847,042 $342,959 $180,360 ($.M409). $9,53A926 Frd &gsparch fr resale 1,634,887 42,154 - --- - 1,677,041 605,634 390,125 1,222,034 129,744 (28,726) . 2,318,811 73,857 - - - - 73,857 "OtwTeration &nrnit 1,279,112 35,003 316,833 54,516 207,342 (6,657). 1,886,149 1cc, anut &,innx 765,597 4,789 121,365 32,702 55,555 -7
| |
| * 980,008 Taxes dhawltinmum 326,352 938 - 35,653 2,496 365,439 Atmt cfdatoyalfs (18,545) -- ... ...... (1 -45) 421,803 -.- ....- 421,803
| |
| -75,068,697 473,009 1,660,232 252615 -265,393 (35,3)! 7,7045 Amt of *ue Tdals op~matingbMICai) 1,643,175 20,093 186,810 90,44 (85,033) (21,026) 1,834,363 (245,439) 2476 '21,525 45 2,517 19,025 (199,851) 583,613 91 178,647 69,011 .32,911 (2,001) 862,272 m, B*Taxes 814,123 22,478 29,688 21,378. (115,4.2) - 772,240
| |
| ,2,42 " 8,318 177,023 224 (33,356) 471,341
| |
| $517,691 $14,160 ($147,335): ($1_54 ($82,071) $ - $300,899 Totalassts $20,114,594 $ 354,694 $ 4,4(8,625 $1,068,564 $1,093,783 $ (34,50) $ 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 for 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 910,408 465,094 2,904,721 Consolidated $ 15.500.754 $15,328.582 $ 18-132,8U
| |
| -190-
| |
| | |
| NOTE 15. RISK MANAGEMENT AND FAIR VALUES (Entergy Corporation)
| |
| Commodity Derivatives "Entergyuses 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 that %limitits exposure to market risk and require daily reporting to management of potential financial exposure. These policies includestatistical risk tolerance limits using historical price movenents. to calculate a value at risk measurement., The weighted-awerage lfb of the business' commodity risk portfolio was less than 18 months at December 31, 1999 and less than 12 months at December 31, 1998.
| |
| At December 31, 1999 and 1998, the power marketing and trading business had outstanding absolute notional ,¢ontriat quantities as follows (power volumes in thousands of megawatt hours, natural gas volumes in thousands of British thermal units):
| |
| 1999 19989 Energy Commodities:
| |
| Power 9,627 33,682 Natural gas 728,560 1,209,791 ....
| |
| SMarket. risk is the potential loss that Entergy may incur as a result of changes. in the market or fair value of a particular instrument or commodity., All financial and commodity-related instruments, including derivatives, are subject. to market risk. Entergy's exposure to market risk is; deternined by a number of factors, including the size, duration, composition, and diversification of positions held, as- well as market volatility and liquidity. For instrumnts such as *options;tAh time period during which the: option may -be exercised and the relationship between the current level of market,price of the underlying instrument'and the option's contractual strike or exercise-price also affect the 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
| |
| :,objectives.,:,:. .
| |
| the The New York Mercantile Exchange (Exchange) guarantees futures and option contracts traded on 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 Exchange-traded 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 receivablesf are generally not -collateralized. However, Entergy analyzes customers' credit positions prior to extending credit, establishes credit limits, and monitors the appropriateness of these limits on an ongoing basis.
| |
| "FairValues Commodity Instruments Fair value estimates of the power marketing and trading business' commodity instruments are made at discrete "points.time:,based
| |
| -. ozi relevant market information. -These estimates, may be subjective in nature and involve
| |
| ,uncertainties and' matterg.of significant judgment; therefore, actual results may differ from these estimates.
| |
| At December 31, 1999 and 1998, the fair; values!of the power marketing and trading business' energy-related commodity contracts used for trading purposes were as follows:
| |
| ____,___:_._.,." _.1999. 1998,.
| |
| Assets Liabilities. Assets Liabilities (In Thousands)
| |
| Commodity Instruments:
| |
| Natural Gasw.$ 43,542 $ 39,361 $ 150,130 $ 150,311 Electricity $ 185,575 $ 130,209 $ 147,363 $ 119,891 Financial Instrument.'
| |
| The estimatedfair value of Entergy's financial instruments is determined using bid prices reported by dealer markets and by nationally recognized investment banking firms. ::.The estimated fair value of derivative fmancial instrumets is based' on market quotes,oi the applicable interest rates,- Considerable judgment is- required in developing the estimates of fair value. Therefore, estinmtes are not necessarily indicative of th* amounts that Entergy could: realize ina current. -market exchange. In addition,, gains or losses realized on financialinstmments held by regulated- busindssesimay -be reflected in future rates and therefore dO not accrue to the benefit or. detriment of
| |
| ..stocholders.
| |
| Entergy considers the scarrying amounts of financial instruments classified as current assets and liabilities to "be 4 rdawonable estimate oflwthi fair value because of the short maturity of these instruments. In addition; Entergy
| |
| * doed not expect thatperformance 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 relatedparty nature of these commitments and guarantees, determination of fair value is not considered practicable. Additional
| |
| , inforrhation regarding financial instrumints and their fair values is included in Notes 4, 5, 6, and 7 to the financial S"statemlents,*..',--
| |
| - 192 -
| |
| | |
| NOTE 16. QUARTERLY FINANCIAL i DATA (UNAUDITED) (Entergy ýCorporation,.- Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy) 7*
| |
| The business of the domestic utility companies and System Energy is subject to seasonal fluctuations with the peak periods occurring during the third quarter. Operating results for the four quarters of 1999 and 199$.were:
| |
| Operatin! Revenue Entergy Entergy Entergy Entergy Entergylns t Entera Arkansas Gulf States LOuisiana M~ssissivvi New Oeas Eneru!
| |
| (In Thousands) 1999:
| |
| First Quarter $1,639,922 S311,969 $ 423,819 S 352,135 182,443 $ 106,056 $ 140,617 387,191 546,543 505,601 194,637 121,287 159*,5 Second Quarter 2,316,404 488,801 676,076 576,956 267,159 163,140 163,801 Third Quarter 3,064,535 480,770 371,902 188,580 117,305 156,109 Fourth Quarter 1,752,367 353,933 1998: $ 148,606
| |
| $2,313,092 $ 329,789 $ 457,509 $ 356,038 205,017 $ 113,663 First Quarter 144,336 2,508,814 391,357 423,655 424,115 268,908 125,106 Second Quarter 152,083 4,587,447 527,059 609,362 537,632 324,784 165,808 Third Quarter 109,173 157,348 2,085,419 360,493 363,283 393,123 177,591 Fourth Quarter Operating Income Entergy Entergy Entergy Entergy Entergy System Gulf States Louisiana Mississivni New Orleans ur Enterry Arkansas (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 61,586 179,278 20,630 22,089 68,695 Second Quarter 363,951 60,212 113,570 160,784 172,052 42,519 28,622 71,199 Third Quarter 597,595 69,705 (10,541) 37,596 2,823 12,716 (8,924)
| |
| Fourth Quarter 86,673 1998: $ 71,959
| |
| $ 285,507 S 27,254 $ 63,661 $ 55,222 $ 15,382 $ 1,891 first Quarter 55,721 15,468 72,177 Second Quarter 472,710 83,837 31,530 114,540 140,837 166,403 164,393 54,028 20,210 68,772 Third Quarter 590,673 2,887 (25,940) 68,726 (571) 1,490 69,735 Fourth Quarter 162,965 Net Income (Loss)
| |
| Entergy Entergy Entergy Entergy Entergy System Louisiana Mississippi New Orleans Eee Enterey Arkansas Gulf States (In Thousands) 1999:
| |
| First Quarter S 72,906 $ 11,011 S 13,437 S 21,487 S 3,015 S (1,535) $ 700 28,929 17,022 93,371 8,222 11,695 29,483 Second Quarter 209,758 58,021 80,921 88,680 23,212 15,581 24,042 Third Quarter 296,158 (28,648) 13,620 (11,768) 7,139 (6,780) 28,147 Fourth Quarter 16,204 1998:
| |
| $ 60,054 $ 5,623 $ 14,756 $ 13,917 $ 5,194 $ (902) $ 24,587 First Quarter 24,779 215,979 39,967 (5,241) 49,546 29,514 6,577 Second Quarter 25,139 262,596 73,731 78,313 81,470 29,319 10,258 Third Quarter 31,971 247,000 (8,370) (41,435) 34,554 (1,389) 204 Fourth Quarter
| |
| - 193 -
| |
| | |
| Eainintisner Averase Common Share (Entergy Corporation) 1999 1998 Basic and Diluted Basic and Diluted Fitti Quarter * $* 0.25 1$ 0.20 Second Quarter $ 0.81 $ 0.83
| |
| $ 1.16 $ 1.01 TIWirdQuarter Fougo~ Quarter $ ,0.96
| |
| - 194 -
| |
| | |
| Item 9. Chanes In and Disagreements 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 IH Item 10. Directors and, Executive Officers of the Retustrants (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)
| |
| All officers and directors listed below held the specified positions with their respective companies as of the date of filing this report.
| |
| Name Age- Position Period ENTERGY ARKANSAS, INC.
| |
| Directors Thomas I. Wright 53 President and Chief Executive Officer of Enterg Arkansas 1999-Present 1999-Present Director of Entergy Arkansas 1998-1999 Mian g Director of London Elect*ictyiEngland 1996-1998; Chaiman, CEO and Director of CitiPower Pty. Australia 1994-1996 Vice President Transmission and Distribution System of Entergy Services 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 I.
| |
| Officers Cecil L. Alexander 64 Vice President - State Governmental Affairs of Entergy Arkansas 1991-Present 1998-Present C. Gary Clary 55 Senior Vice President - Human Resources and Administration of Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans 1997-1998 Vice President - Human Resources and Administration of Entergy Arkansas, Entergy Gulf States, Entergy Louisana, Entergy Mississippi, and Entergy New Orleans 1993-1996 Director-System Human Resources of Entergy Services Frank F. Gallaher See information under the Entergy Corporation Officers Section in Part I.
| |
| Joseph T. Henderson See information inder the Entergy Corporatni Officers Section in Part L Nathan E. Langston See information under the Entergy Corporation Officers Section in Part L Steven C. McNeal See information wider the Entergy Corporation Officers Section in Part I.
| |
| Michael G. Thompson See information under the Entergy Corporation Officers Section in Part I.
| |
| C. John Wilder See information under the Entergy Corporation Officers Section in Part I.
| |
| Thomas J. Wright See infoiation under the Enterg 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 1995-1997 Director - Eastern Region of Entergy Services 1994-1995 Director - Southern Region of Entergy Services Donald C. Hintz See information under the Entergy Corporation Officers Section in Part I.
| |
| Jerry D. Jackson See information under the Entergy Corporation Officers Section in Part I.
| |
| C. John Wilder See information under the Entergy Corporation Officers Section in Part I.
| |
| - 195 -
| |
| | |
| Name Name ~~~PosionPro Zukd Officers James D.Bruno 60 Vice President - Region of Entergy Louisiana. and Entergy Gulf States 1999-Present Vice President of Customer Service of Entergy Louisiana and Entergy 1998-1999 Gulf States Vice Prdsideilt of Cu~stomer Service of Eatergy Louisiana and Entergy 1994-10998 New Orleans Vice President - Metro Region of Eutergy Services 1993-1994 Murphy A- Dreher 47 Vic~e President-. Stae Governmental Affawsn of Entergy*Gulf States -LA 1999-Present and ttergytLouisian Legislative Executive - Governmental Afflairs of Entergy Gulf States 1995-1 998 Director of Governmental Affairs of Entergy Gulf States 1993-1995 Randall W. Helmick 45 Vice President of Operations - Louisiana 1998-Present Director of Special Projects of London Electricity 1997-1999 Diretor of Reliability of Entergy Services 1997 Director of Operations and Engineering of Entergy Services I. Parker McCollough 48 Vice President - State Governmental Affairs of Entergy Gulf States - IX 1996-Prese nt Vice President - Governmental Affairs, Texas Association ofRealtors 1993-1996 (trade association)
| |
| C. Gary Clary See ifnibiiattionunder the Entergy Arkansas Officers.Section above.
| |
| Joseph F. Domino See information under the Entergy Gulf States Directors Section above.
| |
| Frank F. G3allaher See information -underthe Entergy Corporation Officers. Sect~ion in Part L Joseph T. Henderson See information under the.Entergy Corporation Officers Section in Part L Jerry D. Jackson See informnation nnder the EntergyCorporation Officers Section in Part L Nathan E. Langston See information under the Entergy Corporation Officers Section in Part L Steven C.McNeal See informiation under the Entergy Corporation Officers Section in Part L Michael G. Thompson See information under the Entergy Corporation Officers Section in Part I C. John Wilder See information under the Entergy Corporation Officers Section in Part L ENTERGY LOUJISIANA, INC.
| |
| Directors Donald C.Hintz See information under the Entergy Corporation Officers Section in Part L Jerry D. Jackson See informiation under the Entergy Corporation Officers Section in Part I.
| |
| C.John Wilder See information un~der the' Entergy Corporation Officers Section in Part L Officers James D.Bruno See infdrmnatibn under the Entergy Golf States Officers Section above.
| |
| C.Gary Clary See inlbmtd under the Entergy Arkansas Officers Section above.
| |
| Murphy A. Dreher See information, undier the Entergy Gulf States Officers Section above.
| |
| Frank F. Gallaher See informa utidl der the Entergy Corporation Officers Section in Part I.
| |
| Randall W. Helmick See information under the Entergy Gulf States Officers Section above.
| |
| Joseph T. Henderson See inflormation under the Entergy Corporation'Offi'cers* Sectio.nin Part L Jerry D. Jackson See information under the Entergy Corporation Officers Section in Part I Nathan E. Langston See information under the Entergy Corporation Officers Section -inPart L.
| |
| Steven C. McNeal See information under the Entergy Corporation Officers Section in Part 1.
| |
| Michael G. Thompson See information under the Entergy Corporation Officers Section in Part I.
| |
| C. John Wilder See information under the Entergy Corporation Officers Section in Part I ENTERGY MISSISSIPPI, INC.
| |
| Directors Carolyn C.Shanks 38 President and Chief Executive Officer of Entergy Mississippi 1999-Present
| |
| -196-
| |
| | |
| Position Period Name A~e 1999-Present Director ofEntergy Mississippi 1997-1999 Vice President of Finance and Administration of Entergy Mississippi 1994-1997 Director of Business Services of Entergy Operations Donald C. Hintz See information under the Entergy Corporation Officers Section in Part I.
| |
| C. John Wilder See information under the Entergy Corporation Officers Section in Part I Officers 1987-Present Bill F. Cossar 61 Vice President - State Governmental Affairs of Entergy Mississippi C. Gary Clary See information under the EntergyArkansas Officem Section above.
| |
| Frank F. Gallaher See information under the Entergy Corporation Offlnds Section in Part I Joseph T. Henderson See information under thnEntergy Corporation Officers Section in Part I Nathan E. Langston See information under the Entergy Corporation Officers Section in Part I Steven C. McNeal See information under the Entergy Corporation Officers Section in Part L above.
| |
| See inf6rmation under the Entergy Mississippi DirectorsSm.tion CarQlyn.C. Shanks See information under the Entergy Corporation Officers Section in Part t Michael G. Thompson See information under the Entergy Corporation Officers Part I C. John Wilder FNTERGY NEW ORLEANS, INC.
| |
| Directors
| |
| ,52 Chief Executive Officer of Entergy New Orleans - LA 1998-Presert Daniel F. NO=-k 1997-Prespt Presidentand Director of EntergtNew Orleans 1996-1997, State President - City of New Orleans 1994-1996 Vice President - Regulatory and Governmental Affairs of Entergy New Orleans 1991-1994 cnerdl Manager - Plant Operations at Waterford 3 Donald C. Hintz See information under the Entergy Corporation Officers Section in Part L C. John Wilder See informationunder the Efitergy Corportmid OGcers Section in Part L 1998-Present Elaine Coleman 50 Vice President External Affairs 'ofEntergy New Orleans - LA "1998 Director of Customer Service ofEntergy Services 1995-1998 Lead Customer Service Manager of Entergy Services 1993-1995
| |
| ' "Managrof Employee Commmci o of Entergy Serlices*
| |
| C. Gary Clary See information under the Entr Arkans* s Offiter *section above:
| |
| Frank F. Gallaher See information under the Entergy Corporation Officers Section in Part I.
| |
| Joseph T. Henderson See informatida under the EntergyCorporation Officers Section in Part I.
| |
| Nathan E. Langston See information under the Entergy Corporation Officers Section in Part I.
| |
| Steven C..*cNeel See infobrmticgpder the Entergy CorporationOfficers Section in Part.L Daniel F. Packer . .Seeifmf the Entergy New OrleansDirectors Section above.
| |
| .tiounde Seeinforniation =der th Entergy Corporation Officers Section in Part I.
| |
| : c. John Wilder See information under the Entergy corporation Officers Section in Part L SYSTIMINERGY RESOURCES, INC.
| |
| Directors 1999-Present Jerry W. Yelverton 55 Director, President and Chief Executive Officer of System Energy 1997-1998 Senior Vice President of Nuclear of Entergy Services 1996-1998 Executive Vice President and Chief Operating Officer of Entergy Operations 1992-1996 Vice President of Operations of ANO In addition, Mr. Yelverton is an executive officer and/or director of various other wholly owned subsidiaries of Entergy Corporation and its operating companies.
| |
| - 197 -
| |
| | |
| Name Position Period.:
| |
| Donald C. John C. eintz Wilder See See information information under under the the Entergy Entergy Corporation Corporation officers Officers section Section in in part Part L e Officers Joseph L. Blount 53 Secretary of System Energy and Entergy Operations 1991-Present Vice President Legal and External Affairs of Entergy Operations 1990-1993 .1 Joseph T. Henderson See information under the Entergy Corporation Officers Section in Part L Nathan E. Langston See informtion under the Entergy Corporation Officers Section in Part:L Steven C. McNeal See infonmatioa under the Entergy Corporation Officers Semtion in Part L.
| |
| C. John Wilder See information under the Entergy Corporation Officers Section in Part L Jerry W. Yelverton See information under the System Energy Directors section above.
| |
| 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.
| |
| Section 16(a) Beneficial Ownership Reporting Compliance Information called for by this item concerning the directors and officers of Entergy Corporation is seforh in the Proxy Statement of Entergy Corporation to be filed in connection with its Annual Meeting of Stockholders to be hiId" on May 12, 2000, under the heading "Section 16(a) Beneficial Ownership Reporting Compliance", which infomiation 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 the headings "Executive Compensation Tables", "General Information About Nominees", and "Director Compensation", which infortn is incorporated herein by reference.
| |
| ENTERGY ARKANSAS, ENTERGY GULF STATES, ENTERGY LOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, AND SYSTEM ENERGY Summary:Compensation Table:
| |
| The following table includes the Chief Executive Officer and the four other most highly donipensated executive officers in office as of December 31, 1999 at Entergy Arkansk, Etntergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy (cil1ectively, the "Named Executive Officers").
| |
| This detennination was based on total annual base salary and bonuses from all Entergy sources eariedby each officer for the year 1999. See Item 10, "Directors and Executive Officers of the Registrants," for info0matiqn on the principal positions of the Named Executive Officers in the table below.
| |
| - 198-
| |
| | |
| 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 companies.
| |
| Because it would be impracticable to allocate such officers' salaries among the various companies, the table below includes the aggregate compensation paid by all Entergy compaimes.
| |
| "Lon-Term Commnsation Annual Compensation Awards Restricted Securitiks (a)
| |
| Stock Underlying All Other Other Annual Compensation Compensation Awards Options Name Salary ,Bonus
| |
| $ 8,012 1999. S 193,423e $ 0. (b) 28,025 shares C.GmryClKY $254,080 (b) 1,250 5,017 1998 226,662 16.8,089 9,959 2,500 5,122 1997 170,731 36,086 .23,072 (b) 2,698 0 shares S 1,305,083 S 53,506 S 11,815 $ (b)
| |
| John J. Cordaro (d) 1999 1,250 5,833 1998 227,556 67,211 .45,209.
| |
| 2,500 6,192 206,4t0 0 37,986:.
| |
| 1997 (b)
| |
| $ 7,072 (b) 13,487 shares 3 6,838
| |
| *ibsepht; D&nino 1999 $ ý223,569 $ 200,210 0 5,409 CE6-Entegy Gaff States-TX 1998 164,011 39,492 4,5580 "(b)" -0 0 1997 138,374 0 16,205
| |
| . 303,855 (b). 39,500 shares $ 13,545 Frank F. Gallaher 1999 $401,161 S 38,496 .2,500 12,396 1998 382,829 280,747 89,07 . ., (b), . -
| |
| 5,000 9,822 1997 327,385 0 11,132 S 21,983 1999 S22,115: .$201,100 $ .36,004 .(b) !7500 shares Joseph T. Henderson Jerxy D. Jackson : S 15,497 1999 $442,80* -,$403,554 S 39,670 ýb94,000 shares 2,500 13,849 1998 409,456 348,156 59.616. 10,262 "56,359 (b) 5;000 CE0,1Eteigy Gulf States-LA 1997 `342,077 0 3,785 (b) S144,801 1999 $144,017 $ 85,544 S 16,750 shares R. Drake eith (d) 67,239 .10,259 1998 .289,145. 165,582 o)ý "-9,2 92
| |
| :1997 276,728 0 41,230 S 4,800 1999* $193,462 5178400 S 23,613 (b):
| |
| Nathan E.Langston, 5,243 1998. 158,563 . 111,125' 21,953 (b)
| |
| !.7,46:* :* 0 1997 . 131,660 10,504.
| |
| .0 S 4,800
| |
| $ 78.,100 S 0 Steven C. McNeal ' 1999 $171,077 5,145 1998 154,721 4,432' (b)
| |
| (b) 0 1997- 122,474 9,818 14,237.
| |
| $ 1,198,504 884,552 S 27,682 16,750.s.Auks Donald E. Meiners (d) 1999 $180,342 (b) 1,250 9,388 1998 268,345 "148,734 60,353 33,748-" 7,662 0 2,500 1997 255,410 (b) $ 6,583
| |
| $127,920 S 10,517 16,7500. shares Daniel F. Packer 1999 $211,055 4,018 4998 170,326 .123,513 54,208(e) (b) 0 CEO-Entergy New oleans 3,028 1997 .147,077 "0 96,097(e) .0 "11,050Shares $ 4,800 1999 $:208,931 $133,950 "S2;549 (b)
| |
| (b)
| |
| Carolyn C. Shanks 3,901 0 4,340 1998 144,798 41,394 CEO-Entergy Mississippi 3,267 1997 118,124 1,110 14,841 (b)
| |
| $254,910 28,700 shares $ 11,280 Michael G.Thompson 1999 $336,378 S 53,407 $60,874(bX.) 10,091 283,935 25,200 2,500 1998 309,958 (b) 7,729 0 12,856 5,000 1997 259,315
| |
| $119,878 $ 20,035 C. John Wilder 1999 $445,191 $406,693 (b) 52,500 shares 7,255 $758,560(bXc) 0 3,300 1998 201,413 513,106
| |
| - 199 -
| |
| | |
| Thomas J. Wright 1999 $263,120 $225,458 $ 159,653(e) (b) 18,999 shares $,,:2,356 CEO-Entergy Arkansas 1998 234,361 757,045(f) 519,610(e) (b) 0 10,833 1997 -210,070 89,232 279;188(e) (b) , .. 0, . 6,102 Jerry W. Yelverton 1999 $363,997 $328,500 $ 8,036 (b) 4940 bes 4 $ 11,86 CEO-System Energy 1998 282,410 18,959 22,(98 :(b) 1,50 8,886 1997, 227,928 0 19,143 (b) 2,500 6,954 (a) Includes the following:
| |
| (1) 1-999 benefit accruals underthie Defined Contribution- Restoration Plan as follows: Mr. Clary
| |
| $3,212; Mr. Cordaro $638; Mr. Domino $2,038; Mr. Gallaher $8,745; Mr. Henderbh $1;866; Mr. Jackson $10,697; Mr. Keith $273; Mr.MXeifers $457; Mr. Packer $1,783; Mr. Thompson
| |
| $6,480; Mr. Wilder $8,832; Mr. Wright $164;'and Mr. Yelverton $6,486.
| |
| (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 O4,800; Mr. flenderson $40; Mr. Jackson
| |
| .$4,800; Mr. Keith $3,187; Mr. Langston $4,800; Mr. M4c-a. $4,800; Mr. Memeirs .$*4,26;,Mr.
| |
| Packer $4,800, Ms. Shanks $4,800; Mr. Thompson $4,800; Mr. Wilder. $4,.4 M -, .Wright
| |
| $5,810; and Mr. Yelverton $4,800.
| |
| (3) 199. reimbursements for moving expenses as*follows: Henderson $20,077, Mr. VWilder
| |
| $6,803, and Mr. Wright $26,382.
| |
| (4) :1999 payments to retired Named Executive Officers uiider-the xecutive pensiowhplaxis were as follows: Mr. Cordaro and Mr. Meiners received lu.mp. sum paym.qnts under the Post Retirement Plan and Pension Equalizasion Plan totaling $1,302,974 and $1,169,071 ,esp yefs ,$r.
| |
| Meiners also received $24,713 from the Defined Contribution Restorati.Plt, Mr. Keith received payments under the Post Retirement Plan and the Pension Equalization Plan of $141,341.
| |
| (b) There wer no restrice'd stock awards in 1999 under'the EquityOwnership Plan. At December 31, 1999, the number and value of the aggregate restricted stock holdings werie as follows: Mr. Clary 12,945 shares,
| |
| $333,334; Mr. Cordaro 1,626 shares, $41,870; Mr. Domino 3,002 shares;,$77,302; Mrh..Ciallaher .7497 shares, $193,048; Mr. Henderson 3,948 shares, $101,661; Mr.. Jadmson '27,000 shares, $695,250; Mr.
| |
| Keith 1,992 shares, $51,294; Mr. fngston 3,380 shares, $87,035; Mr. Meiners 2,243 shares, $57,757; Mr. Packer 4,500 shares, $115,875; Ms.-Shanks 2,382..shares, $61,337; Mr. ThompsoA. 1,,834 shares,
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| $381076; Mr. Wilder:39,111 sharep,.$1,007,108; Mr. Wright 4,500 shares, $115,875; and Mr. Yelverton 11,505 shares, $296,254. Accumulated dividends are paid on restricted stock when vested. No restrictions were lifted in 1999, 1998, and 1997 under the Equity Ownership Plan. The value of restricted stock holdings as of Decebar 31, 1999 is determined by midtiplyug te totae number ofis hddby the closing market price of Entergy Corporation common stock on. the New York Stock Exchange Composite Transactions on December 31, 1999 ($25.75 per share).
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| "(c) In addition to the restricted sharesgranted under the Long Term Inceftive Plan"'Mir Wilder and Mr.
| |
| Thompson were granted 26,000 and 2,000 additional restricted shares, respectively. Restricted shares awar ed will vest incrementally 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. Thompson may realize is dependent upon both the number of shares that vest and the fiture market price of Entergy Corporation common stock. Accumulated dividends will not be paid on 21,000 shares of Mr.. Wilder's resicte stock wheni vested. Accumulated dividends will be.paid on 5,000 shares of Mr. Wilder's restricted stock and all.of Mr. Thompson's restricted stock when vested.
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| - 200 -
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| | |
| (d) Mr. Cordaro is the former Chief Executive Officer of Entergy Gulf States, LA andEntergy Louisiana. Mr.
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| Keith is the former Chief Executive Officer of Entergy Arkansas. Mr. Meimers is the former Chief Executive-Officer of Entergy Mississippi.
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| (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 rdated to various overseas living expenses associat6d wim"Mr. Wright's assignments in London and Australia.
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| (f) Includes approximately $596,000 of perfor ce bonus for service years 1996-1998. A portion of the bonus was paid during 1999 with the remaining amount to be paid in 2000.
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| Option Grants in 1999 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 such officer.
| |
| Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy Individual Grants *I PotentialRealizable
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| % of Total Value Number of Options at Assumed Annual
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| . ecurlties Granted to Exercise .Rates of Stqc ,
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| Underlying]Employees Price Price Ap.predAtion Options in (per Expiration for oytlont Termwe 1999 shareb (a) Date 5% 10%
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| Name Granted (a) 28,025 (a) .0.5% $ 29.9375 1/28/09 S 527,642 $1,337,147 C. Gary Clary 13,487 (a) 0.3% 29.9375 1/28/09 253,928 643,503 Joseph F. Domino 39.500 (a) 0.7% 29.9375 1/28/09 743,688 1,884,650 Frank F. Gallaher 0.1% '2828750 3/08/09 136,195 ,.345,145 "J-ieTH eci:derson,500(b) 4,484~991 Jeny D. Jackson 94,000 (a) 1.8% 29.9375 1/28/09 1,769,788 16,750 (a) 0.3% 29.9375 1/28/09 315,361 799,187 R. Drake Keith 15,400 (a) 0.3% 29.9375 1/28/09 289,944 734,775 Nathan E. Langston 5,925 (a) 0.1% 29.0*75 1128109 111,562 282,719 Steven C. McNeal 16,750 (a) 0.3% 29.9375 1U28109 315,361 799,187 Donald E. Meiners 16,750 (a) 0.3% 29.9375 1/28/09 315,361 799,187 Daniel F. Packer 11,050 (a) 0.21/ 29.9375 1/28/09 208,044 527,225 Carolyn C. Shanks Michael G. Thompson 28,700 (a) 0.5% 29.9375 1W28/09 .49,35,0 1,369,353 52,500 (a) 1.0% 29.9375 1V28/09 - 98454 2,504,936 C. John Wilder 18,999 (a) 0A4% 29.9375 V128/09 57,706 906,498 Thomas J. Wright Jerry W. Yelverton 49,400 (a) 0.9% 29.9375 1128/09 930,089 2,357,027 (a) Options webe granted on January 28, 1999, pursuant to the Equity Ownership Plan. All options granted on this date have-.an exercise price equal to 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 over a three-year period beginning in 2000.
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| (b) Options were granted on 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 increass-over a ten-year option period and assuming annual compounding. The column presents estimates of potential values based on simple mathematical assumptions. The actual value, if any, a Named Executiveý Officer may realize is dependent upon the market price on the date of option exercise.
| |
| -201 -
| |
| | |
| .Aggtegated Option Exercises in 1999 and December31', 1999 Option Values The following table summarizes 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 options during 1999.
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| Number of Securities Value of Unexe*i sed Underlying Unexerdsed Options In-the-Money Options as of December 31. 199 as of December 31, 1999(al Exmeisab.. Unexercbable Exerisable Unexercisable C. Gary Clary 3,150
| |
| * ZS,025 Joseph F. Domino 1,500 13,487 3,375 Frank F. Gallaher 45,000 39,500 127,813 Joseph T. Henderson 7,500 Jerry D. Jackson 51,911 94,000 121,875 Nothan B. Langst*n 1,590 15,400. 3,375.
| |
| Steven C. McNeal 1,500 5,925 3,375 Donald E. Meiners 11,250 16,750 Daniel F. Packer 16,750 Carolyn*C. Shanks ,11,050 Michael G. Thompson 20,000 28,700 5,938 C. John Wilder 52,500 Thomas J. Wright :,18,999 Jerry W. Yelverton 8,250 49,400 4,500 (a) Based on the difference between the cloging price of Enitergy Corporation's common stock on the New York Stock Exchange Composite Transactions on Decemiber 31, 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 Coinensation 15 20 S25 30 35
| |
| $100,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 200,000 45,000 60,000 75,000 90,000 105,000 300,000 67,500 90,000 112,500 135,000 157,500 400,000 90,000 120,*0Q 150,000 180,000 21Q,000 500,000 112,500 15.0,000 187,500 225,000 262,500 650,000 146,250, 195,000. 243,750 ...292,500 341,250 950,000 213,750 285,000 35-6,250- 427,500 498,75Q0 All of the Named Executive Officers, participate in Retirement Income Plan,.&, 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 forty-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. The normal form of benefit. for a single, employee is' a lifetime annuity and for a married employee, is a 50% joint and survivor annuity. Other actuarially equivalent options are available to each retiree. Retirement benefits are not subject to any deduction for Social Security or other offset
| |
| - 202 -
| |
| | |
| covered by the plan as of amounts. The amount of the Named Executive Officers' annual compensation Table above.
| |
| December 31, 1999, is represented by the salary column in the Sunmary Compensation 1999, for the The credited years of -service under the Retirement Income Plan, as of December-31, 30; Mr. Langston 28; Mr.
| |
| following Named Executive Officers is as follows: Mr. Domino 29; Mr. Gallaher
| |
| : 20. The credited years: of service MeNeal 17; Mr. Packer 17; Ms. Shanks 16; Mr: Wright 30; and Mr. Yelverton Named Executive Officers, as a under the Retirement Income Plan,. as -ofDecember 31, 1999 for the following Mr. Clary 26; Mr.. Henderson 16; result of entering into supplemental retirement agreements, is as follows:
| |
| Keith and Mr. Meiners retiredduring
| |
| ,M*: Jackson 20;:Mr. Thompson 23; and Mr. Wilder 16. Mr. Cordaro, Mr.
| |
| .1999.with 40, 33,aand 39 credited years of services respectively.
| |
| and 415 of the Internal The maximum benefit under the Retirement Income Plan is limited by Sections 401.
| |
| Louisiana, Entergy Revenue Code of 1986, as amended; however, Entergy Arkansas, Entergy Gulf States. Entergy have elected to participate in the.Pension .Equalizatiqn Plan Mississippi, Entergy New Orleans,. and System Energy Officers, sponsored by Entergy Corporation. Under this plan, certain executives, including-the, Named Executivq under the Retirement hvome would receive an additional amount equal to the benefit that would have been payable
| |
| -Plan, except for the Sections 401 and 415 limitations discussed above. ,
| |
| Louisiana, Entergy In addition to the Retirement Income Plan discussed above, Entergy Arkansas, Entergy in the Supplemental 1Refirente Planlof Entergy Mississippi, Entergy New, Orleans,. and System Energy participate Participation Corporation and Subsidiaes and the. Post-Retirement Plan of Entergy Corporation and Subsidiaries. Entergy Entergy Louisiana, is bimited-to one of these two plans:and, is at the invitation ofEntergy Arkansas, the. appropriate Entergy Mississippi, Entergy New Orleans, and System Energy. The participant may re eiVe f.om Retirement Plan) or .0333 company a monthly benefit payment not in excess of .025 (under the Supplemental (as defined in the plans) for a (uider,the Post-Retirement Plan) times the participants average basic annual salary entered into, a Supplemental Retirement Plan maximum, of 120 months. :Mr. Packer and Mr. Yelverton have Mr. Keith, Mr. Meiners and Mr. Wright have participation contract, and Mr. Cordaro, Mr. Gallaheri Mr. Jackson, that the annual payments to indicate entered into Post-Retirement Plan participation contcts, Current estimates under the to that officer eachNamed Executive Officer under the above ,plans would be less than the payments System ExecutivewRetirement Plan discussed below.
| |
| System Executive Retirement Plan Table (1)
| |
| Annual, Covered Years of Service C n s 10, 15 20 25 30+,
| |
| . $ 60,000.. $ 90,000 $100,000 $110,000 $120,000
| |
| $ 200,000 90,000 . 135,000 150,000 165,000 180,000 300,000 120,000 .180,000 200,000 220,000 240,000
| |
| .400,000 150,000 225,000 250,000 275,000 300,000 500,000
| |
| .. 180,000 270,000 300,000 1.330,0,00 i 360,000 600,000
| |
| . 210,000 315,000. 350,000 385,000 420,000 700,000 1,000,000 300,000 450,000 500,000 550,000 600,000 incentive awards earned (1) Covered pay includes the average of the highest three years of annual base pay and shown are based on a by the executive during the ten years immediately preceding his retirement.. Benefits The benefits target replacement ratio of 50% based on the years of service and covered compensation shown.
| |
| levels would decrease (in the for 10, 15, and 20 or more years of service at the 45% and,55% replacement case of 45%) or increase (in the case of 55%) by the following percentages: 3.0%, 4.5%, and 5.0%,
| |
| respectively.
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| - 203 -
| |
| | |
| In 1993, Entergy Corporation adopted the System Executive Retirement Plan (SERP). This plaa was amended in 1998. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy are participating employers in the SERP. The SERP is an unflmded defined benefit plan offered at refirement to certain senior executives, which would currently:indlude all the Named Executive Officers (except for Mr. McNeal). Participating executives choose, at retirementpbetween the retirement-benefits paid under-provisions lof the SERP or those payable under the Supplemental Retirement Plan or the Post-Retireftift Plan discussed above. 1The plan was amended in 1998 to provide that'covered pay is the averagetofthe highest thrfe years annual bate pay and. incentive' awards earned by the executive during the ten years immediately preceding his retiremnt.' Benefits paid under the SERP are calculated by'multiplying the covered pay. times targdt 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 maximum of 30 years of service. In accordance with the SERP fonnula, the target ratios are reduced
| |
| 'for each year of service below20 yea6rs., The credited years. of service under this plan are identical tothe years, of se4ice for Named ,Executive Officers (other than Mr. Henders6n, Mr. Jackson, ,Mr. Keith, Mr. Thompson,-Mr.
| |
| Wildr, and Mr. Yelverton) disclosed above in the .section entitled "Pension Plan Tables-Refiren nt:.Income. Plan Table'. Mr. Henderson, Mr. Jackson, Mr. Thompson, Mr. Wilder and Mr. Yelverton have 8 months, 26'years, .18 years, 1 year, and 30 years, respectively, of credited service under this: plan. Mr. Keith had 16 years. of credited service under this plan when he retired.
| |
| T-h amendedlaplih provides 'tht a single employee. receives a liiftime annuity and a married employee reoeive) the reduced benefit withy-a.50% surviving spouse annuity. Other actuarially equivalent :optionslare available to each retirw.e -SERP benefits ate offset -by any and all defined benefit plan payments fromrv Eterg.
| |
| SERP benefits arenotl subject to Social Security offsets.
| |
| 'Eligibility for and receipt of benefits under any of the executive plans described above ae contingen**upon several factors. The lparticipaMt must agree, without the specific consent of the Entergy company for which such participantwaSlast employd not to take employment after retirement with any 6tity that is-in.competition with, or similar in nature to, Entergy Arkansas, Entergy Gulf Stat*, Entergy Louisiana, Entergy-Mississippi, Entergy New Orleans, and System 'Energy or any affilige thereof. Eligibility for benefits is-fbrfeitable for various 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 pernnission .
| |
| In addition to the Retirement Income Plan discussed above, Entergy Gulf States provides, among other benefits to officers, an Executive Income Security Plan for key managerial personnel. The plani provides participants with certain retirement, disability, termination, and survivors' benefits. To the extent *at such benefits are not finded by the employee benefit plans of Entergy Gulf States or, by vested benefits payable by the participants' former employers, Entergy Gulf States is obligated to make supplemental payments to participants or their sutilvbrs. The plan provides that upon'the death or disability of a participant during his employment, he or his designated survivors will receive (i) during the first year following his death or disability an- amount not to exceed 'hisý annual base salary, and (ii) thereafter for a number of years until the participant attains or would have attained age 65, but not less than nine years, an amount equal to one-half of the participant's annual base salary.
| |
| The planhalso provides supplemental retirement benefits for life for participants retiring after reaching age 65 equal to one-half of the participant's average final compensation rate, with one-half of such benefit upon the death of the participant being payable to a surviving spouse for life.
| |
| J,, ý. Entergy Gulf States amended and restated the plan effective March 1, 1991,*to provide such benefits for life upon termination, of employmtent 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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| - 204 -
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| | |
| medical benefits continue fr: life.: By virtue of the 1991 amendment and restatement, benefits for a participant under such plap cannot be modified becomes eligible to participate in the plan. Mr. Domino.is a-participant
| |
| .ncehe in this plan, Compensation of Directors 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-mpay,(* "dj=ectoWr, and none. of. the curren. directors, of Entergy Corporation are compensated for thir responsibilities as director.
| |
| -Retird non-emplQyic direqcors of Entergy Arks. as, Entergy L siaa, TFitergy Mississippi, and..Btrirgy month Now.Orleans with a mimuM of five years.,f sgrvicevo.,therespcetive Boards-of Directors aftaid $2OQa ito the number of year of.active service as dircmtors e non ployee kfr, a tom*,*uf years. corresponds.g advisory directors with over ten years service receive a lifetime benefit of,$200,a month.Y ,ofqerice as ap of 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 if the benefits are reduced. The plan also provides disability retirement and optional hospital and medical coverage 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 anniversary dates of this grant. Mr. Wilder was offered participation in the System Executive Retirement Plan and was credited with 15 years of service. If-Entergy tenninates Mr. Wilder's-employment within two years other than for just cause, he will receive his annual base salary and continuation of his health benefits for two years; all remaining earned 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.
| |
| Personnel Committee Interlocks and Insider Participation The compensation of Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entery Mississippi, Enter. -New,Orleans, and System Energy executive -officers was set by the Personnel Committed of Entergy "Corporation's Board;of Difeckt, cOmposed solely ofDirectors of Entergy Corporation. Dr. Mtirrill is the'retired Chairman of the. Bdard and Chief Executive Officer of Entergy Gulf States, -Iic. and served'on the Personnel Conmittee of Entergy Covporatioh during 1999.
| |
| - -J.'. .. . . , - . .. .*. -. , .,
| |
| - 206 -
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| | |
| Item 12. Security Ownership of Certain Beneficial Owners and Management Entergy Corporatioti owns 100% of the outstanding common stock of registrants Entergy Arkansas, Entergy Gulf States, Enterpy 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 ou"tqnding 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 aaements that may, at a subsequent date, result in a change in control of any of the regstrants.
| |
| As of December 31, 1999, the directors, the Named Executive Officers, 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 Beneficial OwnershiD(a)
| |
| "SoleVoting and Other Investment Beneficial Name Power. Ownershin(b)
| |
| Entergy Corporation W. Frank Blount* 6,234 George W. Davis* 900 Norman C. Francis* 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, mH* 300 Paul W. Murrill* 2,682 James RI Nichols* 15,614 William A. Percy, ][* -[
| |
| Dennis H. Reilley* 300 Win. Clifford Smith* 8,520 Bismark A. Steinhagen* 9,047 C. John Wilder"* 8,666 All directors and executive officers 136,086 247,411
| |
| - 207 -
| |
| | |
| "EiftergyCorporatibn Common Stock Amount and Nature of Beneficial ownersý ip(
| |
| "SoleVoting ad ote~u " 1. S..
| |
| Investment Beneficial N i.._
| |
| e' Power Owneirhip(b)"
| |
| Entergy Arkansas C. Gar Clary" 15,705 3,750 Frank F.Gallaher* '5,706 " 45,000 Dcnald C i-nti* ,2095 55,000 R. Drake Keith**(c) 16,984 Michael G. Thompson** 9,319 20,000 C. Jo Wildei*** '8,666
| |
| *Tl~niaI.Wright*** *12,432
| |
| 'AgPhrectbis and executive, fcers 82,553 128,750 Entergy Gulf States c'a Clary**:.
| |
| C.-" 15,705 3,750 John J. Cordaro**(c) . 3,46 Joseph F. Domino*** 5,6161 ---1,500 Frank F. Gallaher** 5,706 45,000 Donald C. Hlintz* 2,095 55,000 Jerry D. Jackson*** 20,998 -.51,911 Michael G. Thompson** 9,319. 20,000 C. John Wilder***. 8,666 All directors and executive officers 81,871 186,411 Entergy Louisiana C. Gary Clary** 15,705 3,750 John J. Cordaro**(c) "346",
| |
| Frank F. Gallaher** 5,706 .45,000 Donald C. Hintz* 2,095 55,000 Jerry D. Jackson#** 20-998 512911 Michael G. Thompson** 9,319 20,000 C. John Wilder*** 8,666 All directors and executive officers 75,779 184,911
| |
| - 208 -
| |
| | |
| . 1 Entergy Corporation C -innmoi Stock "Amountand.Nature of
| |
| * Beneficial Ownershil(a)
| |
| .. Sole Votit~g. .. : " "
| |
| and Other Investment - Beneficial Name Power Ow*ershiDlb' Entergy Mississippi C. Gary ClaWy** 15,705 3,750 45,OQ,"
| |
| Frank F. Gallaher**
| |
| 2,095 55,000 Donald C. Hintz*
| |
| 21,109 11,250 Donald E.:Meiners**(c)
| |
| Carolyn C. Shanks*** ,-2,528 Michael G. Thompson** :.:9,3i9 20,00fi C. John Wilder*** 8,666 All directors and executive
| |
| . - : ' - 74,978 139,000 offi Entergy-New. Orleans C- GaWClary**: 3,7-50
| |
| * .,Frank*F. Gallaher 4 : S5,706 ,' :-45:,00
| |
| : .Doitald C.;HiOtW.,.. . 2,095 :55000; Daniel&F. Pater*** .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 ofthe 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.
| |
| - 209 -
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| | |
| (b) Includes, for the Named Executive Officers, shares of Entergy Corporation common stock in the form of unexercised stock optiomn awarded pursuant to the Equity Ownership Plan as follows: C. Gary Clary, 3,750 shares; Joseph F. Domino, l,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. Lui, 40,000 shares; Jerry L. Maulden, 32,500 shares; Steven C. 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 the former Chief ExecutiwvOfficer and a former director of Entergy Gulf States, LA and Entergy Louisiana. 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 Relationships and Related Transactions During 1999, T. Baker Smith & Son, Inc. performed land-surveying-services 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;*a 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.
| |
| -210-
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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)
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| (a)2. Financial Statement Schedules Reports of Independent Accountants on Financial Statement Schedules (see page 220)
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| Financial Statement Schedules are listed in the Index to Financial Statement Schedules (see page S-I)
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| (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.
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| (b) Reports on Form 8-K None
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| -211-
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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.
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| ENTERGY CORPORATION By /s! Nathan E. Langston Nathan*E. Langston, Vice President and
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| -*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 signatture of each of the undersigned shall be deemed to relate only to matters having reference to the above-named company and any subsidiaries thereof.
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| Sipnature Title Date Is/ Nathan E. Langston Nathan E. Langston Vice President and Chief March 14, 2000 Accounting Officer (Principal Accounting Officer)
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| J. Wayne Leonard (Chief Executive Officer and Director; Principal Executive Officer); Robert v.d. Luft (Chairman of the 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, m1, Paul W. Murrill, James R.
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| Nichols, Eugene H. Owen, William A. Percy, II, Dennis H. Reilley, Win. Clifford Smith, and Bismark A. Steinhagen (Directors).
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| By: /s/ Nathan E. Langston March 14,2000 (Nathan E. Langston, Attorney-in-fact)
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| -212-
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| ENTERGY ARKANSAS) INC.
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| SIGNATURES
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| . Pursuant to the requirements of Section 13 or 15(d) ofthe Secuuities ExchangeAct of 1934, the registrant has duly caused this report to be signed-onits behalf by-the'Undersigned,1thereuntoduly authorizd,: The signature of the undersigned, company shall bq deemed to relate only to matters having reference to such companyand any subsidiaries thereof.
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| ENTERGY ARKANSAS, INC.
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| By /s/ Nathan E. Langston 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 shallfbe deemed to relate onlylto matters having referenceto, the above-named company and any~subsidiaries thereof. ,. :... t..
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| Sianature Title Date
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| /s/ Nathan E. Langston Nathan E. Langston Vice President and Chief March 14,2000 Accounting Officer .
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| (Principal Accounting Officer)
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| Thomas 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); and Donald:C. Hintz (Director).
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| By: Is/ Nathan E. Langston March 14, 2000 (Nathan E. Langston, Attorney-in-fact)
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| -213 -
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| ENTERGY GULF STATES, INC.
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| SIGNATURES Pursuant to the requirements of Section .13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly cauged 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.
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| ENTERGY GULF STATES, INC.
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| By Isf Nathan E. Langston Nathan E. Langston, Vice President and Chief Accounting Officer Date: March 14, 2000 SPursuantto 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 shall be deemed to relate only to matters having reference to the above-named company and any subsidiaries thereof.
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| Signature Title Date
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| /s/ Nathan E. Langston Nathan E. Langston Vice President and Chief March 14, 2000 Accounting Officer (Principal Accounting Officer)
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| 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).
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| By: /s! Nathan E. Langston March 14, 2000 (Nathan E. Langston, Attorney-in-fact)
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| -214-
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| ENTERGY LOUISIANA, INC.
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| SIGNATU1 S t
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| Pursuant to the requirements of Section 13 or 15(d) ofthe.Secuiies Ex.hqg Act of 1934, thi re.isgia has duly caused this report to be siged on its behalf by the undersigned, therounto 4uly authonrize. The signature of the dsd"ped company shlll be deemed to relate only to matters having refePce to such company and any subsidiaries thereof ENTERGY LOUISIANA, INC.
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| S,,): , ':* ,*
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| By Is/ Nathan E. Langston Nathan E. Langston, Vice President and Chief
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| .. ; i. : ;_, JI i * ,* ) Q
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| * f,::.*"
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| Accounting Officer Date: March 14, 2000 by
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| .pors4ntto th e i ts ofthe SecuritiEx-.change Act pf:1934, thisreporthas been.signed below apin the capacities and on the dates indicý .Thecompany andsignature of the*f.ow"ng persons. ,o beha..fjfIe registrant to relate only, V i-*g mnafttrs reference,,to the above-name
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| *cofm uad¢ried shall be deemed any subsidiaries thereof.
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| Title Date
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| *..o Siiature
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| /s/ Nthan E. LangsW0n March 14, 2000
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| ,Nathan E. Langston r.Vice President and Chief Naha-E.a.stnAccounting Officer (Principal Accounting Officer)
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| Jerry D. Jackson (Chairmn of the Board, president, Chief Executive Officer, and Direct..r, Financial Principal..fxeputive Offi*er); C. JohnlWilder (Executive Vice President, Chief Officer, and Director;ý Prinipal Financial Officer); and Donald C. Hintz (Director).
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| March 14, 2000
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| ..By: /s/ Nathan E. Lan ston (Nathan E. Langston, Attorney-in-fact)
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| -215-
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| ENTERG MNISSIPPI, INC.
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| SIGNATURES
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| .Pu tuantto the'requiilients. of Section 13-or 15(d) of thi Securities_BExange Act of 1934, -the registrant has 4uly caksed bhis'ftloort wtk- b iged on its behdlf by the undersigned, thaftuito -duly authorized. ThoU signature of the tmddisigned company: slhll be deemed td rclate only to nm having'tefie c: to such company andltny subsidiaries thereof.
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| * . /* *,K* ENTERGY MISSISSIPPI, INC.
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| By /s/ Nathan E. Lamgston Nathan E. Langston, Vice President and Chief Accounting Officer Date: March 14,2000 P. i nt tothe requirements ofth6e eaitie Eang Actof 1934, rtse has signed below by the fofto gpcrso ofon behalf of the regis -Itbdin thd capacties and on tý dafs inlt -MwThe sigoAure- of each of the undeksigned shall be d6eeed to rdlatny to mattets having refman io the abovýe dbompany and any subsidiaries thereof.
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| Sisnature Title Date s/ Nathan E. Langston Nathan E. Langston Vice President and Chief March 14, 2000 Accounting Officer
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| "(PrincipalAccoumting Officer)
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| Carolyn C: Shanks. (Chainnan of the Board, Presideit, 'Chief Executive Officer, and Director; Principal Executive Officer); C. John Wilder (Executiv* Vice P i t, .Chief FinanCial Officer, and Director; Principal Financial Officer); and Donald C. Hint Olrirdut*.
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| By: A/ Nathan E. Langston March 14, 2000 (Nathan E. Langston, Attorney-in-fact)
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| -216-
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| ,ýENTERGYNEW ORLEANS, INC.
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| SIGNATURES pursuant to The requirement of Sectionf-13 or 15(d) of theSeeuriti6s Exchafige Act f -193-4, the registrant has duly caused it report to be sighed on its behilf by the undersigned, therentt -dulyauthorized., 7e signature bft ie de igned company shall be-deemed ftlate only to m-Attes having i-frehce tduch company and any subsidiaries thereof.
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| ENTERGY NEW ORLEANS, INC.
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| By /s/Nathan E. Langston Nathan E. Langston, Vice President and Chief Accounting Officer Date: March 14, 2000 Ptl.ftbit to ihe'kipiJremihts of the' Securities Exchage Act f1934, this te)ort.h-been signed below by
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| 'the nbll6wing erso6s :bnbehaof the regtrant and in the capacities and on the datea:ind. zd. ýThe signature of eachadf ftundrggned shall be deemed to relate only tO mattig§ having refdrc .e totlie"&abv&enamed company and any subsidiaries thereof
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| .; ý I Signature Title '*. . .,. Date
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| /s/ Nathan E. Langon Nathan E. Langston Vie President and Chief March 14, 2000 Accounting Officer (Principal Accounting Officer)
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| Daniel F.VPatker (ChMaiman-ofCthe:Joh Officer,.*d Director; Bad, Presidentý, Chief Executive-sident, Principal"Executive Officer); W wilder (Edto Vice Chief Financial Officer, and Director;- Princpal Fifiii*cial Officer); akidDontld C. Hintz (Directbr)'. . .
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| By!; A Naian E. Langston March 14, 2000 (Nathan E. Langston, Attorney-in-fact)
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| -217-
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| SYSTEM ENERGY RESOURICES, INC.
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| SIGNATURES Pursuant to the requirexpents of Section 13 or 15(d) of t1e Securities Exclange Act of 1934, the registrant has duly caused this report to be signed on its. behalf by the undersigned, theremtoduly authorized. The signature of the undersiged. company shall be deemed to relate only to, matters having reference to such company and any subsidiaries thereof.
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| SYSTEM ENERGY RESOURCES, INC.
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| By /s/ Nathan E. Langston 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.sign*ebelow by the following persons on behalf ofthe registrant a=d in the capacities and onthe Oates indicated. The signature of each of the undersigned, shall be deemed to relate only to.matters having refere* to the above-name*dm company and any subsidiaries thereof.
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| Sip-nature Title Date
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| /s/ Nathan E. Langston Nathan E. Langston : Vice President and Chief. .Marc 14,2000
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| ,.* Accounting Officer (Principal Accounting Officer)
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| Jerry W. Yelvrtoon (Chairman of the B*oat* President, Chif ExecutiveOfficer, and Director;,
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| Principal Executive Officer); C. John Wilder (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer);.and Donald C. Hintz (Director).. .
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| By: /s/ Nathan E. Langston March 14,2000 (Nathan E. Langston, Attorney-in-fact)
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| -218-
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| EXHIBIT 23(a)
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| ~COS~¶~OPINDIBPENDENTACCOUNTANT 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 333-22007) of Etfter-Corporatidn of ouir reports dated February 17, 2000, relating to the financial statements and financial statement schedules, whicheaper in this Form 10-K.
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| We hereby consent to the incorporation by iefrAce in the. registration staemehts'afndth :relateý pr6spectuke on Form 5-3 (Nos. 33-50289,; 333L00103 and 33305045) of EflterA a, iofreports dated February 17, It-Iout 2000; relating to thf ial stateents*4& al ent e, Wiih apiear *i thN Forit" 10-K..- -. .
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| We hereby consent to the incorporation by reference in the tegistratiouustatthiehts, and:tfie'related prospectuses on Form S-3 (Nos. 33-49739, 33-51181 and 333-60957), on Form S-S (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.
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| We hereby consent to the incorporation by reference in the registration statements and the related. prospediseson Form S-3 (Nos. 33-46085, 33-39221, 33-50937, 333-00105, 333-01329, 333-03567 and 333-9368J) of.Ei1terty 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.
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| 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.
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| February 17, 2000, relating to the financial statements and financial statement schedule, which appear in this Form 10-K.
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| 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.
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| 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.
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| PricewaterhouseCoopers LLP New Orleans, Louisiana March 14, 2000
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| *-219 -
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| | |
| Report of Independent Accountants on financial Statement Schedules
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| ,To the Board of Direatio and Sharholders, of Entergy Corporation:
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| Our audits of the consolidated financial statements of Entergy Corporation and the financial statements of Entergy Arkns4s,. Ine* Entergy Guf StOes, .p., Epterg 11ouisiaga, I*nic Enterg. Misissippi, Iu-.and Entergy. New Orleans, Inc. (which xeport idaca ttnwt r ineludcd in this Annual Report ýon Form, 10-K) alsoa included an audit of t* * ..statement v l ein . 14(aX2) of this Form LQ-K. In.oK.opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with *elatg finaia.. . * . - ,-s.
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| PricewaterhouseCoopers LLP . . -
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| ,New Orlans,0 fquis-an .
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| : y*
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| .Vebruary 17, 2000 I;
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| -'220 -
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| INDEX TO FINAMIAL STATEMENT SCHEDULES Schedule - Page I Financial Statements of Entergy Corporation:
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| Statements of Income nFor the Years Ended December 31, 1999,
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| -99.8, and 1997 S-2 S... em. nts of Cash Flows - For the Years Ended December 31, 1999,
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| `109,%nd 1997 S-3 Balance Sheets, December 31, 1999 and 1998 S-4 Statements of Retained Earnings and Paid-In Capital - For the Years Ended December 31, 1999, 1,998, and 1997 S-5 Valuation and Qualifying Accounts 1999, 1998 and 1997:
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| Entergy Corp~rtion and Subsidiaries S-6 Entergy Arkansas, Inc. S-7 Enter Gulf States, Inc. S-8 Entergy Loisiana, Inc. S-9 Entergy Mississippi, Inc. rS-10
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| " Entergy New Orleans, Inc. .. ' S-11 Schedules other than those listed above are omitted because they are not required, not applicable, or the required information is shown in the financial statements or notes thereto.
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| Co.lumns-have been omitted from schedulds filed because the information is not applicable.
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| S-1
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| ENTERGY CORPORATI4N.
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| SCHEDULE I - FINANCIAL STATEMENTS OF ENTERGY CORPORATION STATEMENTS OF INCOME
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| . For the.Years Ended December 31,
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| ..:,i. ...*
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| S1999
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| .. ...
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| * Th 0(sa.Psands)
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| Th.. ds 1997 Income: - ... . . ..
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| Equity in income of subsidiaries $651,977 :$822,758 $325,419 5,703 2,536 5,086 Interest on temporary investments
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| ,. 657,68, 825,294 330,505 Total Expenses and Other Deductions:
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| Administrative and general expenses "85,815*' ': 77,296 62,250 Income taxes (credit) 12524
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| .. (6847) 3,438 Taxes other than income 739 1,325 1,226 Interest 6,143 14,451 15,908 Tota.l _2 , .. 86,225 . 2,822 Net Income $552,459 $739,069 $247,683 See Entergy Corporation and Subsidiaries Notes to Financial Statements in Part IL Item 8.
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| S-2
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| ENTERGY CORPORA.ION SCUKHILE I - FINANCIAL STATEMENTSOF 1oTERGY CORPORATION STA?1iENISOF CASH I0QWS Year to Date December 31, 1999 1998 1997 (In Thousands)
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| Operating Actiytjr' Net income $552,459 $739,069 $247,683 Noncash items included in net income.
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| Equity in earnings of subsidiaries (651,977) (822,758) (325.419)
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| Defered income taxes (15,237) S.M.997) 898 Depreciation 11438 2.069 1,442 Chagesin worlng.cipital:.
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| Receivables 198 (21,033) (8,683)
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| Payables 17,256 357 (3,690)"
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| Other working capital accounts (83,711) 26,683 68,089 Common stock dividends received from subsidiaries 532,3(g) 488,501) 5504200
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| ...Other 68,276 36,948 43,479 Net cash flow provfded by operating activities 421,002 447,838 573,999 Invtg Activities:.
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| Investment in subsidiaries 237.121 (96,383) (633,449)
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| * Capital expenditures': (604) (212Y (23,079)
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| Other 9,327 l~lt as fowprovided B(used in) investing activities 245,844 (96,595) (656,528)
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| Financing Activities:
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| Changes in short-term borrowings (165,500) 99,500 166,000 Advances to subsidiaries I, (32,261) (33,000) (13,450)
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| Common stock dividends paid (291,483) (373,441) (438,i83)
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| Repurchase ofcommon stock (245,004) (2,964)
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| 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 (52,081) 60,678 (62,783)
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| Cash and cash equivalents at beginning ofperiod 68,574 7.896 70.679 Cash and cash equivalents at end of period S16,493 $68,574 $7,896 See Entergy Corporation and Subsidiaries Notes to Financial Statements in Part li, Item 8.
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| S-3
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| ENTERGY CORPORATION SCHEDULE I - FINANCA STATMi1ITS 0kINTERGY CoRPoRATION BAACE MHEET. .
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| December 31, 1999 1998 (In Thousands)
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| ASSETS Current Assets:
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| Cash and cash equivalents:
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| Temporary cash investments - at cost, which approximates market 16,493 .68,574 Total cash and cash equivalents.
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| AccoiMts receivable:
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| 17750. . 48,660 Associated companies. 93 253 Interest receivable Other 1,937 9,380 Total. S196,024,. 126,867 Investment in Wholly-owned Subsidiaries 7,114,525 7,ý6.8,768 Deferred Debits and Other Assets 50,357 71,543 Total, 7,4360,906 . $7,467,178 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities:
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| Notes'payable $120,000 $285,500 Accounts payable:
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| "2,165 6,041 Associated companies 17,786' 531 Other 9,-42 Taxes-accrued 3,394 Other current liabilities 6,399 1.55,492 295,466 Total 80,989 64,672 Deferred Credits and Noncurrent Liabilities Shareholders' Equity:
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| Common stock, $.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 4,630,609 Paid-in capital 4,636,163 2,786,467 2,526,888 Retained earnings (68,782) (46,739)
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| Cumulative foreign currency translation adjustment Less cost of treasury stock (8,045,434 shares in 231,894 6,186 1999 and 208,907 shares in 1998) 7,124,425 7,107,040 Total common shareholders' equity Total $7,360,906 $7,467,178 See Entergy Corporation and Subsidiaries Notes to Financial Statements in Part II, Item 8.
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| S-4
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| kNTE1CY cO~kORATION SCHEDULE If- FINANCIAL STATEMENTS OF ENTERGY CORPORATION STATEMENTS OF RETAINED EARNINGS AND PAID-IN CAPITAL For the Years Ended December 31, 1999 1998 1997 (In Thousands)
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| Retained Earnings, January I $2,526,888 $2,157,912 $2,341,703 Add:
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| Net income 552,459 739,069 247,683 Deduct:
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| Dividends declaed-on common stock 294,352 369,498 432,268 Capital stock and other exp6ei2s (1,472) 595 (794)
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| Total 292,880 370,093' 431,474 Retained Eazning, December. 31 . $2,786,467 $2,526,888 $2,157,912 Paid-in Capital, January 1 $4,630,609 $4,613,572 $4,320,591 Add:
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| Gain on reacquisition of subsidiaries' prefetred stock 273 Common stock issuances related to stock plans 5,554 , 17,037 292,870 Total 5,554 17,037 293,143 Deduct:
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| Capital stock discounts and other expenses 162 Paid-in Capital, December 31 $4-j636,163 $4,630,609 $4,613,572 See Entergy Corporation and Subsidiaries Notes to Financial Stafemefitg::'
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| in Part l1, Item 8.
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| S-5
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| ENTERGVCORPORATIONAND SUBSIDIARIES SCHEDULE I - VALUATION AND QUALIFYING ACCOUNTS YearsýEpdedDecember.31,1999,1998 and 1997 j (InThousalids)
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| 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 Lyvote 12 UI rcnuu Year ended December 31, 1999 Accumulated Provisions Deducted from Assets
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| $10,300 $19,349 $20,142 $9,507 Doubtful Accounts Accumulated Provisions Not Deducted from Assets:
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| $(14,846) $35,208 $53,629 S(33,267)
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| Property insurance 28,162 25,162 19,015 34,309 Injuries and damages (Note 2) 35,857 11,344 9 498 37,793 Emviromnental Total $49,173 $71,714 82,652F $198r5 Yearended December 31, 1998 Accumulated Provisions Deducted from Assets
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| $9,800 $16,451 $15,951 .$10*300 Doubtful Accounts Accuidlated Provisions Not Deducted from Assets:
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| S23,422 $28,838 $67,106 $(14,846)
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| Property insurance 26,484 17,960 16,282 28,162 Injuries and damages (Note 2) 36,368 7,596 8,107 35,857 Envirounrital Total - i "$86,274 $54,394 $91,495 $49, 173 Year ended December 31, 1997 Accumulated Provisions Deducted from Assets
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| $9,189 $17,106 $16,495 $9AQ0 Doubtful Accounts Accumulated Provisions Not Deducted from Assets:
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| $35,026 $24,128 135,732 $23,422 Property insurance 26,145 20,294 19,955 26,484 Injuries and damages (Note 2) 37,719 5,993 7,344 36,368 Environmental
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| $98,890 $50,415 $63,031 $86,274 Total Notes:
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| (1) Deductions from provisions represent losses or expenses for which the respective provisions were
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| - created. In the case of the provision for doubtful accounts, such deductions are reduced by recoveries.
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| of aiounts previously written off.
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| (2) Injuries and damages provision is provided to absorb all current expenses as appropriate and for the estimated cost of settling claimsfor injuries and damge..-
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| S-6
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| ENTERGY ARKANSAS, INC.
| |
| SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 1999,1998, and 1997 (InThousands)
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| ColuWn 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., (Notel) of Period Year ended December 31, 1999 Accumulated Provisions Deducted from Assets Doubtful Accounts $1,753 $4,175 $4,160 .:$1,768 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $7,600 S18,306 $25,048 $858 Injuries and damages (Note 2) 4,618 2,502 .3,867. 3,253 Environmental 4,894 3,132 3,092 .4,934 Total $17,11.2 $23,940 $32,007 . $9;045 Year ended December 31, 1998 Accumulated Provisions Deducted from Assets Doubtful Accounts $1,799 $3,848 $3,894 $1,753 Accunulated Provisions Not Deducted from Assets:
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| Property insurance $858 $18,805 $12,063 $7,600 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 $23,419 $16,716 $17,112 Year ended December 31, 1997 Accumulated Provisions Deducted from Assets Doubtful Accounts $2,326 $3,140 $3,667 $1,799 Accumulated Provisions Not Deducted from Assets:
| |
| Property insurance $14 $11,613 $10,769 $858 Injuries and damages (Note 2) "2,810 3,538 1,550 4,798 Environmental 5,163 1,320 1,730 4,753 Total $7,987 $16,471 $14,049 $10,409 Notes:
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| (1) Deductions from 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.
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| (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.
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| S-7
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| ENTERGY GULFSTATES, INC.
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| SCHEDULE U.- VALUATION AND QUALIFYING ACCOUNTS Years Ended December 1999,1998, and: 1997
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| .(InThousands)
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| .. Column A . "Colu*,n .. Column C ColUha D Column E Other Additions Changes Deductions al.ance at. from Balance neglig Charged to Provisions at End Descriptloa of Ifriod Income (Note 1) of Period Year =iied December 31, 1999 Accunulated Provisions Deducted from Assets
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| $..735 $4,271 $4,171- 1$1,828 Doubtful Accounts.
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| Acuml tedIovisions Not Deducted from Assets Prperty insurance -. ($43184) $4,486 $3,754 *(3,452)
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| Injuries and damageds(Note 2) S,4,759 9,810 -5,885 8,684 Environmental 22,309 4,187 2,051 24,445 Total : $22,884 $18,483 $11,690 $29,677 Year ended December 31, 1998 Accnumlated Provisions Deducted from Assets Doubtful Accounts .$1,791. $3,169 $3,225 $1,735 Accumulated Provisions Not Deducted from Assets Property insurance $4,317 $5,583 $14,084 S(4,184) hIjuries and damages (Note 2) 5,339 4,634 5,214 4,759 Environmenta. '23S,789- 3,058 4,538 22,309
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| * $33,445-.- $13,275 $23,836 $22,884 Year ended December 31, 1997 Accumulated Provisions Deducted from Assets Doubtful-Accounts $1,997 $3,695 $3,901 $1,791 Accumnulated Provisions Not Deducted from Assets
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| $17,003 $5,584 $18,270 $4,317 Property insurance Injuries and damages (Note 2) 9,594 5,479 9,734 5,339 SEnvironmental . " " 21,829 3,746 1,786 23,789
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| * Total. . .. .$48;426 $14,809 $29,790 $33,445 Notes:
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| (1) Deductions from 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.
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| (2) Injuries and damages provision is provided to absorb all-current expenses asappxopriate and for the estimated cost of settling claims for injuries and damages.
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| S-8
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| ENTERGY LOUISIANA, INC.
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| SCHEDULE 1I- VALUATION AND QUALIFY!NG ACCOUNTS Years Ended Decejpewr 31,1999, 1998, and 1997 (In Thousands)
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| Column A Column B Column C Column D Column E Other Additions Changes Deductions Balance-at from Balance f*eI*niting ý Charved to PVroVIStmUt " t UWnd Description of Period Income (Note 1) orPeriod Year ended December 31, 1999 Accumulated Provisions Dcduwtd from Assets Doubtful Accounts $1,164 $4,797 $4,346 . $,615 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $(17,825) $6,680 $12,944 $(24,089) nuries and damages (Note 2) 13,124 7,038 7,710 12,452 Environmental 7,236 1,059 1,273 7,022 Total S2,535 $14,777 $21,927 $(4,615)
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| Year ended December 31, 1998 Accumulated Provisions Deducted from Assets Doubtful Accounts $1,157 $1,919 $1,912 $1,164 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $581 $2,930" $21,336 $(17,825)
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| Injuries and damages (Note 2) 9,944 9,263 6,083 13,124 Environmental ,7,599 668 1,031 7,236 Total $18,124 $12,861 $28,450 $2,535 Year ended December 31, 1997 Accumulated Provisions Deducted from Assets Doubtful Accounts $1,429 $2,542 $2,814 11,157 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $261 $5,411 $55091 $581 Injuries and damages (Note 2) 9,443 5,080 4,579 9,944 Environmental 9,979 495 2,875 7,599 Total $19,683 $10,986 $12,545 $18,124 Notes:
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| (1) Deductions from provisions represent losses or expenses for which the respeotive provisions were created. In the case of the provision for doubtful accounts, such deductions arereduced by recoveries of amounts previously written off.
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| (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.
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| S-9
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| ENTERGY MISSISSIPPI, INC.
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| SCHEDULE I - VALUATION AND QUALIFYING ACCOUNTS Years Ended Decemiber 31,1999, 1998, and 1997 (In Thousands)
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| Column A Column B Column C Column D Column E Other Additions Changes Deductions Balance at from Balance Beit ning Charged to Provisions at End Description qOfPeriod. Income (Note 1) of Period Year ended-December 34, 1999 Accumulated Provisions Deducted from Assets Doubtful Accounts $1,217 $2,106 $2,437 $886 Accumulated Provisions Not Deductid from Assets:
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| Property insurance $(11,543) $5,736 $10,549 $(16,356)
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| Iwnjes and damages (Note 2) 3,796 2,950 (103) 6,849 Environmental 704 895 1,005 594 Tota1 . $(7,043) $9,581 $11,451 $(8,913)
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| YWearended December 31, 198 Accunmlated Provisions Deducted from Assets Doubtful Accounts $931 $2,747 $2,461 $1,217 Accunmlated Provisions Not Dedicfed fr6i Assets:
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| Property insurance $2,179 $1,520 $15,242 $(11,543)
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| Injuries and damages (Note 2) 4,662 (437) 429 3,796 Environmental : 227 900 423 704
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| $7,068 $1,983 $16,094 $(7,043)
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| Total Yeaf 6d Decmer1 1997 Accumulated Provisions Deducted from Assets Doubtful Accounts $1,374 $1,950 $2,393 $931 Accumulated Provisions .Not Deducted from Assets*"'
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| Property insurance $2,082 $1,520 $1,423 $2,179 Injuries and damages (Note 2) 2,905 4,055 2,298 4,662 EnvirQnmental 693 330 796 227 Total, $5,680 $5,905 $4,517 $7,068 Notes:
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| (1) Deductions from 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.
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| (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.
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| S-10
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| ENTERGY NEW ORLEANS, INC.
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| SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS Years Ended December 31, 1999,1998, and 1997 (In Thousands)
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| 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 Year ended December 31, 1999 Accumulated Provisions Deducted from Assets Doubtful Accounts $761 S1,936 $1,851 $846 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $11,106 - $1,334 $9,772 Injuries and damages (Note 2) 1,865 2,862 1,656 3,071 Environmental 714 2,071 1,987 798 Total $13,685 $4,933 $4,977 $13,641 Year ended December 31, 1998 Accumulated Provisions Deducted from Assets Doubtful Accounts $711 - $(50) $761 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $15,487 - $4,381 $11,106 Injuries and danages (Note 2) 1,741 1,356 1,232 1,865 Environmental - 1,500 786 714 Total $17,228 $2,856. $6,399 $13,685 Year ended December 31, 1997 Accumulated Provisions Deducted from Assets Doubtful Accounts $696 $1,599 $1,584 $711 Accumulated Provisions Not Deducted from Assets:
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| Property insurance $15,666 - $179 $15,487 Injuries and damages (Note 2) 1,393 2,142 1,794 1,741 Environmental 55 102 157 0 Total $17,114 $2,244 $2,130 $17,228 Notes:
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| (I) Deductions from 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.
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| (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.
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| S-11
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| 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 nmnbers 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 Itbn 102 of Regulation S-T of the SEC, immediately precedes the exhibits being physically filed with this Form 10-K.
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| (3) (i) Articles of Incorporation Entergy Corporation (a) 1 - Certificate of Incorporation of Entergy Corporation dated December 31, 1993 (A-l(a) to Rule 24 Certificate in 70-8059).
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| 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).
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| Entergy Arkansas
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| *(c) I- Amended and&Restated Articles of Incorporation of Entergy Arkansas effective November 12, 1999.
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| Entergy Gulf States
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| *(d) 1 - Restated Articles of Incorporation of Entergy Gulf States effective November 17, 1999.
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| Entergy Louisiana (e) 1 - Amended and Restated Articles of Incorporation of Entergy Louisiana effective November 15, "1999(3(d) to Form S-3 in 333-93683).
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| Entergy Mississippi
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| *(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).
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| E-1
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| (3) (ii) By-Laws (a) By-Laws of Entergy Corporation as amended January 29, 1999, and as presently in effect (4.2 to Form S-8 in File No. 333-75097).
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| (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).
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| *(c) - By-Laws of Entergy Arkansas effective November 26, 1999, and as presently in effect.
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| *(d) - By-Laws of Entergy Gulf States effective November 26, 1999, and as presently in effect.
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| (e) - By-Laws of Entergy Louisiana effective November 26, 1999, and as presently in effect (3(b) to Form S-3 in File No. 333-93683).
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| *(f) - By-Laws of Entergy Mississippi effective November 26, 1999, and as presently in effect.
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| (g) - By-Laws of Entergy New Orleans effective November 30, 1999, and as presently in effect (3(b) to Form S-3 in File No. 333-95599).
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| (4) Instruments Defining Rights of Security Holders, Including Indentures Entergy Corporation (a) 1 - See (4)(b) through (4)(g) below for 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.
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| (a) 2 - Credit Agreement, dated as of September 13, 1996, among Entergy Corporation, Entergy Technology Holding Company, the Banks (The Bank of New York, Bank of America NT &
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| 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')
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| (filed as Exhibit 4(a)12 to Form 10-K for the year ended December 31, 1996 in 1-11299).
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| (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).
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| (a) 4 - Guaranty and Acknowledgment Agreement, dated as of October 3, 1996, by . Entergy Corporation to The Bank of New York of certain promissory 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).
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| (a) 5 -- Amendment, dated as of November 21, 1996, to Guaranty and Acknowledgment Agreement by Entergy Corporation to The Bank of New York of certain promissory notes issued by ETHC 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).
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| E-2
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| (a) 6 - Guaranty and Acknowledgment Agreement, dated as of November 21, 1996, by EnterFy Corporation to The Bank of New York of certain promissory notes issued by ETHC m cojnnction with acquisition of Sentry (filed as Exhibit 4(a)16 to Form 10-K for te year ended "Decemnbe 31, 1.996 in 1-1.129p).
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| (a) 7 - inended and Restated Credit Agreement, datd as oDecember 12, ,I96,among Entergy, the n (Bank of America National T Ba The Ch aa Bank, Citibank, NA, iionBank of Switzerland*N ro Bank N.V, The k'cf,Nova Scotia, Cnadian'mIper*ia Bank of Commerce, Ml.e.bon .ank N.A., First NatioNal Bapk of Commerce and Whitney Noaional. Bank) and Citibank N.A., as Agent (filed as.,. a*Exhibit 4(a)17 to Form 10-K for the year ended Dgecber 31, 1996 in 1-191299).
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| System Energy
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| ()I -Mortgage and 'beed of Trust dated as..of, June 15, 1907, ,a's amnended.by. twenty-one Supplemental Indentures, (A-I in 70d5890 (Mo'rtgage); and C to Rule 24 Certificate in 70-5890 (First); B to Rule 24 Ceroficate in 70-62S9 (Second); 20(a)-5.to Forni 1-Q for the quarter end june 30, 1981, in 1-3517 (Third); A-i(e)-1 ta Rule 24'Cert im 70-6985 (Fourth); .'B.o Rule 24 Certificate in 70-7021 .(FiU); B to Rule 24 ce.tiflae in 70-7021 (Sixth); A-3(b) to Rule 24 Certificate in 70-7026 (Seventl);, A-3(b) to Rule 24 Certificate in 70-7158 (Eihth); B to Rule 24 , rtificate in *O-7123 (Ninth); B-1 to Rule 24 24 Certificate in 70-7272 (Te.¢nth); B-2 to ulu 24Ct e in 70-7272 (ElNventh); B-. R Certificate in 70-72 (w2.%), Ir-c i ie
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| .4" to Rule 24 SA=2(c),to Cricae*Rulein2410-1.946 'A-2(d)*to ...-
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| (Sixteenth);Mayk4,,1993 l*`e 2.4 Certifcat in 70-7946
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| " (S'.vente R~ule,24
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| ); A-2'(e)to Certificate**d in 70.=796 (eighteenth); A 2t 1g 24lCerccate dae 994, 70-79466Ien- t=-2' to Rule 24 eri (Tw.eaft) 8 1996 i. File o. 70.-8511 ,(Tw;irieth), andX'=2(a)(2)to Rule 24 Certificate ated-August F in. File No. 70-8511 (Twen ft)) ..
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| .h996 .. ,
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| (b). 2 ,-. Faclty Lease No. 1, dae as of Dechmer 1,: i98*, beye. Meridan TrustCompany and
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| '., .. Stephien M. toC'arta (Steve-n Kaa, succes~or), a5. t0wn.*r. Tnis*, .and,'Sy:,sem Energy
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| .(B2(c)(I) Rule 24 Certificate dated J.nuary 9,1i9894iii 70-7.6!), as.supplemented by "LeseSuppleent No..i.dated as of April" 1989 ;,(1-22(b) G)to Rule24 iflcate dated April 21, 1989 in 70-7561) and LeaseySupplement No. 2 dated as of Jan7 Eyg,1 t994 (B-3(d) to Rule 24 Certificate dated January 31, 1994 in 70-8215).
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| (b) 3 .- : Facility L*ae NQ,. 2, date as of Dec¢embe~r (, i.i988 bet .een Meridian Trust Company and SStephen M. .Ca, a (.St~ven Kaba, suecessor), as Ownier .T.is*,s a,-Sygem Energy (B-2(7)(2) to Rule 24 Certificate dtedJanuary9, 1989in 70-1561), as supplemented by Lease Supplement No. dted as of April1, 19*95f1cate (B-22(b),(2) to Rule 24 C.e dated
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| *. 1989 in 70-7561)
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| April 21,Certificate and .Lease Supplemento. 2o.dated ~as. of Januaryrl .~1994 (1B-4((t)
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| Rule24 dated January 31, 1994 in 70-8215).
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| lF) 4 - 4Indenture (for Unsecured Debt, Securmtes), datedas of Septemw er 1, 1995, between System Energy Rlsources, Inc.,"and Chemical Bank (B-,O(a) to Rule 24 CC. ertifict 70-8511).
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| E-3
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| Entrgy Arkansas -. ', 4 (c) 1 Mortgagb and Deed of Trust, dated as of October ,. 1944, as a d by:fifty-fourth Supplemental Indentures (7(d) in 2-5463 (Mortgage), '(b) in 2-71i1 in 2-7605 lFr),7(c)
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| (Second); 7(d) in 2-8100 (Third); 7(a)-4 in 2-8482 (fourth); 7(a)-5 in 2-9149 (Ffth); 4(a)-6 in 2-9789 '(s*h); 4(a)ý in 2-10261 (Seventh); 4(a)-8 in2-11043 (Eghth)* *(I* n 2-11468 (Ninth); 2(1)-10 in 2-15767 -(Ten;D i 7O-3952 (*E l th); 61Wfkh),
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| ) m70499 4(d) in 2-23185'T th); 2(c) 2-24414 (Fu*t ); 2(e) in 2-2'9.3 (Fibeth), 2(c) in 2-28869 (Sixteenth); 2(d) ini 2-28869 (Se§n6 t ;2(c) in 2-351%..(Eg hteegth), 2(d) in 2-36646 (Ne e).2(c)iii.2-39253 (Twenteth); 2!c) in 2-1608'.t61y- first); C-1 to Rule 24 Cerýficatn 70-5151 (TWenty-second); C-I to Rule 24 Certifi e in 70-5257 (Twenty-third); C to Rule24 Certificate in 70-5343 (Twenty-fourth); C-1 to Rule 24 Certificate in 70-5404 (Twenty-fifth); C to Rule 24 Certificate in 70-5502 (Twe ixth)f C-I) to Rule 24 Certificate in 70-5556 (Twenty-seventh); C-1 to Rulety-intl); 24 Certificate in 70-5693 (Tw :-eigh)th);" C-I to Rule 241 Cert**ifica...n70-6078. . -. to Rule 21f Certificate in 70-6174 (Thirtieth); C-I to Rule24 Cerflvate 'in 70-62.6 it-6.st), C-i to Ruln24 Certidct in 70-6498"h -seoda); A-4b-2 to .-Rule* , 4* &6cate in 70-6326 (Tir-third); C-1 to Rule 24. Certcate in' Q0-6607 id-; to Rule 24 Certificate in 70-6650 Chtifth);. C-1 to Rule24.Cefca, 46D2_4 1982, in 70-6774 ( Ltsixth); C-I 'to Rule'24 Certi te, datd1ebr 11, )r83,.in 70-6774 irty seventh); A-2(a.) t Rule 24 Cerl , daidDecember 5, in 70-6858
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| ' ".984 y-eighth); A-3(a)"to Rule 24. Ceifit -iix nit), '70-7127A-7 to Rule 24 Ceitifite iin' 70-7068' (Foreth), A-8t). io Rxle 24 Certificate Jul 6, 989 in 70-7346 So0rty-fir*j;. A4Q( ) f1lel24 Certificate,. daQ 34, 1, 1990 ikQ3O46 (Forty-second);..
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| 4 4to'*Form t-( r ti& qartended SePteber i14,74 t-th.' t90i ); A-2(a) to "RuleA4Certificate, dated N er 30, 1990, mi 70-7802 (Forty-,fo dret );2(b)to Rule 24.
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| C~e* , ated January 24,. '1991? i 70-1*0* Fo*yith), 4.. I)
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| .. 33-54298
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| .. (Foty-sixth);4(c'(to Form 10-I~f& the(2eddD V6 r 1'9 'i4I40764 (Forty seventh); 4(b) io6 16nt 10-Q for the quarter: nided" June6'rI'93*i' 30; 1t)-1 iý (Forty-eighth);
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| 4(c) to Form 10-Q for the rr ended June 30, 1993 in 1-10764 (Forty-nin.h); 4(b) to Fo.ni.
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| " i0-( for theuri ended1S*t*e0mber 30, 1" iii 1-10764 (Mifdeth): 40c)i6 Fom IO -Q f, the quarter de dS*teber 30, 993 in '1-107614(F -st);. 4(a) to M in' O-Q for the qut..erende*d Ji"e 30, 1994 '(Fity-secon1l); C-2_ to, F0.bi for `J5S the! year ended Decm*ber 31, 1995' (lifty-,iWrd); and C-2(a) to Fo&rm 5S.:for )i*SeededW December 31, 1996'(Fifty-fourth)).
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| (c) 2 - Indenture for Unsecured Subordinated Debt Securities relating to Trust Securities between Enetny Arkansas and Bank of Ne York (u Trustee), d as fAgust I, 1996 (eeda "Exhib[tA-l() ýo 1u1e 24CertificatodatedAugust ý6, 1996 inFile o08'123).
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| (A) 3 - .itnded
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| # and Restated Trust Agreemenit otfEntergy Arkansa CAIta1I, dated. of August 14, 1906 (filed as Exhibit A-3(a)'to Rule 24 Certificate dated August 26, 1996 in File No. 70 8723).
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| (c) 4 - Guarantee Agrement between Eitergy A*ahsas (as Guarant6r) and The Bank 'f Ne,. York (is Trustee), dated as of kiiist 14," 1996, wit* r tEnter Arkansa S Capital I's obligations on its 8 1/2% Cumulative Quarterly Income Preferred Securities, Series A (filed as Exhibit A-4(a) to Rule 24 Certificate dated August 26, 1996 in File No. 70-8723).
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| E4
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| Entergy, Gulf States (d). 1- Indenture of Mqrtgage, dated September 1, 1926, as amended by pertain Supplemental
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| 'Indentures (*-a-i-1 m Registrtion No. 2-2449 (Mortgage); 7-A-9 in.Registration No. 2-6893 (Seventh); to orm 8-K dated September 1, 1959 (Eightent); B to Form 8-K dated F r, ar1 , 1966 (Twenty-seeond); B to Form 8-K datedMarch 1, 1967 (twent-hird); C to "F*rnn S-K dated March 1, 1968, (Twenty-fourth), B to Form 8-K ." November 1, 1968 Twen.ty-fifth), 13- FormS8-K d April ,1969 (T-4); 2-A- nRgitration No.
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| 2-66612 (Thirty- t); 4-2 to Form 10-K ft ear ended Dee 31 1984 in 1-2703 (I~ory-eighth);.. 2 to Form 10-Kfor .tmh,yer ended Dwe .r31,, 1988 in 1-2703 (Fifty
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| -second);.4 to Form 10for.the year ended Decmber 31, 19 .in. 1-2703 (Fifty-third); 4 to For'. 8-K dated July,29,1j992-in 1-2703 (fifth-our!h); 4 tRqrm 10-K dated December 31,
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| -19 i 1-V3 (Fifty-fif th); 4 to Form 1",Q fr th urter endqd March 31, 1993 in 1-2703
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| .... ,(Fifty-sixh);.2 toA-nen~meat No, 9 to Restaon No. ý-,765.51 (Fifty-seventh); and 4(b) tojqn 10-2 I forthe quarter ended. M 31,1999 in 1-2703 .1 fty-*'ghth)).
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| (d) 2 - netrdtdMrh21, 1939;' ac ptig egnation of Th4e Cjiae National -Bank of the City, of New York as trustee and appqinfingCeta Hanover Bank-,:and Trust Company as
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| . succe"Prtruste (B-a-1-6 Registr NO 24076).
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| (d) 3 - Trust Indenture for 9.72% Debentures due July 1, 1998(4 in Registration No. 33-40113).
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| (d) 4 . Indenture forU~nsecured SubordinatedDebt S eunte re~lating tTrust Sec , dated as of January 15, 1997 (filed as Exhibit A-I 1(a) to Rule 24 Certificate dated February 6, 1997 in
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| ]ie No. 70-8721),,
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| (d) 5 Amended and Restated Trust Agrement of Entergy 6u States Capital I dated January 28,
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| ,1997 of Series A Prefoned Securities (filed as Exhibit A-13(a) to Rule 24 Certificate dated
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| ,Febrnu*ya6,.1997inFile No. 70-8721).
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| (d) 6 Guarantee Agreement be :EntergyG4If States, Inc. (as Guaranýto ./.The.Bank of New York (as Trutpe dated as of January 28, 1997wi r to Entergy: Sta Capital I's obligation onits 8.75% Cumulative Quarterly Income Preferred Securitis,,Serfies A (filed as Exhibit A-14(a) to Rule 24 Certificate dated February 6, 1997 in File No. 70-872 1).
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| Entergy Louisiana (e) 1 - Mortgage and Deed of Trust, dated as of April 1, 1944, as amended by fifty-four
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| .Supplemental Indentures (7(d) in 2-5317 (Mortpge); 7(b)in .2-,7408 (Fi s); 7(c) in 2-8636
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| "(Second);4(b)-3 in 2-10412 (Tir 4(b)-4 in 2-12264 (Fourh); 2(b)-. in .- 1,2936 (Fifth);
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| D in 70-3862 (Sixth); .2(b)-7 in 2-22340 (Seventh); 2(c) in. 2-,24429 (Eighth); 4(c)-9 in 2-25801 (Ninth); 4(c)-10 in 2-26911 ý(Teenth); 2(c) in 2-28123 (Eleventh);.2() in 2-34659 (Twelfth); C to Rule 24 Certificate in 70-4793 (Thirteenth); 2(b)-2 in 2-38378 (Fourteenth);
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| 2(b)-2 in 2-39437 (Fifteenth); 2(b)-2 in 2-42523 (Sixteenth); C to Rule.24 Certificate in 70-5242 (Seventeenth); C to Rule 24 Certificate in 70-5330 (Eighteenth); C-I to Rule 24 Certificate in 70-5449 (Nineteenth); C-1. to Rule 24 Certificate .in70-555Q (Twentieth); A-6(a) to Rule 24 Certificate in 70-5598 ,(Twenty-first); .C-1 to Rule.24 Certificate. in 70-5711 (Twenty-second); C-I to Rule 24 Certificate in 70-59919 (Twenty-third); C-1 to Rule 24 Certificate in 70-6102 (Twenty-fourth);. C- to Rule 24 Certificate in 70-6169 (Twenty-fifth);
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| C- .to Rule 24 Certificate in 70-6278 (Twenty-sixth); C-1 to Rule.q24 Certificate in 70-6355 E-5
| |
| | |
| (Twenty-seventh); C-I to Rule 24 Certificate in 70-6508 (Twenty-eighth); C-i to Rule 24 (Thirtieth); C-i Certificate in 70-6556 (Twenty-ninth); C-1 to Rule 24 Certificate in 70-6635 to Rule24. Certificate in 70-6886 to RUle 24 Certificate in 70-6834 (Thirty-fi*st; C-I (bfirty-se d); C-I to Rule 24 Certificate in 70-6993 (I-b ird); C-2 -to Rule 24 (Thirty-fifth);
| |
| C"rtificatiin 70-6993 rIrty-fourth); C-3 to Rile 24 Certificate in:70-6993 A-2(a) to Rule 24 Cieiificate iný 70-1166 (Thirty-sixth); A-2(a) ii 70-7226 (i-sventh);
| |
| Form 10-Q C-i to Riule 24 Certificate in 70-7270 (Thirty-eighdi); 4(a) to Quarterly Reiort db Rule'24 Certificate in for the quarter eiided Jun&30, 1998, in 1-8474"(hr-ninth);-A-(b) to to Rule 24 70-7553 (Poi*) A-2(d), 'Rule 24 Certificate, in:70-7553 (F6rty-first); A-3(a)
| |
| A-3(b) to Rule 24 Certificate in 70-7822 (Forty-third);
| |
| Certificate in 70-7.22 (Forty-second);
| |
| A-2(i) to Rule !4&rtificate *in e No. 70-7822 (Forty-f6**rth); A-3(d) to Rule 24 Certificate in70-7822X(FortytAh); A-2(ý) to Wtled4 Certificate at April 7,21993 in 704822 (Forty to sixth), A-3(d) toRe 24 Certificame dati" June 4, 1993 i70-7822 (Forth-svi); A-3(e)
| |
| "Rule24 Ceriificiat dated De* 'h2,1993 in 70-7822 (Forty-eighth); A-3(f)"to Rule 24 dated Certificat dated August 1, 994 in -7822 (Forty-ninth); A-4(6) to Rule 24 Crfificate 70 to Rule 24 Certificate dated April 4, 1996 in September 28, 1994 in 70-7653 (Fiftieth); A-2(a)
| |
| ' 0-8497 (Fifty-first); A-2(a) to Rule: 24 Certificate dated April 3, 198 in File No.
| |
| "F&16e.
| |
| 70-9141 7'(Fifr-Second);'AW2(b)t0 Rule 24 Ceicate dated April 9, 1999 in File No. 70-9141 (Fifty-third); and A-3(a) to Rule '24 Certificate dated July 6, 1999 in FileNo. 70'-9141 (Fifty fourth)).
| |
| 2 Facility Lease No. 1, dated as of September 1, 1989, between First National Bank of (e) --
| |
| tr**gy Louisiana (4(c)-I in Regisation No. ý3-30660).
| |
| C.. c , as Owne Trse, n Bank of (e) 3 -- Facility Lease No. 2, dated as of September 1, 1989, betweeiw First National 33-30660).
| |
| Commerce, as Owner Trustee, and Entergy Louisiana (4(c)-2 in Registration No.
| |
| Bank of (e) 4 -" Facility Lease No. 3, dated as of September 1, .1989, bet*wen First National in 'Rgistration No. 33-30660).
| |
| Commerce, as Owner Trustee, and Entergy Louisiana (4(c)-3 (e) :~5 Indenttire.for t~tsecUred Subordinated Debt Securitieg relating toTrust Securities, dated'as of IJuly 1,496 (filed as Et bit Aý-14(a)"to Rule 24 Certificate dated July 25, 1996 in File No.
| |
| July 16, 1996 of (e) 6 - Amended and Restated Trust Agreement of Entergy Louisiana Capital I dated Series A Preferred Securities (filed as Exhibit A-16(a) to Rule 24 Certificate dated July 25, 1996 in File No. 70-8487).
| |
| of New (e) 7 '- Guaraintee Agreement between Entergy Louisiana, Inc. (as Guarantor) and The Bank Capital I's York (as TrVste dated as of July 16, 1996.with respect to Entergy Louisiana (filed as 0bligationdoif its 9% Cumulative Quarterly Income Preferred Securities, Series A Exhibit A-19(a) to Rule 24 Certificatedated July 25, 1996'in File No. 70-8487).
| |
| Entergy Mississippi fourteen (f) 1 - Mortgage and Deed 'of Trust, dated as of February 1, 1988, as amended by A-2(b)-2 in Supplemental Indentures (A-2(a)-2 toRule 24 Certificate in 70-7461 (Mortgage);
| |
| Rule24 70-7461 (First); AK5(b) to Rule 24 Certificate in 70-7419 (Second); A-4(b) to in 70-7737 (Fourth); A-2(b) to Certificate in 70-7554 (Third); A-l(b)-I to Rule 24 Certificate to Rule 24 Certificate Rule 24 Certificate dated November 24, 1992 in 70-7914 (Fifth); A-2(e)
| |
| E-6
| |
| | |
| dated, January 22, 1993 in 70-79 14 (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-2(j) to Rule 24 Certificate dated July 22, 1994 in 70-7914 (Ninth); (A-2(l) to Rule 24 Certificate dated April 21, 1995 in Flde 70-7914 (Tenth); A-2(a)' to Rule 24 :Certificate dated iune 27, 1997 in 'File 70-8719 (Eleventh); A-2(b) to Rule' 24 Certificate -dated April 16, 1998 in: File 70-8719 (Twelfth); A-2(c) to Rule 24 Certificate dated May, 12, 1999 in File No. 70-8719 (Thirteenth);
| |
| A-3(a) o Rule 24 Certificate td June 8; 1999"in File No. 70-8719 (Fourteenth); and A-2(d) to Rule 24 Certificate dated February 24, 2000 in File No. 70-8719 (Fifteenth)).
| |
| Entergy Newv Orleans (g) 1 - Mortgage and Deed of Trust, dated as of May 1, 1987, as amended by seven Supplemental "Indentures(A-2(c) to Rule 24Ceticin 70-7350 (Mortgage); A-5(b) to Rtile 24 Certificate "in70-7350 (First); A-4(b) to Rule 24 Certificate ii 70-7448 (Seond); 4(f)4 to Form 10-K for tyear ended December 31, 1992 in 0-5807 (Third); 4(a) to Form 10-Q for the quarter ended September 30, 1993 i'M 0-580701ouith), 4(a) to Form 8-K dated April26, 1995 in File No 0 5807 (Fifth); 4(a) to Form 8-K dated' March 22, 1096 in File No" 0-5807 (Sixth); and 4(b) to Form 10-Q for the quarter ended June 30, 1998 in 0-5807 (Seventh)).
| |
| (10) Material Contracts Entergy Corpbratin.
| |
| (a) 1 - Agreement, dated April 23, 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 e ded December 31, 1982, in-1-3517).
| |
| (a) 2 - Middle South Utilities (now' Entergy Corporation) 'System Agency, Agreement, dated December 11, 1970 (5(a)-2 in 2-41080).
| |
| (a) 3 - AmAnent, dated February 10, 1971, to Middle South Utilities System Agency Agreement, 4 0 80 dated December 11, 1970 (5(ay4 in2- 1 ).
| |
| (a) 4 - Amidment, dated May 12, 1988, to Middle South Utilities System Agency Agreement, dated t*etiber 11, 1970 (5(a)-4 in 2-41080).
| |
| (a) 5 - Middle South Utilities System Agency Coordination Agreement, dated December 11, 1970 (5()-3: in 241080).
| |
| (a) 6 - Service Agreement with Entergy Services, dated as of April 1-,; 1963 (5(a)-5 in* -41080).
| |
| (a)" 7 - Amenident, dated January 1, 1972, to Service Agreement with Entergy'Services (5(a)-6 in 2-43175).
| |
| (a) 8 - Amendment, dated April 27, 1984, to Service Agreement with Entergy Services (10(a)-7 to Form 10-K for the year ended December 31, 1984, in 1-3517).
| |
| (a) 9 -- Amendment, dated August 1, 1988, to Service Agreement with Entergy Services (10(a)-8 to Form 10-K for the year ended December 31, 1988, in 1-3517).
| |
| E-7
| |
| | |
| Entergy Services (10(a)-9 to
| |
| ()10- Amendznent, dated January. 1, 1991, to Se-vice Agreement with
| |
| -A-' Form10-Kfor the yea enebecembe 31, 1990, in 1-3517).
| |
| (a)11 Aendent
| |
| - daed anury , 192,toService Agreeent fitEr~erg Services (10(a)-il for
| |
| * . ~the yearendled Pqcember 31,.1994 in 131)
| |
| - Aremeit dtedJue 1~194,aogSsm Energy and,certain other System Aaiabliy comipanie4 (Bi toý Rule 24 Certificate, dated June, 24, 1974, in 7059) 1o RuIe24 (a) 13- First Amendment to Availability Agreement, dated as of June,30, 1977..(B Ce~rtificate, dated June, 24, 1977, in 70-5399).
| |
| 24 (a)Am14dmentnd to Avaiability Agreement, dated as of June 15,. 1991 (E to Rule Cetfctea)e, il , i81 in 70-659)
| |
| (a) 15-Third mep ~OO Availability Ag =eent, atdas of June 28, 194'0--fP(a) to Rule 24
| |
| ~r tq~ct, dated Miy. 6, 1~,i 06~)
| |
| 1989 (A to Rule 24 (a) 16- Fourth Amendment'to A~vailability Agreement, dated as, of June 1, Certificate, dated June 8, 1989, in 70-5399).
| |
| (a) 17- Eighteenth Assignment -Of Availability Agreement, Consent York and Agremet dated as of September 1, 1986, with United States Trust Company Of New and deýad Fr Ganey, as
| |
| - Tristes ((-2 p Rule 24 Certificate, -dated October 1, 1986, iu 70-77)
| |
| (a) 18 - Nineteenth Assignment of Availability Agreement,CosnadAgeietdtdasf September 1, 1986, with United States Trust Company1986, of New York and Genird F. Ganey, as
| |
| ,.Tusee (-3to Rule,24 Certificae dae coe, in 70-727-2)...
| |
| dated as of (a) 19 - Twenty-sixth Assignment of Availability Agreement, Consent and Agreement, ,-Gerard F. Ganey, as Octber1, 1992, with UntdSae Trust Company of New yqrk an Trustees (B-2(c) to Rule 24 Certificate, dae Noeme 2, 12, inP 7- (407.
| |
| (a)~Q Asinmpt o AailbiltyAgrpezet, Consent, and Agreement, dated as -Of AT~wntyse~ntk anya Apr IlR. 1, 1.I.993, with United State Trust Company of New, York and (0rrdF Trustees (B-2(d) to Rule 24 Certificate dated .May 4, 1993 in 70-7946).
| |
| Twenty-ninth Assignment Of Availability Agreement, Consent and Agreen~ent, F.dated as of (a) 21- and (icird Ganey as April 1, 1994, with United States Trust Company of New York A Trstee (B2(fto Rule 24 Certificate dated May 6, 1994, in 70-7946).
| |
| T dae of_
| |
| (a) 22- . Thirtiet AssgnmntOf Availability Areint.Consent alld ,gemet August 1, 1996, among System Energy, Entergy Arkansas, Entergy Louisiana,Etey York and Mississippi and Entergy New Orleans, and United States Trust ComIPany Of New dated August 8, Gerard F., Ganey, as Trustees(filed as Exhibit B-2(a) to Rule 24 Certificate 1996 in File No. 71O-8511D.
| |
| (a) 23 -- Thirty-first. Assignment of Availability Agreement, Arkansas, Consent and Agreement, dated as of August 1, 1996,,,amnong System Energy,. Entergy Entergy Louisiana, Entergy of New York and Mississippi, and EntergY New Orleans, and United States Trust Company E-8
| |
| | |
| .Grard F.ý..aney, as. rustees (filed as Exhibit B-2(b) to Rule 24 Certificate dat August 8, 1996 inkFileNo. 70-4511).
| |
| (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 :utergy New .rleaus, and The Chas. Manhattan Bank (filed as Exhibit S: :B.2(a) to Rule 24 Certificate dated:January 13, 1997 in File No..70-7561).
| |
| (a) 25- Thirty-third Assignment of Availability Agreement, Consent and Agreement, dated as of
| |
| ,Decembber.20,j1999Mamong System .eArgy,* Entery.,Arkansas, Entergy Louisiana, Entergy Mis issippi,ýand Entergy New Orleans, and The Chaej :Manhattan., Bank (filed as Exhibit B-2(b) te-Rule 24 Certificate dated March 3, 2000 in File No. 70-7561).
| |
| (a) 26- June 21, 1974, between Entergy Corporation and System Capital Funds Agreement, dated dated June 244 1974,in 70-5399).
| |
| Fmergy.
| |
| S.: -..
| |
| , ]
| |
| (C*....to Rule 24 Certificate, tificat. . . 74 i.n 70.
| |
| ,19*,-. ..
| |
| .(a) 27- First Ame.ndmnt to Capital Funds Agreement, dated as of Juno 1, 1989: (B to Rule 24 Certificate, dated June 8, 1989, in 70-5399).
| |
| (a). 28- .Eighteenth .S. plem Cpt .unds gentary and Assignment, dated as...of ge September I; 19.S6, withUnited St.ats Trust Compamy o£New York and Gerard F. Ganey, as Trustees (D-2 to Rule 24 Certifl"ate, dated October J, 1986, in 70-72.72).
| |
| :(a) *9 .-- Nineteenth SlIpplementa Capital Funds Agr and Assignment,.dated as of September 1, 1986, with United States Trust Company of New York m levard F. Ganey, as Trustees (D-3 to Rule 24 Certificate, dated October 1, 1986, in 70-7272).
| |
| .:,1992, .(3.o0 ,..Tweq.ty.jsixth Siupplemetary.-
| |
| wit.United capital States Trust Funds Agreement and Assignment, dated as of October Company of New York and Gerard F.oaney, as Trustees (B-3(c) to Rule 24 CertificatdNovember 2, 1992i *70-7946).
| |
| ..(a), ::: 1-.,:Twenty-seventh Suppl.ementar Capital Funds Agreement and Assigenmt dat*d as .ofApril: 1, 1993, with United State Trust Company of New York and Gerard F. (3any,.as Trustees (B 3(d) to Rule 24 Certificate dated May 4, 1993 in 70-7946).
| |
| (a) 32- Twenty-nith SupplIment ry 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).
| |
| (a) 33 - W iztieth Supplement4rCapitalFunds Agreent and Assignmet, dated as of August 1, 1996, among Entergy CorphrationSystem Energy and Unt.dStates Trust Company of New York and Gerard F. Ganey, as Trustees (filed as Exhibit B-3(a) to Rule 24 Certifict dated 3)o.2C,.a..dAaugust 8, 19964 i7FileNo9704851!).
| |
| (a) 34- Thirty-first Supplementary Capital Funds Agreement and Assignment, dated as of August 1, 1996, among Entergy Corporation, System Energy and United States Trust Company of.New York and Gerard F. Gancy, asTrustees (filed as Exhibit B-3(b) to Rule 24 Certificate dated August 8, 1996 in File No. 70-8511).
| |
| E-9
| |
| | |
| (a) 35- Thirty-second Supplementary Capital Funds: Agreement and Assigment, dated as of December 27, 1996, among Entergy Corporation, System Energy and The Chase Manhattan Bank (filed as Exhibit B-l(a) to Rule 24 Certificate dated January 13, 1997 in File No.
| |
| 70-7561).
| |
| (a) .36- Thirty-third Supplementary Capital Funds Agreement andAsignment;,dated as of December 20, 1999,1 among Entergy Corporation,' System Energy and The'Chase Manhattan Bank (filed as Exhibit B-3(b) to Rule 24 Certificate dated March 3, 2000 in File No. 70-7561).
| |
| (a). 37- First Amendihent to Supplementary Capital Funds Agreements and!Assignments, dated as of
| |
| .,June "1;, 1989, by and between Entergy. Corporation;, Sysem .Energy, Deposit Guaranty National Bank, United States Trust Company of New York and Gerard, F: Ganey (C to Rule 24 Certificate, dated June 8, 1989, in 70-7026).
| |
| (a) 38- First Amendment io Suppleinfetary Capital Funds Agreements and Assignments, dated as of June 1, 1989, by and between Entergy Corporation, System Energy, United States Trust Companyi of New York and Gerard F. (Ganey'(Cto Rule 24 Certificate, dated June 8, 1989, in 70-7123).
| |
| (a) First Amendinent to Supplementary Capital Funds Agreement. and Assignment, dated as of "June l,'1989, by and betwenwEntergy Corpotatioi, System Energy'and Chemical Bank (C to Rule 24 Certifite, dated June 8, 1989, in 704*56) ".
| |
| '(a) 40- Reallocation Ageent,datedas of July;282 I98l, amongSy .Energy and certain other Systemncomnpanies'(B1l(a) in 70-6624).
| |
| (a) 41- Joint Construction, Acquisition and Ownership Agreement, dated as of May 1, 1980, between Syst6m Energy-and SMEPA0(B-(a) in 70-6337), ag amended by Amendment No. 1, dated as of'May 1, 1980 (B*-(c)in 70-6337) and AmendmeftN&..2j daeas of October 31, 1980 (1 to Rule.24 Certificate, dated October 30, 1981, in:70-6337).
| |
| (a)"'42 Opdrating Agreent dated as :f May- 1,' 1980, between. System Energy and SMEPA (B(2)(a)
| |
| -' . in 70-6337)..".'
| |
| (a) 43 - Assignment, Assumption and Further Agreement No. 1, dated as of December 1, 1988, among System Energy,;:MeidiamTrust Company and Stephen M. Caifa,tand SMEPA (B-7(c)(1) to Rule 24'Certificate, dated January 9, 1989, in70-7561).-
| |
| (a) 44- Assignment, Assumption and Further Agreement No. 2, dated as of December 1, 1988, among Syntem Energy, Meridian Trust Company and Stephen, M. Carta, and SMEPA (B-7(c)(2) to Rule 24 Certificate,. dated January 9, 1989, in 70-7561).
| |
| (a) 45 - Substitute Power Agreement, dated as of May 1, 1980, among Entergy Mississippi, System Energy and SMEPA (B(3)(a) in 70-6337).
| |
| (a) 46 -Grand Gulf Unit No. 2 Supplementary Agreement,. dated as of February 7, 1986, between System Energy and SMEPA'(10(aaa) in 33-4033>).
| |
| (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) 48 ptusjiRtirezaienr Plan (1(a.)37Vt6 ;foi 10-lKf-r' the:r ea n e ber 31, 1983, in 1-3517).
| |
| t SystteflEnrey and Ent&g (a) 49- Unit ýoerEntergy Sfieilgreemidnt, dO s'sof nune 10, 1982, between ntt ry New Orleans (10(a)- 3 9 to Arkansas, 'Lolilsi~ai, Etitergy Mississipji ah Form 10-K fbr the year ended December 31, 1982, in 1-3517).
| |
| *(a) 50- First Amendment to Unit Power Sales Areement, dated as of jie 28, 1984, between System Energy and EafterWArkansas, Entergy Louisiana, Entergy Mississippi and.Entergy New 66 "1"(rf .. ..I Q fortte q ded " te "01-41984i euaft " 1 517).
| |
| Ii1-3" (a) 51 - Revised Unit Power Sales Agreement (10(ss) in 33-4033).
| |
| (a) 52- Middle Sdd& Utilities I=d.and S-tbsi Coiiwaziies Ti0ermpa* o'Tax Allocation Agreement, dated April 28, 1988 (Exhibit D-lto Form U5S for the year ended Decetqber3 1,
| |
| ' 1987) '. ....... ...............
| |
| (a) 53- First Am=hnent, dated January 1, 1990, to the Middle South Utilities Inc. and Subsidiay Cbýa eie1te mpýn bcmd Tax ilocafibn A~het()2to' Trbiit or&kle year ended December 31, 1989).
| |
| (a) 54- seccki JSýuh9,.iary Companies Intercompany Income Tax Allcai greenent(D-3 to iMin UVS for the year ended December 31, 1992)...
| |
| (a) 55- Third Amendment dated January 1, 1994 to Enteigy Corporaton andSubsidkiy Companes Intercompany Income Tax Allocation At (D-3(a) to Form U.5S for the year ended (a) 56- Fourth Amendment dated April 1, 1997 to Entergy Corporation and Subsidipxy Companies kf nt 9 'Inicbri Ta 'Alk--,i Mtsivt~ ..A~r * .
| |
| * ent-
| |
| :* (0-5
| |
| " ',t'o Fim~5
| |
| "*) *'*; .,. o , year ended December 31, 1996). "
| |
| Ara-t 6`AqAebetween.Eiitergy Co ioration and Enter .gy 'A*fsak dated as of (a) 57-September 20,19900-1(a) toile 2i$ Certifiate, d Sep"temer 27, 1'99, m70-7757).
| |
| (a) 58 66 - AAua" ni'. " .eEnt& c" e "t Corporation and Et- d 6f-"
| |
| Sp ber 20, 19900 (B-2(a)rto RuM6 24 Certifite, dated Sepifmber27 91990n 70-7757).
| |
| (a) 59- Guarantee Agreement. between Entergy Corporation and System E.nergy dtdas of Septeabf-Ž','190 (B=4(4 to Rilld`4 Cettifi.ae, dated.Sei br 27, '1990, in,70 757).
| |
| (a) 6 Loan Agreement between Entergy Operations and Entergy Corporation, dated as of Selitanee'.20, 1900 (B-12(b)-tb Rule 24 Certificateidated-Juhe 153 1990,-in 70-7679)Y (a) 61- Loan Agreement between Entergy Power and Entergy Corporat"on, dated as of August 28, 1990 (A-4()to Rle 24 Certifile dated Septembei 6, 1990, in 704684).
| |
| E-1I
| |
| | |
| (a) 62- Lan, i be ennergCor any z, d Ser I. dated as of Decembr 29, 1992 (A-4(b) to Rule 24 Certificate in 70-7947).
| |
| +(a) 64- Etergy Corporation Annual Iunmtive Plan (10(a) 54 to Form 10-K fOr the year ended December 31, p49,in 1,3517)...
| |
| +(a) 65 - Eqity Ow~s~ lnOf _peryC~orpaton anl -Siibsdiasjim.(4-4( to Rule 24 Certificate, dated May 24, 1991, 0 70-9831).
| |
| +(a) 66- Amendment No. 1 to the Equity Ownership Plan of Eteg Corporation an Subsidiaries
| |
| -- Kfor die.year endedo 31, 1992,n -I--17). .
| |
| +(a) 67 - 1998 Equity Ownership Plan of Entey Corporation and Subsidiaries (F"ed,.with the Proxy Statemet dated March 30, 199S).
| |
| +Na)*8-- R ,,Outsid&I ri.Ben*efi.*Plan (10(a)63 to F?= 10-K. .f*r, -th yq .e ded Decenmbr 1, 1991, in 1-3517). *,. .
| |
| .',+rae.e.t
| |
| " * .weqp ,+,,rg, .C~poralion and.Jer.y.D..j) c,;O (10(.) 67 t Form 1Q-K fort.t yea... ....... b. "c 1,1992"n1-3l7. " ,
| |
| * N(a) 70- Supplemental i.13517).,, Retirement Plan (10(a) 69 to Form 10-K for tie year ended December 31, 1992
| |
| +(a) 71- Defin4 Contribution Restomation Plan of Entrgy Corporationiand Subsiar (10(a)53 to Form 10-K for the year ended December 31, 1989 in 1-3517).
| |
| Dis~~ity Pln of Eu~r~y Copd 72-Execi~tvs d Subsjfi*ae Ai~ 1~)7 pFr 10-Kfo th.+(a)year bdecý 31, 1992 in 1-3517).
| |
| Na)'3-
| |
| , tQ~kl~nfcuOutside.Directors 7_4tt:For~ 1p*Kfor heyarwleec (q9tportonadSb4as.
| |
| of EnteW~ev*,,992,in 1-3517),-.: -. :mndd(0a
| |
| -:(a) 74-._ Agee* and Plan.of Rognztcm Bcw* Eno* .Corpo~aon..l*u*.-States U"_*ti.'.+s
| |
| '': .,oflpany, 74 IQN A9 caied .J.ne 5, 1992. (1 ~t0 Cur tcpqr on. Form, 8-K dated.,j.une 5, 1992 in 1-3517).
| |
| AmFndmeut Cnruo..tai .f ...... .... and Subsidiaies (10(a) 81 to Form 10-K for'the year ended December 31, 1993 in 1-1 1299).
| |
| "N',-(a) 76 .- .. te Executiv. 1*etp"rt Plan (of(a) 82to Form.-IOTK, 1pt ye ded DecemEber 31, 1993 in 1-19299).
| |
| 4(a 75'7- Jerr L.fO ' Reirement Lettere (40(a)77 to FonxU for the year ien December 31, 1998 in 1-11299).
| |
| E-12
| |
| | |
| +(a) 78- Letter of lntet regarding the Employment of Wayne Leonard (10-(a)78 to Form 10-K for the year ended December 31, 1998!in 1-11299).
| |
| ,:+(a) 794 Letter: te John .,Wilder ofring Employrnmt,,(i0(b)62-,to, Form 10K- for the year ended "Diember31, 1908 in 1-9067).
| |
| *+(a)80- Agreement between Entergy Corporation and Donald C. Hintz effective July 29, 1999 System Erj (b) I through (b) 14-- See:10(a)-l2through 10(a)-25 above. .
| |
| (b) 15t g*- .. :
| |
| (b) 289- Ser 10(a)-26 thkough 10(a)-39'above.
| |
| :*(b). 29- - :;R ocation Agreemet, dated as of July 28, 11981, among System E=ergy and certain other System companies (B-l(a) in 70-6624) "
| |
| (b) . JointrConstruction, Acquisitinam Ownership-Agre dated .as of May 1; 1980, between System Energy and SMEPA (B-l(a) in 70-6337), as aAdd by Amendment No. 1, dated as of May 1, 1980 (B-1(c) in 70-6337) and AmendmaetNo. 2, dated as of October 31, 1980 (1 to Rule 24Cetificate datcdOctober30,'1981,in70.63374)...-
| |
| (b) 31- Operating Agreement, dated as of May 1,1980, between System Ehergy and SMEPA (B(2Xa) in 70-6337).
| |
| (b) 32- :Ammded an*d.Rtated instafllmet Sale.Agreement, dated as of Fcbruary 15, 1996, between a System Energy lnd Claado- I County;, Missiwipoi (filed as Exhibit Bl6(a) to Rule 24 Certificate dated March 4, 1996 in 70-85 11).
| |
| (b) 33- Loan Agreement, dated as of October 15, 1998, between System Energy and Mississippi Business Finance:Corpoiation ("-6(b) to Rule 24 CArtificate dated November 12,: 1998 in
| |
| :70-95 11).
| |
| (b) Loan Agfreemt, dated as of May 15, 1999, betWeen System Eane-g nd Mississippi Business Finance Corporation (B-6(c) to Rule 24 Certificat ilated June 8, 1999in 70-8511).
| |
| (b) 35 - Facility Lease No. 1, dated as of December 1, 1988, between Meridian Trust Company and Stephen.M,.: Cata (Stephen I.,,Kaba, successor), as Owner Trustees, and:, System Energy (B-2(c)(1) to Rule 24 Certificate dated January9, 1989 in 70-7561), as supplemented by Lease Supplement No. I dated as of April 1, 1989 (B-22(b) (1) to Rule 24 Certificate dated April'21, 1989 in 70-7561) and Lease Supplement No. 2 dated-as of Januarkyl, 1994 (B-3(d) to Rule 24 Certificate dated January31, 1994 in 70-8215).
| |
| (b) 36 - Facility Lease No. 2, dated as of December. 1,1988 between Meridian TruSt Company and Stephen M. Carta (Stephen J. Kaba, successor), as Owner Trustees, and System Energy (B-2(c)(2) to Rule 24 Certificate dated January 9, 1989 in 70-756 1), as supplemented by Lease Supplement No. 1 dated as of April 1, 1989 (B-22(b) (2) to Rule. 24 Certifiate dated
| |
| * 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 70-8215).
| |
| (b) 37 - Assignment, Assumption and Further Agreement No. 1, dated as of December 1, 1988, among System Energy, Meridian Trust Company and Stephen M. Carta, and SMWPA (B-7(c)(1) to Rule 24 Certificate, dated January 9, 1989, in 70-756 1).
| |
| (b) 38 - Assignment, Assumption and Further Agreement No. 2, dated as of December 1, 1988, among System Energy, Meridian Trust Company and Stephen M. Carta, and SMEPA.(B-7(c)(2) to Rule 24 Certificate, dated January 9, 1989, in 70-7561).
| |
| (b) 39- Collateral Trust Indenture, dated as of January 1, 1994, among System Energy, GGIB Funding Corporatio and Bankers Trust Company, as Trustee (A-3(c) to Rule 24 Certificate dated January 31, 1994, in 70-8215), as supplemented by Supplemental Indepture No. 1 dated January 1, 1994, (A-3(f) to Rule 24 Certificate 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)i.
| |
| (b) 41- Grand Gulf Unit No, 2 Supplementary Agreement, dated as of February 7, 1986, between System Energy and SMEPA (10(aaa) in 33-4033).
| |
| (b) 42- Unit Power Sales Ag"ment, dated as of June 10, 1982, between System Energy and Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans (10(a)-39 to
| |
| *Form 10-K forthe year endedDecember 31, 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 Miissippi and Entergy New Orleans (19 to Form 10-Q for the quarter ended September 30, 1984, in 1-3517).
| |
| (b) 44- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
| |
| (b) 45- Fuel Lease, dated as of February 24, 1989, between River Fuel Funding Company #3, Inc. and System Energy (B-l(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, Inc. 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 (D to Rule 24 Certificate, dated June 26, 1974, in 70-5399).
| |
| (b) 48- Service Agreement, 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 70-5399).
| |
| (b) 50- 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).
| |
| E-14
| |
| | |
| (b) 51 - 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 endedDeceber-31, 1989).
| |
| (b) 52- Second Amendment dated January 1, 1992, to the Entergy Corporation and Subsidiary Companie*-Intercorpany Income Tax Allocation Agreement (D-3 to Form U5S for the. year ended December 31, 1992). . .
| |
| (b) 53- Third Amendment'dated January 1, 1994 to Entergy: Corporation and Subsidiary Companies ntercompany Income Tax Allocation Agreement (D-3(a) to Form U5S for the year ended December 31, 1993).
| |
| (b) 54- Service Agreement with Entergy Services, dated as of July 16, 1974, as amended (10(b)-43 to Fo.m 10,K for the year ended December 31, 1988, in 1-9067).
| |
| (b) 55 - Amendment, dated January 1, 1991, to Service Agreement with Entergy Services (10(b)-45 to FornlVI-KfortheyearendedDecember31,1990, in 1-9067). .
| |
| (b) 56 - Amendment, dated January 1, 1992, to Service Agreement with Entergy Services (10(a) -11 to Form I0-K for the year ended December.31, 1994 in1--3517). .
| |
| (b) 57- Operating Agreement between Entzrgy Operations and System Energy, dated as of June 6, 1990. (B-3(b) to Rule 24.Certificate, dated June 15, 1990, in 70-7679)Y.
| |
| (b) 58- Guarantee Agreement between Entergy Corporation and System Energy, dated as of September 20, 1990 (B-3(a) to Rule 24 Certificate, dated September 27, 1990, in 70-7757).l (b) 59- Amended and Restated Reimbursement Agreement, dated as of December 1, 1988 as amended and restated as of Decmber -20, 1999, among System Enery Resources, Inc., The Bank of Tokyo-Mitsubishi, Ltd., as Funding Bank and The Chase Manhattda Bank;. as administrating bank, Union Bank of California, N.A., as documentation agent, and the Banks named therein, S.aParticipating Banks (B=1)) to Rule 24 Certificate dated March 3-2000 in 70-7561).
| |
| . /.2 n
| |
| : a. Bak Patipan (B--. dae Mac
| |
| +(b) 60- Letter to John Wilder offering Employment (10(b)62 to Form 10-K for the year ended D-c., -iber31,,1998 in 19067).
| |
| +(b) 61 - 1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries (Filed with the Proxy Stateinent dated March 30, 1998).
| |
| Entergy Arkansas (c) 1 - Agremntw dated April 23, 1982, among Entergy Arkansas and certain other System companies, relating to System Planning and Development and Intra-System Transactions (10(a).1 to Form 10-K.for the year ended December 31, 1982, in 1-351.7).
| |
| (c) 2 - Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)2 in 2-41080)..,
| |
| E-15
| |
| | |
| (c) 3 - Amendmeunt, dated February 10, 1971, to Middle South Utilities System Agency Agreement,
| |
| .. dated Deedmber 11,1970 (5(a)-4 in 2-41080).
| |
| (c) 4 - Amendment, dated May 12, 1988, to Middle South Utilities System Agency-Agreemont, dated December 11, 1970 (5(a) 4 in 2-41080).
| |
| (c) 5 - Middle South Utilities-System Agency Coordination Agreement, ,dated December 11, 1970 (5(a)-3 in 241080).
| |
| (q) 6 Senvice Agreement-with Entergy Services, dated as of April 1, 19631(5(a)-S, in 2-41080).
| |
| (c) 7 - Amendment, dated January 1, 1972, to Service Agreement with Entergy Services (5(a)- 6 in 2-43175).
| |
| (c) 8 - Amendment, dated April w27, 1984, to Service Agreement, with Entergy: Services (10(a)- 7 to Form 10-K for the year ended December 31, 1984, in 1-3517).
| |
| (c) 9 - Amendment, dated,August, 1,:1988,:to Service Agreement with Enteir Services (10(c)- 8 to Form 10-K for the year ended December 31, 1988, in 1-10764).
| |
| (c) 10- Arnendment, dated Januat: L,-991, to; Service Agreement with Entergy Services (10(c)-9 to Form 10-K for the year ended December 31, 1990, in 1-10764).
| |
| (c) 11- Amendment, dated January 1, 1992; to Service Ageement with EnterU Services (10(a)-l to Form 10-K for the year endedDecember 31, 1994in 1-3517).
| |
| (0) 12 through. "
| |
| (c) 25- See 10(a)-12 through 10(a)-25 above.
| |
| (p) '26 Agreement.dated August 20, ,1954, between'Entergy. Adansas- and the United States of Amei*ca (SPAXI3(h) in2-11467). ..
| |
| (c) 27- Amendmhent, dated April .19, 1955, to the United States of America (SPA) Contract, dated August 20, 1954 (5(d)-2 in 2-41080).
| |
| (c) 28- Amendment, dated January 3, 1964, to the United States of AmericwISPA) Contract, dated August 20, 1954 (5(d)-3 in 2-41080).
| |
| (c) 29- Amendment, dated September 5, 1968, to the United States of America (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) Contract, dated
| |
| -August22,1954 (5(d)-5 in"2-41080).
| |
| (c) 31- Amendment, dated July 18, 1.961, 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 America (SPA) Contract, dated August 20, 1954 (5(d)-7 in 241080).
| |
| E-16
| |
| | |
| (SPA) Contrab , dated
| |
| . () 33 iAmendment, dated JaMMay 25,ý 968, to the United States of America August 20, 1954*5(d)4,iri 2-41-09).
| |
| * 14,4971, to the UW: States ..of America' (SPA) Contract, dated
| |
| . ()*.:.- ,.A:rg..,,t,20.9*5.4 34,.; - At*=ementdatedOctober (5.(*)-9.in124317-5.)?.'; " " +
| |
| (SPA) Contract, dated (c) 35- Amendment dated January 10, 1977, to the Unted States of America
| |
| . .,Augustc2Q;,1954,05(1*10in.2.60233).
| |
| United States of America (c) 36- Agreement, dated May 14,1971, between Entergy Arkansas and the 4 8 0 : A -
| |
| '- . ,"..(SA) (5(e) iw2 10 ) ....
| |
| (SPA) Contract, dated (c) 37- Amendment, dated January 10, 1977, to the United States of America
| |
| .. ay-14 .197.1(5(e)-im 2--6033)..
| |
| and Supplement (c) 38- Contract, dated May 28, 1943, Am=dmMAto.Contratt. datd July 21J.949, Entergy Arkansas and to Amendment to Contract, dated December 30, 1949, between S.-M.Kamie Gas. Cleaning:, 4midny; Agreemets, dated.as ;of Septanber 30, 1965, between Company; and Letter
| |
| ,Entergy Arkansas anii-fomrm stockholders. of McKamie: Gas .Cleani'og accepted by Entergy
| |
| . . Agi.emout, dated June:22., 1966,-by Humble OilM& Refining.Company Arkansas on June 24, 1966 (5(k)-7 in 241080).
| |
| Fuels
| |
| ().,39- A mnt, dated April.3, 1972, between:-+'*
| |
| U.2"46152)*'." " " and Gulf En-trgy Services " "United Nudear S.....*.::, .:Co~prton-(5(1)-3.
| |
| * Trust #1 and Entergy (c) 40- Fuel Lease, dated as of December 22, 1988, between River Fuel A.-.aS..* ,(R-1l(b),tG Rule 24.. rtificatin:70-7571).
| |
| Entergy Arkansas and (c) 41- White Bluff Operating Agreement, dated June 27, 1977, among the City of
| |
| ,-Arkanas .EleWic: C.ooperative Co-#rAtiomt~nd. City Water and Light.Plant of 1977; in 70-6009).
| |
| Jonesboro, Ad.dc a (B-2(a),to Rte24 Certificate, dated June 30,
| |
| -:..(*c)+42-- ::,,Whit..BlhifOwner~hp Ar. " damoune,27, et, 19.77, anng Entergy Arkansas and Arkansas Electric Co rve Corporato and'City Water and Light Plant of the City of Jonesboro, Arkansas (B-l(a) to Rule 24 Certificate, dated June 30, 1977, in 70-6009).
| |
| of Conway, Arkansas (c) 43 Agreement, dated June 29, 1979, between Entergy Arkansas and City 2-66235).
| |
| (5(r)-3 in -...
| |
| on-fee en. d*
| |
| Cit Wate.r
| |
| *:?.Tr.'smiss .. +-*',*
| |
| .(o), 44- .TrasmissinAgresmnen, dated Auust .2 1977, between Entergy: Arkansas and City Water and Light Plant ofthe City of.onesboro, Arkansas ($5r)-3 in 2-60233).1 (c) 45 Power Coorinafion, .lte&rdm m4and Transmission Service Agreement, dated as of June 27, Arkansas (5(r)-4 in bi t F 197V betwo.+ Arkansas Electric Cooperative Corporationand. Entergy 2-60233).,
| |
| among (c) 46- Independeace Stm Electric, Station Operating Agreement, dated July 31, 1979, Corporation and City Water and Light Entergy Arkansas and Arkansas Electric Cooperative (5(r)-6 in 2-66235).
| |
| Plant of the City of Jonesboro, Arkansas and City of Conway, Arkansas E-17
| |
| | |
| (c) 47- Aftrdment, dated December 4, 1984, to the Independleice Steam Electric Station Operating Agreement (10(c) 51 to Form 10-K for the yrlended December 31, 1984, in 1-10764).
| |
| ,c) 48,- Independence Steam :Electric Station Owudshp Agrcementi.dated. July 31, 1979, mug Entergy Arkansas and Arkansas Electric Cooperative Corporatimi and City Water and Light Plant of the City of Jonesboro, Arkansas and City of Conway, Arkansas (5(r)-7 in 2-66235).
| |
| (c) 49- Amendment, dated December 28, 1979, to the fndependent SteamElectric Station Ownership Agreement S. .. *.N (5(r)-7(a) in 2-66235).
| |
| ; .; . . . : : . . ] : . . , " I'. . .
| |
| (c) 50- Amendment, dated December 4, 1984, to the Independefise.Steam Eledtic Station Ownership Agreement (10(c) 54 to Form 10-K for the year aided December 31, 1984, in 1-10764).
| |
| (c) 51-- Owner's Agreemwet dated November 28, '1984, among Entergy. Arkansas, Entergy Mississippi, other co-owners of the independence Station (10(c) 55 to Form 10-K for the year ended-December 3k1< 1984;. in 1-10764).
| |
| '(c)52-- Co*seM, Agreenemt 4ad dAssumption; ated Mecenlber 4, 19844, among Entergy Arkansas,
| |
| -.. :iEntergy-Missi§sippi, other co-ownmr of the Independence Station an-dUnite States Trust Company of-Ne*w Yor, as-Trdstm-(10(c) 56 .o Fo*m10-K for the year aided December 31, 1984, in 1-10764).
| |
| ,.-(c) ..53 "PowerCooitlination, Inte.change and Transmission Servic6 Agreement, dated as of July 31, 1979, between Entergy Arkansas and City Water and Light Plant of the -City of Jonesboro, Arkansas (5(r)-8 in 2-66235).
| |
| (c) 54- Power Coordination, Interchange and Transmission Agreement, dated asr.of June 29, 1979, between City of Conway, Arkansas and Entergy Arkansas (5(r)-9 in 2-66235)..
| |
| +- (c): 55-. Agrdm t, :dated JIme 2 1,19794,betwee=ktnetgy Akan 'and Reeves.E.
| |
| Ritchie ((10)(b)-90 tcForm 10-Kforthey eartdedjDecember31,.i9&0,in 1-10764).
| |
| .(c) 56- Reallocatio Agreement, dtedtdak of1July.21,981;t among System n ergy and certain other Systemeompanies:(B-l(a) iiv70-6624) ,..
| |
| . I * " " ' L : . + : : ,+I .. . . + ", ;. . , - + " " *.' I.
| |
| +(C) 57- Post-Retirement Plan (10(b) 55 to Form 10-K for the year ended December 31, 1983, in 140764).
| |
| (c) 58-- Unit Power Sales Agreement, dated as of June 10, 1982, between System Energy and Entergy Arkmnsas,'.E.tergy Louisiana, Eitergy: Mississippi, and Erneig New Orleans (10(a) 39 to Form 10-K -for the year enided-December 31, 1982, in 1-3517 ..
| |
| (c) :.59--t First Amendment to Unit Power Sales Agreemneut -dated as of June 28, 1984, between System Energy,- Entetgy** Amsas, Entergy Louisiana, EntergyMississippi, and Entergy New Orleans (19 to Form 10-Q for the quarter ended September 30, 1984, in 1-3517).
| |
| :,- (c) 60- Revised Unit-Power Sales Agreement (10(ss) in 33-4033).
| |
| E-18
| |
| | |
| (c) 61- Contract For Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste, dated June 30, 1983, among the DOE, System Fuels and Enterg 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 Subsidiary Companies Intrcmpany Icome Tax Allocation Agreement, dated April 28, 1988 (D-1 to Form U5S for the year ended December 31, 1987).
| |
| (q) 63- First Amendmcnt datedJanuary 1, 1990, to the Middle South Utilities, Inc. and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-2 to Form USS for the year ended December 31, 1989).
| |
| (c) 64- Second Amendment dated January 1, 1992, to the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement (D-3 to Form U5S for the year ended December 31, 1992).
| |
| (c) 65- Third Amendment dated January 1, 1994, to Entergy Corporation and Subsidiary Companies Inteompanr incom Tax Allocation Agreement (D-3(a) to Form U5S for the year ended December 31, 1993).
| |
| (c) 66-- Assignment of Coal Supply Agreement,. dated December 1, 1987, betweui System Fuels and Entergy Arkansas (B to Rule-24 letter filing, dated November 10, 1987, in 70-5964).
| |
| (q) 67 - Coal Supply Agrdianenk dated December 22, 1976, between ;Ssteem Fuels and Antelope Coal Company (B-1 in 70-5964 ), as amended by First Amendment (A to Ru 24 e 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' letter filing, dated Nobne 10, 1987 in 70-5964).
| |
| (c) 68 - Operating Agreement between Entergy Operations and Enterg Arkansas, dated as of June 6, 1990 (B-l(b) to Rule 24 Certificate, dated June 15, 1990; in 7047619).
| |
| (c) 69- Guaranty Agreement between Entergy Corporation' and Entergy Arkansas, dated as of September'20, 1990 (B-I(a) to Rule 24 Cerlificate,dated-Septeaiber 27, 1990, in 70-7757).
| |
| (c) 70- Agreement for Purchase and Sale, of independence Unit 2 betweeivEntergy 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 between Entetgy 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 Ent"gy Arkansas and Entergy Power, dated as of-August28,11990 (B-5(a) to Rule 24 Certificate, dated September 6, 1990, in 70-7684).
| |
| (c) 73- - Ritehie 'Steam Electric Station Unit No.2 Ownmership Agreement between Eta g Arkansas and Entergy Power, dated as of August 28, 1990 (B-6(a) to Rule 24 Certificate, dated September 6, 1990, in 70-7684).
| |
| E-19
| |
| | |
| between Entergy (c) 74- Powv :Coordinatiou,..Intrcrhange and Tansmissiop Service Agreement to Form 10-K for the Power and Enterg Ayknas, dated as of August28, 1990 (10(c)-71 year ended Decelmber 31, 1990, in .1-10764).
| |
| Subsidiaries (10(a)52 to
| |
| +(c) 75- E Finacial Counseling Programnof Enterg Corporation and Form 10-K for the year ended December 31, 1989, in 1-3517).
| |
| +(c) 76- Entergy.Corporation .ma1 Incentive Plan (1-(a)54 to Form 10-K for the year ended
| |
| ..Deember 3 1, 1989, in 1-3517).
| |
| 24
| |
| +(c) 77- Equity Ownership Plan of Entergy Corporatioa and Subsidiaries (A-4(a) to Rule Certificate dated.May 24, 1991, in 70-7831).,
| |
| corporaion and Subsidiaries
| |
| +(c) 78- Amendment No. I to the Equity Ownership Plan of Entergy 31, 1992 in 1-3517).
| |
| (10(a)71 to Form IO-K for the year ended December
| |
| +(c) 79- 1998. Equity Ownership Plan of Entergy Corporation and Subsidiaries (Filed with the Proxy Statement dated March 30, 1998).
| |
| +(9) 80- Agreement between Arkansas Power & LightCompany and R, Drake Keithl (10(c) 78 to Form 10-K for the year endd December 31, 1992 in 1-10764).
| |
| +(c) 81- Suppj;pvt Plan (10(a)69.to Form 10-K for the.year endd December 31, 1992 in lý3517)..
| |
| (10(a)5 3 to
| |
| +(e) 82- Defiprd Contribution Restoration Plant of Enter Corporation and Subsidiaries Form 10-Kfor the yearended December 31, 1989 in 1-3517).
| |
| Form 10-K for
| |
| +(c) 83 - Disability-Pjan.9ofEntergy Corporation and Subsi4iaries (10(a)72-to vxecuuvo 9 9 2 .in .1-3517).
| |
| theyear en4edbicmnber3,,1 Corporation. wn Subsidiaries, as. amended
| |
| +(c) 84-- -Stock Plan, hr Okt'id Di'.rectors of Entergy (10(a)74to Fom 10-K fQrTth year ended December 31, 1992 in 1-3517).
| |
| Form 10-K for the
| |
| *+(c) 85 A gMemet between nteg Corporation and, jerryp. Jackson (10(a)-67,to year endedDecember 31, 1992 in l13517).
| |
| 10-K for
| |
| +(c) 86 - Summary Description of Retired Outside Director Benefit Plan. (10(c) 90 to Form the year ended December 31, 1992 in. 1,40764).
| |
| +(.) 87- Anendment to Defined Contribution Restorion Plan of Entergy Corporation and Subsidiaries (10(a) 81 to Form 10-K for theyear ended December 31, 1993 in 1-11299).
| |
| year ended December 31,
| |
| +(c) 88 System Executive Retirement Plan (10(a) 82 to Form 10-X for the 1993 in 1-11299).
| |
| Loan Agreement dated June 15, 1993, between Entergy Arkansas and Independence Country, 0() 89 - July 9,.1993 in 70-8171).
| |
| Arkansas (B-1 (a) to Rule 24 Certificate dated E-20
| |
| | |
| (c) 90- instllmeat Sale Agreement dated January 1, 1991, betwe Ent=r Arkansas and Pope
| |
| .Country, Arkanss (B-I (b) to Rule 24 Certificate dated January 24, 1991 in 70-7802).
| |
| Entergy Arkansas and Pope (c)91-~Installent Sale. Agreement dated November 1,, 1990, between in 70-7802).
| |
| Country, Arkansas(B-I (a),to Rule 24 Certificate dated November 30,1990 JefLerson County,
| |
| .(c) .92- Lo Agreement dated June 15, 1994, between Entergy Arkansas and in 70-4405).
| |
| Arkasas (ar.(a) to Rule 24 Cefficate dated June 30, 1994 and Pope County, Arkansas
| |
| : 10) 93- Lean Agreement. dated Jun 15, 1994, between Entergy Arkansas (B-4(b) to Rule 24 Cerificate in 704405).
| |
| Arkansas and Pope County, (c) 94- Loan Agreement dated November 15, 1995, between Entergy 31, 1995 in 1-10764).
| |
| Arkansas (10(c) 96 toForm 1O-K for the year ended DecWmber Arkansas and Entcrg Arkansas (c) 95- Agreema't as: to Expenses and Liabilities between EntWry for the quarter ended September 30, Capital I, dated as of August 14, 1996 (46j) to Form 10-Q
| |
| * 6iu-1-0 7 6 4 )_
| |
| Arkansas and Jefferson County, (c) 96- Loan Agreement dated Deceber 1, 1997, between Entergy 31, 1997 in 1-10764).
| |
| Arkansas (10(c)100 to Form 10-K for the year ended December 10-K for the year ended
| |
| +(c) 97- Letter to John Wilder offing Employnt (10(b)62 to Form December 31, 1998 in 1-9067).
| |
| 11WITerGulfftfteS States and American Bank (d) I ---GuraY Ageremt, -dated July 1, 1976, between Entergy Gulf in 1-2703).
| |
| and Trust Company (C and D to Form 8-K, dated August 6,1976 1, 1981, betwemn The Connecticut Bank (d) 2 .-- Lease*.vfRailroad Equipment, dated as of Decmber and First Supplement, dated
| |
| 'mct Truqt: Company as Lessor and. Entergy Gulf States as Lessee; Unit Train Stee Cog Porter Cars awof Decmbr 31, 1.981, relating to 605 One Hundred-Ton in 1-2703).
| |
| (4-12 to Form 10-K for the year ended December 31, 1981 Gulf States and Hibernia (d) 3 - , _G.- Any Agre*ement, dated August 1, 1992, between Entergy Bonds of the Industrial NattQnalBank, relating to Pollution, Control Revenue Refuinding (10-1 to Form 10-K for the Deveo eBeard of the Parish of Calcasieu, Inc. (Louisiana) year ended December 31, 1992 in 1-2703).
| |
| Gulf States and Hancock Bank (d) 4 - Guaranty.Agreement, dated January 1, 1993, between Entergy of Pointe R mding Bonds of the Parish
| |
| .of LoWsiara relating to Pollution Control Revenue December 31, 1992 in 1-2703).
| |
| Coupee (Louisiana) (10-2 to Form 10-K for the year ended States, Morgan (d) 5 - Deposit Apgreent, dated as of December 1, 1983 between Entergy Gulf to the Issue Receipts, relating Guaranty Trust Co..as Depositary and the Holders of Depository Rate 1/2 share of Adjustable of 900,000 -Depositary Preferred Shares, each representing Form 10-K for the year ended Cumulative Preferred Stock, Series E-$100 Par Value (4-17 to December 31, 1983 in 1-2703).
| |
| E-21
| |
| | |
| (d) 6 Agreement effiective February 1, 1964, between Sabine River Authority, State of Louisiana, and Sabine River Authority of Texas, and Entergy Gulf Statfs, Central Louisiana Electric Company, Inc., and Louisiana Power & Light Company, as supplemented (B to Form 8-K, dated May 6, 1964, A to Form 8-K, dated -October 5, 1967; A to Form 8-K, dated May 5, 1969, and A to Form S-K, dated December 1, 1969, in 1-2708).
| |
| (d) 7 - Joint Ownership Participation and Operating Agreement regarding River Bead Unit I Nuclear Plant, dated August 20, 1979, between Entergy Gulf States, Cajun, and SRG&T; Power Interconnection Agreement with Cajun, dated June 26, 1978, and approved by the REA on August 16, 1979, between Entergy Gulf States and Cajun; and Letter Agreement regarding CEPCO buybacks, dated August 28, 1979, bween Entergy Gulf States and Cajun (2, 3, and 4, respectively, to Form 8-K, dated September 7, 1979, in 1-2703).
| |
| (d) 8 - Ground Lease, dated August 15, 1980, between Statmont Associates Limited patrhip (Statmont) and Entergy Gulf States, as amended (3 to Form 8-K, dated August 19, 1980, and A-3-b to Form. 10-Q-for the quarter ended September 30, 1983 in 1-2703).
| |
| (d) 9 - Lease and Sublease Agreement, dated August 15, 1980, between Statmont and Entey 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- Lease Agreement, dated Septenber 18, 1980, between BLC Corporation and Entry Gulf States (1 to Form 8-K, dated October 6, 1980 in 1-2703).
| |
| (d) 11 - Joint Ownership Participation and Operating Agreement for Big Cajun, between Entry Gulf States, Cajun Electric Power Cooperative, Inc., and Sam Rayburn G&*, Inc, datedNovember 14, 1980 (6 to Form 8-K, dated January 29, 1981 in 1-2703); Amendment No. 1, dated December 12, 1980.(7 to Form 8-K, dated January 29, 1981; in 1-2703); Amendment No. 2, dated December 29, 1980 (8 to Form 8-K, dated January 29, 1981 in 1-2703). "
| |
| (d) 12- Agreement of Joint Ownership-Participation between- SRMPA,. SRG&T,and Entergy Gulf States, dated June 6, 1980, for Nelson Station, Coal Unit #6,: as amended, (8 to Form 8-K, dated June 11, 1980, A-2-blto Form 710-Q For the quarter ended 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, Febrtiary 25, 1982, which c6ver the .construction of a 140-mile transmission line to connec- the two systems, purchase of power and use of transmission facilities (10-31 to Form 10nK, for the year ended December 31, 1981 in 1-2703). .
| |
| +(d) 14- Executive Income Security Plan, effective October 1, 1980, as amended, continued and completely restated effictive as of March 1, 1991 (10-2 to Form, 10-K for the year ended December 31, 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 1.2, 1982 (A-2-c to Form 10 Q for the quarter ended March 31, 1982 in 1-2703) and Amendment, dated December 6, 1983 (10-43 to Form 10-K, for the year ended December 31, 1983 in :1-2703).
| |
| E-22
| |
| | |
| (d) 16- Lea46 Aeme* et -dated as of June 29, 1983,betveeal Entergy Gulf -Stt -And City National Bank of Baton Roilg as Oner Trustee, in coniiction with the of a Simulator and
| |
| -asifig Training Center for River Bend Unit -1 (:2-a to fVorm 10-Q fboite quarter nde June 30, the year 1983 in 1-2703) and Amendment, dated December 14, 1984 (10-55 to Form 10-K, for
| |
| . ended Decemibe 3r; '1-049in4 -2703).
| |
| National (d) 17- Participation Agreement, dated as of June 29, 1983, aimmg Entdig GWlStates; City of the Southwest National Association, Houston Bank of Baton Rouge, PruFunding, Inc. Bank aa&n Li- CwMyin m o witIhe of a Simulathr *ad Training Center trad June 30419831 in 1-2703).
| |
| " ., of Riv.rjBendUmnIt(A2ib to F6mi fO-Q for the.
| |
| (d) 18- Taxiý6AgreeM-n;dMed as d, Awe 29,"1983, between -BE tr Gulf States and for River PrnFundi-g Inc., in connection with the leasing of a Simulator and Training Center Be~uniftT(A-2-c to For frtlie quarter e=We Jun030, 1993: in 1-2703).
| |
| 104Žib (d) 19- Agreement to Lease, dated as of August 28, 1985, among Entergy Gulf St4as; City National Bank of Baton Roup, as Owner Thistee, and Prudential Interfimding Corp., as Trustor, in connýeoi withlh, tlhela . a Sifulator nd Training df'hprovemiv.t to Faility for River
| |
| . ... ;Unit t 910069toForn i 4K, fr the,yar ended De*eznber 31,'1115 in 1-2703).
| |
| 9 in d h of (d) 20- First -Amended Power Sales Agreement, dated December 1, 1985 between Sabine River Authority, State of Luisidna, tad Sabine River Authority, State'of Txas, -andEutetg Gulf states, Central Lotisina Electric Gd.:, Inc., and Louisina2 7Powe and.Liot Cbmpany (10-72 3 ).
| |
| TA. -t* FrI0-KforýtieyearetideDeIber 3il ber.il -i1-
| |
| ' 0 .,
| |
| +(d) 21 - Deferred Comp)ensation Plan for Directors of Enterg Gulf States and Varibus Corporation, as aminded'January 8, 1987;and e1f9etiv na !, 1987 (10-77 to*i"* 10k tb_the Year S'0* ner 31,+'1986 ii'*-2703)Ym ei it dated Deciembr 4, 1991 (10-3 to Amendment No. 8 in Regstrat -M.&2476551).:"
| |
| +(d)'. 22 - Tiust'Agrfeinet for Defe~rrW' Paymnentsj.td' be made biEnter*y deff States pursubnt~t the.
| |
| Trust Executive Income-Security Ptai4' by and bet*een Entergy C4uW Stftes and Bankers 31, Company, effective November 1, 1986 (10-78 to Form 10-K for the year ended December 1986 in 1-2-763).
| |
| +(d) 23T- Trust Agriement for Defietd hgta nts' e Entergj'Gulf States' Mi ent Incentive Compensation Plan and Administrative Guidelines by and between Entergy Gulf States and
| |
| - ... ankers- Tst Company, *fmftiVbJue- 1-19!6- (10-79 to Form 10-K fbf the year ended December 31, 1986 in'1-2703). .
| |
| Ditoer' 'and
| |
| +(d) 24----Nonip fld Deferred Compensatioft A.h for Officers,' NionetyVy
| |
| - . ..Dsignatd Key Enilye,-effe. eDecembe 1,1985,as amended continued and "conpletelyi5stated.lef*hetivas f March 1 1991 (10 5 to Amendmnt No. 8 in Registration No. 2-76551).
| |
| * +(d) 25- TnTst*Agreement for Entergy -uOf States' Nonqulif*led-Ditectors and Designated Key N.A.
| |
| Employees by and between EntergyGiulf States and First City Bank TexAS.Beaumont, (now Texas Commerce Bank), effective July 1, 1991 (10-4 to Form 10-K for the year ended December 31, 1992 in 1-2703).
| |
| E-23
| |
| | |
| .(d). 26.- L=s A* em t, dateda of June 29, 1987, among.GSG&T, Inc., a EptergyGulfStat
| |
| . .-. relatd tp ,tb leasea oftthq Lewis Ce gert sio,(10- to Form 10-K for the yearend.9cDeqe 3n 1,1988 in 1-203).
| |
| (d) 27- Nuclear Fuel Lease Ageement between Epterg. G tRiv n Fuel Services Inc. to lease the fuel for River Bend Unit 1, dated February 7, 1989 (10-64 to Form 10-K for
| |
| .t*. yp.a- -n. Deember.31,1988inl-2703). ,,,
| |
| (4)2~- T a d, Wneshnent M pg gremVqq* nt bew Enterg GWl~to. and Morgan (3.ar, and.Tmru,.st Comippny-of New.York(the, s..""ng TrustAgrement) wilh respect to decommissioningfunds authorized to be collected by Entergy Gulf States, dated
| |
| . :. 15,;1989.( 0-66toForm 10,K for ft eende aD nber 31, J.98 1-2703). q, (d) 29- Amendment No. 2 datoe.dlvner i, 1,995. bet EntergyGulf.Statas ,MellonBank o Decommissioning Trust Agreement (10(d) 31 to Form 10-K for the year ended December 31, (d). 3A.-.. Pe u dateiver d..* ef eumq cr Bend ces, Inc. and Certip Cnm~ec~) endig htiUtions aU44CJP Inc, as Ageat for *q Lenders (10(d) 34 to Form 10-K for year ended December 31, 1994).
| |
| 3i
| |
| ~~(d)~~ Aenlient No, 1 datd as of January. 31% 4rdtArwet 1 atda fDcme l*.., mon~g R*.yer B*ni-Fuel Sqrvicps, . 4 certain, commercial ig sitions and CIBCInc. as agent.for Leqr (10(4~Fo..,Fom... 1O-K~,r. th* year p.end. December 3 1, 1995).
| |
| (4) 32- P.P a.zbip Agreqnent by and amongC*:.,o. Inc.,: and EBtea"yGl States, CITG4O Pet4o.elpn CorporatioR and.,cMl,4 Vt nca1 CoWpanyY dted Ap*i 28, 19.88 (10-67 to Form 10-K for the year ended December 31 .1988jn 1-27Q3).
| |
| +() 33.- , A .Stat. Utilties Company ExecUtI CoptUi
| |
| *. date .J.u .r,8.,. 1991 (4.- to F.... 10 ..... f .ye.,.ndedI ember3,1 199*n. 1-.2 703)9. (W Tpr I
| |
| * A
| |
| +(d) 34 - Trust Agreement for Entergy Gulf States' Executive ContinuityrPlan, by andb.etw Entergy Gulf States and First City Bank, Texas-Beaumont, N.A. (now Texas Commerce Bank),
| |
| ;,; *, tiy y* 0, t991 (10?5 to *orn~ ,K.fo*..bey ended
| |
| .. Dqe~ er 31, 1992.in 1-2703).
| |
| * ()-3.*-.;Gpf Sq*,.'he"s Boa*,d ofD" W' "". . .
| |
| (35... f Statos Boar .Jt etor.P!Pa, dted Febnmrjuy.5, 1991 (10-8 to Form 10-K for the year ended December 31, 1990,in 1-2703)... .
| |
| +(d) .36 -,- Gulf States-l . Company Epl.iye', Tru.stee Retirement Planqftftv July as195 s
| |
| .amendedcontinued and.completly restW4 .fP.cVnu.MIY1, 19M9=audAmendment No.1
| |
| .f--
| |
| .ct.i. Januaryy,.1993.(10'6:to FQimn 10,K for. the year ended Decembr 31, 1992 in 1 2703). . .
| |
| (d), 37, Agrcementand Pja. of.Reorganiza" dat4d June .5, 1992, betwoen Eut.rU Gulf Sttcs and
| |
| .EtWgy Corporation (2 to Form S.$.,dated June 8, 1992 in 1-2703)..
| |
| E-24
| |
| | |
| +(d) 38 Gulf States Utilities Company Employee Stock Ownership Plan, as amended, continued, and to Form II-K, dated comnpletely restatedebive January 1, 1984, and January 1, 1985 (A December 31, 1985 in 1-2703).
| |
| Plan,
| |
| +(d) 39- Trust Agreement under-the Gulf States Utilities Company Employee Stock Ownership Bank, as dated Decembe* 30, z1976, between Entg Gulf States and the Louisiana National Trustee (2-A toLRegistration No. 2-62395).
| |
| Trustee, "4(d) 40- Letter Agreementedated.September 7, 1977 between-Entergy Gulf States and the
| |
| -delegating c6rtaii of the- Truste&'s function- to the ESOP Committee (2-B to Registration StaementNo. 2-62395).
| |
| +(d) 41 *-. Gulf StatesUtilities Company Employees Thrift Plan as amended, continued and completely 2 No.
| |
| restated effetive as of January 1, 1992 (28-1 to -nendment No. 8 to Registration 76551).
| |
| Employees Thrift
| |
| +(d) 42 - Restatement of Trust Agreement under the Gulf States Utilities Company between Entergy Gulf States and First Plan, reflecting changes made through January 1, 1989, Trustee'(2-A to.Form 8 City Bank, Texas-Beauvmtý N.A., (now Texas Commerce Bank), as K dated October 20, 1989 in 1-2703).
| |
| (x) 43 O t Agreement between EntergMy Oerations and Entcry Gulf States, dated as of December 31, 1993 (B-2(f) to Rule 24:Crificate in 70-8059).
| |
| Corporation and Enteg Gulf States, Guarantee Agreement between EnteWCertificate 7 dated as of (d) 24 in 70-8059).
| |
| December 31, 1993 (B-5(a) to Rule (d) 45- 'Setviee with Entergy Services, dated as of December 31, 1993 (B-6(c) to Rule 24 Certificate in 70-8059).
| |
| -GulfStates, dated
| |
| -+(d)46 - .Amendment to Employment Agirement between J. L. Donnelly and Entergy 31,. 993 in 1-2703).
| |
| December 22, 1993 (10(d) 57 to Form I10-K for the year ended December (d) 4*7 - Assimnent, Assumption and Amndment Agreemntto Lter of Credit and Reimbursement Agreement between Entergy Gulf States, Canadian Imperial Bank of.Conmierco and Westpac in 1 Banking Corporation (10(d) 58 to Form 10-K for the year ended December 31, 1993
| |
| -1.2703).
| |
| Companies (d) 48,- Third Amendnentt;dated January 1, 1994, to Entergy Corporation and Subsidiary (D-3(a) to Form U5S for the year ended Intercompany Income Tax Allocation Agreement December 31, 1993).
| |
| Gulf States (d) 49- Agreement as to Expenses abd Liabilities between Entergy GulfStates and Bnteruy to Form 10-K for the year ended Capital I, dated as of January 28, 1997 (10(d)52 December31, 1996inl-2703): K.
| |
| of (d) 50- Refunding Agreement dated as of May 1, 1998 between Entergy Gulf States and Parish 29, 1998 in 70-8721).
| |
| Iberville, State of Louisiana (B-3(a) to Rule 24 Certificate dated May E-25
| |
| | |
| (d) 51 - Refunding Agreement dated as of May 1, J998 between Eatrgy Guf States and Industi Development Board of the Parish of Calcasien, Inc.. (B-3(b) to Rule 24 :Certificate dated January 29, 1999 in 70-8721).
| |
| (d) 52 - Refinding Agreement (Se.'es 1999-A) dated as of September, 1, 1999 between Entergy Gulf States and.Parish of West Feliciana, State of Louisiana (B-3(c).to Rule 24 Certificate dated October 8, 1999 in 70-8721).... ,.
| |
| (d) 53- Refundin Agreement (Series 1999-B) dated as of September 1, 1999 between Entergy, Gulf 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 Ownership Plan of Entergy Corporation. and Subsidiaries (Filed with the. Proxy Statement dated March 30, 1998).
| |
| +(d) 57- Letter to John Wilder offering Employment (10(b)62 to Form 10-K for the year ended December.31, 1998 in 1-9067).
| |
| Enteigy Louisiana (e) 1 - Agreement, dated April 23, 1982, among Entergy Louisiana and certain other System companies, relating to System planning and Development and Intra-System Transactions (10(a) 1 to Form 10-K for the year-.eded December 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 - Amendment, dated as ,of Febnury 10, 1971, to Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)-4 in 2-41080).
| |
| (e) - Amendmený- dated May 12, 1988, to Middle South.Utilities System Agency Agreement, dated Doeamber 11, 1970 (5(a) 4 in.2-41080).
| |
| (e) 5. - Middle South Utiie System Agency Coordination, Agreermet, dated December 11, 1970 (5(a)-3 .in 241080).
| |
| (e) 6 -- Service Agreement with Entergy Services, dated as of April 1, 1963 (5(a)-S inZ-42523).
| |
| (e) 7 - Amendment, dated as of January 1, 1972, to Service.Agrement with Entergy Services (4(a)-6 in 2-45916).
| |
| (e) 8 - Amendment, dated as of April 27, 1984, to Service Agreement with Entergy Services (10(a) 7 tW Form 10-K for the year ended December 31,1984, in 1-3517).
| |
| (e) 9 - Amendment, dated as of August 1, 1988, to Service Agreement with Entergy Services (10(d)-8 to Form 10-K for the year ended December 31, 1988, in 1-8474).
| |
| (e) 10- Amendment, dated January 1, 1991, to Service, Agreement with Entergy Services (10(d)-9 to Form 10-K for the year ended December 31, 1990, in 1-8474).
| |
| E-26
| |
| | |
| (e) 11- Aendment, datedJai r 1, 1992,.to Service Agreeent with Entergy Services (10(a)-l to Form 10-K for the yeak ended DeWember 31, 1994 in 1-3517).
| |
| (ey 12througl '
| |
| (e) 25 - See 10(a)-12throuh 10(a)-25 aboe.
| |
| Fuel Company #2. Inc., and Entergy (e) 26- 'Fuel Lease, dated as.,offinuary 31, 1989, betw*en Rivet Louisiana (B-1(b) to Rule 24 Certificate in 70-7580)"
| |
| 2&,4981, among Eeg and certain other (e): 27- Realocatio Agreement, dated as of July .Syste "
| |
| System companies (B-1(a) in 70-6624)'
| |
| June 4, 19892 between Texaco, Inc. and Entergy
| |
| -(ey: 28 - ,Compromise,and.-SefleatA#ment, dated Louisiana(28(a) to Form 8Ktdated-June 4,1982, ini 14474).'
| |
| +(e) ,29-"'Post-R lt Plan (l0(c2-to -Forn 10-K for-+he year: eded December 31, 1983, in 1-8474).
| |
| (e) 30- -Unit Power Sales Agecnt, dat aof ' June 10; 1982i betWeen Systei Energy and Entergy and Entergy New Orleans (10(a) 39 to Arkansas, Enftg Louisiana, Entergy Mississippi Form 10-K for the year encd December 31, 1982, in 1-3517).
| |
| (e) 31- First Amendmett theUit powerSal's Agr n dcd as of-'June28,1984, betwee System Energy and Entergy Arkansas, Entergyended Louisiana, Entergy Mississippi and Enteg Septem '30, 1984,;in 1-3517).
| |
| .NewOdehman (19 to Form 10 .Qfotthequarter (e) 32- Revised Unit Power Sales Agreement (10(ss) in 33-4033).
| |
| C6mpanies Tax Allocation Ynterompany (e) 33- Middle South Utilities, Inc. and Sud ended December 31, 1987).
| |
| Agreem-.t, dated April 28, 1988 (D*l to Form U5S for the year Itilites, Inc. and Subsidiary (e) 34-- First Amendmet, dated January 1, 1990to tho Middle South January 1, 1990 (D-2 to Companies Intercompany Income Tax Allocation Agreement, dated 3
| |
| FontmU5S foetheyearendet4eflfber l*.1989).
| |
| Corporation and Subsidiary (e) 35- Second Amendment dated January 1, 1992, to the Entergy 3
| |
| " P"- to Form'U5S for the year Companies. Intercompany hW. ae Tax Allnooafift Agree ended December 31, 1992).
| |
| and Subsidiary Companies
| |
| -(e) Third Amendment datdj;antary 1, 1994 to 7ntergy Corporation year ended Intercompany Income Tax Allocation Agreement (D-3(a) to 'Form U5S for the December 31, 1993).
| |
| Contract for Disposal of Spent -Nuclear Fuel mid/or High-Level Radioactive Waste, dated (e) 37- Louisiana (10(d)33 to Form 10-K DOE, System. Fuels and Entergy February 2, 1984, among for the year ended December 3-1, 1984, in 1-8474).
| |
| dated as of June 6, (e) 38- Operating Agreement between Entergy Operations and Entey Louisiana, in 70-7679).
| |
| 1990 (B-2(c) to Rule 24 Certificate, dated June 15, 1990, B-27
| |
| | |
| (e) ý39-.%Guarantee Agreement bO*=ee FntcW-. Corpor~amWca .1dEntergy Lopisiana, dated as of September 20,1990 (B-2(a).,-toýRule 24 %,Certfifltdtdqelr2,19,i 70-7757).
| |
| +(e) 40 - Executive, Financial Counseling Program of Entrg Corporation and Subsidiaries. (I10(A) 52 to Form 10-K forthe year ended December 3l 1989,in 1-3517,),
| |
| +(e) 41 - Entergy Corporation A~ina1jnmfuiye Plan (10(at)_A,Wto Form. 19-I for the year ended December 31, 1989, in 1-3517).V.......,;.-.
| |
| +(e)~.A42 Oweai -qit law. of., -ftergyCowporation 'and Sub~diqxies--.(A-4(a) to Rule:24 Certificate, dated May 24, 1991, in70-7831.).:
| |
| +(e) 43 - Amendmenat Nwo.i wI toEh ~jiyOrxbtPa fnergy (Corppratiouand Subsidiaries (10(a) 71 to Form 10;-K for-the yearqqP nelecpbqr.3j~199Z in I-35 1.7)
| |
| +e)44-199 EqityQ~wnrship elan of Entergy.%Porporatign.ýpd SubsidiarAe (Fldwt h rxy Statemnent dated March 30, 1998).
| |
| .+(e),45.- Supplemental ,Rtirement~a 1(~6 to ~
| |
| ~ 10-ror the ywa ended December31, 1992 in I-37). *-.. i
| |
| +(e) 46 - Defined Contribution.Restoration.Plan of Entergy Corporation and Subsidiaries (10(a) 53 to
| |
| *Form.10Q-K.f. fthe~yAr eafde.December3, 1989 iqý 1-35-17).
| |
| * Exe47-k utive DisabiWPLty A.-gC~orration andSubsidiaries'(10() 72 to.Foirm 10-K for the year ended December 31, 1992 in1-3517).
| |
| +(e) 48- Stock Plan for Outside 'Directors of Enterg Corporation and Subsidiaries (10O(a) 74 to Form lO-KfprlteyeareaedDeceapbr31ý4992jn-35-17)
| |
| +(e 4 -Agreenmet between EntryCopratio and Jer D. Jackson (10(a) 67to Form 1- o h
| |
| :year'de ecuber.l1992,m17 3$1-7)ý .
| |
| +(e) 50 - Summary Description of Retired. Outside 04=rcWo BenefitPlan (10(c)90 itg form 10-K for the year ended December 31, 1992 in 1-10764).
| |
| +(e) 51.- AmM~ndit to4Oeftp~dfaqtrib~ug RsoaticqP Jan of &WVrg Corpqrptimn and Subsidiaries (10(a) SI to Form 10-K for the year ended December,31, 1993 in 1-112!R9)..
| |
| N(e) 52 - Syste~n Ex~utiyeRtrgemet -Riau,(10(a) 82 to Jianorm.9-XK for the year ended December,31, 1 9 9 3 in:1-11299). . . . . .
| |
| (e) 53- Installment Sale Agreement, dated July 20, 1994, between Enterg Louisiana and St.
| |
| Charles Parish, Lquis.'ap' (B-(e) to Rulip 34 Certi1ocate dated Augus 1, 1994 in 70-7822)..
| |
| (e) 54-- Installment Sale Agreernentý dated November 1, 199-5, .between Enter Louisiana and St.
| |
| Charles Parish Louisiana (B-6(a) to Rule 24 Certificate dated December 19, 1995 in 70 8487).
| |
| E-28
| |
| | |
| (W 55- Refunding Agreement (Series 1999-A), dated as of June 1, 1999, between Enterg Louisiana andParish of St Chaims Stateý of Louisiana (B-6() to0lUe 24 Certificate dated July 6, 1999 in 70-9141).
| |
| (c) 56- Refimding Agreement (Series 1999-B), dated as of June 1, 1999, between Ea:tagLouisiana and Parish of St Charles, State of Louisiana (B-6(b) to Rule 24 Certificate dated July 6, 1999 in 70-9141).
| |
| (q), 57- Refniding., Agreemnt (Series .1999-C),. dated .as. of Odober .1, 1999, between Entergy Louisiana and Parish of St Charles, State of Louisiana (B- l1(a) to Rule 24 Certificate dated October 15, 1999 in 70-9141).
| |
| () 158- Agremet as.:to*.Expa0n-apan-Liabilitis between Entergy Louisian. Inc. and Entergy Louisiana Capital I dated July 16, 1996 (4(d) to Form 10,Q for .te.quarter ended June 30, 1996 in 1-8474).
| |
| '..e) 59., Letter to John Wilder -offring .Eployment (10(b)62 to TForm 10-K for the year ended December 31, 1998 in 1-9067).
| |
| ( 1 - Agreement dated April 23, 1982, among Entergy Mississippi and certain other System companies, relating to System Planning and Devepment and Intra-System Transactions (10(a) Ito Form 10-K fortlie yearx, dedDec r3,14.1982,.in 1-3517).
| |
| (4 2 - Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)-2 in 2-410-80.). ... . .
| |
| (4 3 - Amendment, dated February 10, 1971, to Middle South Utilities System Agency Agrement,
| |
| .dated-December 11. l970(5(a)4.in.2-41080). .- , *..
| |
| (44 - Amendment, dated May 12, 1988, to Middle South Utilities System Agency Agreement, dated
| |
| . .Doemb.er 11, 1970.(5(a) 4 int2I410Q0). ..
| |
| (4 5 - Middle South Utilities System Agency Coordination Agremeent dated December 11, 1970 (5(a)-3 in 2-41080).
| |
| (4 6 4- Servia Agreement with Entergy Services, dated as of April 1,1963(D)in 3-63).
| |
| (4 7 - Amendment, dated January 1, 1972, to Service Agreement with Entergy Services (A to Notice, dated October 14, 1971, in 37-63).
| |
| "( 8 - ... Amendment, dated April 27, 1984, to Service Agreement ,ith Entergy: Services (10(a) 7 to Form 10-K for the year ended December 31, 1984, in 1-3517).
| |
| (4 9 - Amendment, dated as of August 1, 1988, to Service Agreement with Entergy Services (10(e) 8 to Form 10-K for the year ended December 31, 1988, in 0-320).
| |
| (4 109- Amendment, dated January 1. 1t991, to Service- Agreement with Entergy Services (10(e) 9 to Form 10-K for the year ended December 31, 1990, in,0-320).
| |
| E-29
| |
| | |
| ( 11- Amndunt, dated January 1 1992, toServiceiAgrement withEntergy Services (10(a)-1l to Form 10-K for the year ended December 31, 1994 in 1-3517).
| |
| (1) 12 though (f) 25 -- See 10(a); 10(a)-25above.
| |
| (f) 26- Installment Sale Agreement, dated as of June 1, 1974, between Entergy Mississippi and Washington Coniy, :Mississippi (B-2(a) to Rule 24 Certificate, dated,August 1, 1974, in 70
| |
| -5504).
| |
| (f) 27- Amended and Restated Installment Sale Agreement, dated as of April 1, 1994, between Entergy Mississippi and Warrw County,:Mississippi(B-6(a) to Rule 24 Certificate dated May 4, 1994, in 70-7914).
| |
| (f) 28- Amended and Restated Installment Sale Agreement, dated as of April 1, 1994, between i., Entergy Mississippi and Washington County; Mississippi, (B-6(b) to Rule 24 Certificate dated May 4, 1994, in 70-7914).
| |
| (f) 29- Refunding Agreement, dated as of May 1, 1999, between Entergy Mssissippi .ijd Idepedece County, Arkansas (B-6(a) to Rule 24 Certificate dated June 8, 1999 in 704719),
| |
| (f) 30- Substitute Powerý Ageem. nt, dated as of MayU 1, 1980, among-Entergy Mississippi, System Energy and SMEPA (B-3(a) in 70-6337).
| |
| (f) 31 - Amendment, dated Decmber 4, 1984, to the Independece 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, dated December 4, 1984, to the Independence Steam Electtic Station Ownership Agreement (10(c) 54 to Form 10-K for the year ended December 31, 1984, in 0-375).
| |
| (f) 33 - Owners Agreement, dated November 28, 1984;-among Entergy Arkansas, Entegy Mississippi and other co-owners of the Independence Station (10(c) 55 to Form 10-K for the year ended December 31, 1984;,in 0-375).
| |
| (f) 34- Consent, Agreement and Assumption, dated December 4, 1984, among Entergy Arkansas, Entergy Mississippi, other co-ogners of the Independence Station and United States Trust Company of New York, as Trustee (10(c) 56 to Form 10-K for the year ended December 31, 1984, in 0-375Y.
| |
| (f) 35 - Reallocation Agreement, dated as of July 28, 1981, among System Energy and certain other System companies (B-l(a) in 70-6624).
| |
| +(f) 36- Post-Retirement 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, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans (10(a) 39 to Form 10-K for the year ended December 31, 1982, in 1-3517).
| |
| E-30
| |
| | |
| between (f) 38- First Amendment to the Unit Power Sales Agrement, dated as of June 28, 1984, and Entergy System Energy and Entergy Arkmnsas, Entergy Louisiana, Entergy Mississippi, 1-3517).
| |
| New Orleans (19 to Form 10.0Q for the quarter ended September 30, 1984, in (f) 39- Revised Unit Power Sales Agreement (10(ss) in 334033).
| |
| and Entergy Mississippi (f) 40- Sales Agreement, dated as of June 21, 1974, between System Energy (D to Rule 24 Certificate, dated June 26, 1974, in 70-5399).
| |
| Entergy (f) 41 - Service Agreement, dated as of June 21, 1974, between iSystem Energy and Mississippi (E to Rule 24 Certificate, dated June 26, 1974, in 70-5399).
| |
| System Energy and (f) 42- Partial Termination Agreement, dated as of December 1, 1986,- between Entergy Mississippi (A-2 to Rule 24 Certificate dated January 8, 1987, in 70-5399).
| |
| Tax Allocation (f) 43- Middle South Utilities, Inc.: and Subsidiary Companies Intercompany Income December 31, 1987).
| |
| Agreement, dated April 28, 1988 (D-I to Form U5S for the year ended and Subsidiary (0 44- First Amendment dated January 1, 1990 to the Middle South Utilities Inc.
| |
| Agreem=t (D-2 to Form U5S for the year ended Companies Intercompany Tax Allocation December 31, 1989).
| |
| Subsidiary (f) 45- Second Amendment dated January 1, 1992, to the Entergy Corporation and for thel year Companies Intercompany Income Tax Allocation Agreement (D-3 to Form U5S ended December 31, 1992).
| |
| Companies
| |
| .(f) 46- Third Amendment dated: January 1, 1994 to Entergy Corporation and Subsidiary to. Form U5S for the year ended Interconmy Income Tax Allocation Agreenxent (D-3(a)
| |
| December 31, 1993).
| |
| (10(a) 52 to
| |
| +(f) 47 - Executive Financial Counseling Program of Entergy Corporation and Subsidiaries Form 10-K for the year ended December 31, 1989, in 1-3517).
| |
| year ended
| |
| +(f) 48- Entergy Corporation Annual Incentive Plan (10(a) 54 to Form 10-K for the December 31, 1989, in 1-3517).
| |
| to Rule 24
| |
| +(f) 49- Equity Ownership Plan of Entergy Corporation and. Subsidiaries (A,-4(a)
| |
| Certificate, dated May 24, 1991, in 70-783 1).
| |
| Subsidiaries
| |
| +(f) 50- Amendment No. 1 to the Equity Ownership Plan of Entergy Corporation and (10(a)71 to Form 10-K for the year ended December 31, 1992 in 1-3517).
| |
| Proxy
| |
| +(f) 51- 1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries (Filed with the Statement dated March 30, 1998).
| |
| 31, 1992
| |
| +(f) 52- Supplemental Retirement Plan (10(a)69 to Form 10-K for the year ended December in 1-3517).
| |
| E-3 1
| |
| | |
| +(f) 53 - Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries (10(a)53 to Form 10-K for the year ended December 31, 1989 in 1-3517.
| |
| +(f) 54 - Executive Disability Plan of Entergy Corpofation and Subsidiaries (10(a)72 to Form 10-K for the year ended December 31, 1992 in 1-3517).
| |
| +(f) 55- Stock Plan for Outside Directors of Entergy Corporation and Subsidiaries, as amended (10(a)74 to Form 10-K.fortheyear ended December 31, 1992 in.I-3517).
| |
| +(f) 56 - Agreement between Entergy Corporation and Jerry D. Jackson (10(a)-67 to Form 10-K for the year ended Debmber,31,'1992 in 1-3517).
| |
| 4(f) 57- Summary Description of Retired Outside Director Benefit Plan (10(c)-90 to Form 10-K for the year ended December 31, 1992 in 1-10764). .
| |
| 4(f) 58- Amendment to Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries
| |
| . (10(a) 81 to Form 10-K for theyear ended December 31, 1993 inI1-11299).
| |
| +(f) 59 - System Executive Retirement Plan (10(a) 92 to Form 10-K for the year ended December 31, 1993 in 1 1-1299)... - -`.l *a:.m
| |
| ..... e e.. en [,, ..
| |
| +(f) 60 - Letter to John Wilder offering Employment (10(b)62 to' Form 10-K for the year ended December 31, 1998 in 1-9067).
| |
| Entdiy New Orleans (g) 1 - Agreement, dated April 23, 1982, among Entrgy New Orleans and certain other System "companies, relating to System Planning and D pmen and-Intra'Sy T a 0-(10(a)-i to Form 1 K forthe yeatended Decemiei. 1H982, in. 1-3517).
| |
| (g) 2 - Middle South Utilities System Agency Agreement, dated December 11, 1970 (5(a)-2 in 2-41080).
| |
| (g) 3 - Amendment dated as of February 10, 1971, to Middle South Utilities System Agency Agreement, dated December 1I1 ,1970 (5(a)-4-in 2-41080). .
| |
| (g) 4 - Amendment, dated May 12, 1988, to Middle South Utilities System Agency Agreement, dalted December 11, 9 70 (5(a) 4 in 2-41080).
| |
| (g) 5 - Middle South Utilities System Agency Coordination Agreement, dated December 11, 1970 (5(a.)-3in2-41080).
| |
| (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 Agreement with Entergy Services (4(a)-6 in 2-45916).
| |
| (g) 8 - Amendment, dated as of April 27, 1984, to Service Agreement with Entergy Services (10(a)7 to Form 10-K for the year ended December 31, 1984, in 1-3517).
| |
| E-32
| |
| | |
| ..9 -- Amdment, datedasofAugust 1, 1.988, to Servic Agree.n.twith-EnWi -Services (10(f)-S to Form 10-K for the year ended December 31, 19i8; in 0-5807).
| |
| with'Entergy Services (10(f)-9 to (g) '10 ý Aihendmedt, dated January 4*,1991, td Servide Agreenict Form 10-KfortheyearendedDDecember31, 1990, id04807).'
| |
| (g l1 Atatedi'January 1gi1092, to Service Agreem(it with Entergy'rviees (10(a)- I to Form lb0Kforyearended December 31':1994 in .l3511). .
| |
| " 1' (g) 25 - See 10(a) 10(a)-25 above.
| |
| .6(g)6 'R*a*l-a** on Agreethen dated aof July 28, 198 'amog System Energy And ertain other System companies (B-1(a) in 70-6624).
| |
| ,+(g)1:2-7-, -sRreivinVPlan
| |
| .: t- (10(e) 22 to Femr:10-Kj..for the year-ended. Decembe 31, 1983, in 1-1319).
| |
| ."*g)" -' Unit P r .Sales Agreement dated as of June i0","1982, betwe Syst Eergy and Enter 39 to Arkansas, Entergy. Louisiana, Entergy Mississippi 'and' Enterg+r Nvw Orleas (10(a)
| |
| Form 10-K for the year ended December 31, 1982, in 1-3517).
| |
| (g) 29- First Amendment to the Unit Power Sales Agreewwt, datedas of Jun. 28, 1984, betweeni System Energy and Entergy Arkansas, Entergy Louisiana, Entergy Mississippi and Entergy
| |
| ? .: .New Orleans (19 to Form 10-Q for the quarter ended September.30,-1984, in:-3517).
| |
| (g) 30- Revised Unit Power Sales Agreement (10(ss) in 33"4033).
| |
| Entergy New (g) 31-. Transfer Agreement, dated as of June -28, 1983, among the City of New Orleans, Orleans and Regional Transit Authority (2(a) to Form 8-K, dated June 24, 1983, in 1-1319).
| |
| Middle South Utilities, Inc.:a*d Subsidiary Companies Intercompany Tax Allocation
| |
| .om (g) 32-(D-1 to Form U5S for the year ended December 31, 1987).
| |
| Agreement, dated April 28, 1988 (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 nded Deember 31, 1989). ,.- "
| |
| (g) 34- Second Amendment dated January 1, 1992, to the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Aliocation Agreement (D-3 to Fotm. USS for-the year ended December 31, 1992).
| |
| i-(g) 35- Third Amendment dated January 1, 1994. to Entergy *Corporation and Subd*diary Companies Intercompany Income Tax Allocation Agreement (D-3(a) to Form U5S for the year ended
| |
| **-, . December 31,1993), . ...
| |
| to
| |
| +(g) 36- Executive Financial Counseling Program of Entergy Corporation and Subsidiaries (10(a)52 Form 10-K for-the year ended December 31, 1989, in. 1-3517).
| |
| E-33
| |
| | |
| +(g) 37- Entergy. Corporation Annual Incentive Plan (I0(;)54 to -Form 10-K.for the year enqd December 31, 1989, in 1-3517). ... ,
| |
| +(g) 38 - Equity Ownerwhip 1lanwof Entergy.Corporation.-and Subsidiaries. (A-4(a) to Rule 24 Certificate, dated May 24,, 1991, in 70-7831). .
| |
| +(g) 39- Ameine.a, No. ito the.Equity Ownership Planqof Entergy Corporation and Subsidires, (10(a)71 to Form 10-K for the year ended Decenibr 31, 1992 in 1-3517).
| |
| +(g) 40 - 1998 Equity Ownership Plan of Entergy Corporation and Subsidiaries (Filed. wi.th the Ppoxy Statement dated March 30, 1998).
| |
| +(g) .41 .Supplanental Retiremnt Plan (10(a)69 to Form 10-K fbr the. year endedPecember 31, 1992 in 1-3517). . .
| |
| +(g) 42- Do.me Contribution Resoation Prait of-Enteigy .Corporation,and Subsidiaries (10(,)53 to Form 10-K for the year ended December 31, 1989 in 1-3517).
| |
| - +(g) 43 - gecuttya Dija-ty* Plan of E0ry, Corporation and $ubsidiaries. (10(a)72 to Fotmn.1J0-K for the yearended December 31,1992 in 1-351-7)."
| |
| +(g) 44- Stock Plan for Outside Directors of Entergy Corporation and Subsidiaries, as amended (1O(a)74to Fomnn 10 forthe.yar ended December-31, 1992 iu1-3517). ,..
| |
| +(g) 45- AgrMent beween Enterg Copoan and Jerry A. Jackson (10(a)-67 to Form 10-K for the year ended December 31, 1992 in 1-3517).
| |
| +(g) 46- Summary Description of Re*ired Outside Director Benefit Plan (10(c)-90 to Form 10-K for -ie
| |
| , yYear ended December 31,J)992 in 1-10764).
| |
| +(g) 47 - Amendment to Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries (10(4)31 to Form,-.QK for the year ended December 31, 1993 in 1-1.1299),.:.
| |
| +(g) 48 - System Executive Retirement Plan (10(a) 82 to Form 10-K for the year ended December 31, 1993 in 1-11299),,
| |
| +(g) 49- Letter to John Wilder offering Employment (10(b)62 to Form: 10-K for the year ended December 31, 1998 in 1-9067).
| |
| (12) Statemeant ReComputation.of Ratios
| |
| *(a) Entergy Arkansas's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed
| |
| . Charges and Preferred Dividends, as defin.e.
| |
| *(b) Entergy Gulf States' Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined.
| |
| *(c) Entergy Louisiana's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Preferred Dividends, as defined.
| |
| E-34
| |
| | |
| *(d) Entergy Mississippi's Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Prefered Dividends, as defined.
| |
| *(e) Entergy New Orleans' Computation of Ratios of Earnings to Fixed Charges and of Earnings to Fixed Charges and Prefered Dividends, as defined.
| |
| *(f) System Energys Computation of Ratios of Earnings to Fixed Charges, as defined.
| |
| *(21) Subsidiaries of the Registrants (23) 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 forEntergy 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 Fntrg Gulf States as of December 31, 1999.
| |
| *(d) Financial Data Schedule for Fsntergy Louisiana as of December 31, 1999.
| |
| *(e) Financial Data Schedule for Entergy Mississippi as of December 31, 1999.
| |
| *(f) Financial Data Schedule for Entergy New Orleans as of December 31, 1999.
| |
| *(g) Financial Data Schedule for System Energy as of December 31, 1999.
| |
| * Filed herewith.
| |
| + Management contracts or compensatory plans or arangements.
| |
| E-35
| |
| | |
| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
| |
| ENCLOSURE 3 Entergy Corporation Moody's and Standard and Poor's Bond Ratings (1997,1998, 1999)
| |
| | |
| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
| |
| ENCLOSURE 3 Moody's and Standard and Poor's Bond Ratings (As of 12/1/00)
| |
| First Mortgage Bonds Moody's S&P 1997 1998 1999 1997 1998 1999 Entergy Arkansas, Inc Baa2 Baa2 Baa2 BBB+ BBB+ BBB+
| |
| Entergy Gulf States, Inc. Baa3 Baa3 Baa3 BBB BBB BBB Entergy Louisiana, Inc. Baa2 Baa2 Baa2 BBB BBB BBB Entergy Mississippi, Inc. Baa2 Baa2 Baa2 BBB+ BBB+ BBB+
| |
| Entergy New Orleans, Inc. Baa2 Baa2 Baa2 BBB BBB BBB System Energy Resources, Inc. Baa3 Baa3 Baa3 BBB- BBB- BBB-I
| |
| | |
| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
| |
| ENCLOSURE 4 Asset Purchase and Sale Agreement (without schedules)
| |
| Between Consolidated Edison Co. of New York, Inc.
| |
| and Entergy Nuclear Indian Point 2, LLC
| |
| | |
| CONFORMED COPY GENERATING PLANT AND GAS TURBINE ASSET PURCHASE AND SALE AGREEMENT FOR INDIAN POINT GENERATING STATION UNITS 1 AND 2 AND GAS TURBINE UNITS 1, 2 AND 3 AND TODDVILLE TRAINING CENTER LOCATED AT VILLAGE OF BUCHANAN AND/OR THE TOWN OF CORTLANDT WESTCHESTER COUNTY, NEW YORK By and Between CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
| |
| and ENTERGY NUCLEAR INDIAN POINT 2, LLC Dated as of November 9, 2000
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| TABLE OF CONTENTS Page ARTICLE I Definitions SECTION 1.01. Definitions ............. ................ 1 SECTION 1.02. Accounting Terms ........ ............. 23 ARTICLE II Purchase and Sale; Assumption of Certain Liabilities SECTION 2.01. Purchase and Sale ......... 23 SECTION 2.02. Auctioned Assets and Retained Assets. 23 SECTION 2.03. Assumed Obligations and Retained Liabilities . . . . . . . . . . . . 29 SECTION 2.04. Third Party Consents .... .......... 34 SECTION 2.05. Franchise Property ...... .......... *.35 ARTICLE III Closing SECTION 3.01. Time and Place of Closing ... ........ 35 SECTION 3.02. Purchase Price ........ .............. 35 SECTION 3.03. Post-Closing Adjustment ..... ......... 38 SECTION 3.04. Allocation of Consideration ... ....... 39 ARTICLE IV Representations and Warranties of Seller SECTION 4.01. Organization; Qualification ..... 40 SECTION 4.02. Authority Relative to This Agreement 40 SECTION 4.03. Consents and Approvals; No Violation 41 SECTION 4.04. Personal Property .......... 43 SECTION 4.05. Real Estate . . . . . . . . . . . . . 43 SECTION 4.06. Leases ............ ................ 43 SECTION 4.07. Contracts . . . . . . . . . . . . . . 43 SECTION 4.08. Legal Proceedings .......... 44 SECTION 4.09. Permits; Compliance with Law ........ 44 SECTION 4.10. Environmental Matters ........ 45 SECTION 4.11. Labor Matters . . . . . . . . . . . . 46 SECTION 4.12. ERISA; Benefit Plans .... .......... 46 SECTION 4.13. Taxes . . . . . . . . . . . . . . . . 47 SECTION 4.14. Undisclosed Liabilities ....... 48
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| | |
| Page SECTION 4.15. Brokers . . . . . . . . . . . . . 48 SECTION 4.16. Insurance ............ * . 48 SECTION 4.17. Nuclear Matters ........ * . 49 SECTION 4.18. Qualified Decommissioning Fund . * . 49 SECTION 4.19. Nonqualified Decommissioning Fund 50 SECTION 4.20. Sufficiency of Auctioned Assets * . 51 SECTION 4.21. Condemnation .... ............. . . 51 SECTION 4.22. No Change in Accounting Methods or Practices . . . . . . . . ... . 51 ARTICLE V Representations and Warranties of Buyer SECTION 5.01. Organization. ...... ............... 52 SECTION 5.02. Authority Relative to This Agreement 52 SECTION 5.03. Consents and Approvals; No Violation 52 SECTION 5.04. Availability of Funds ........
| |
| * 54 SECTION 5.05. Brokers . . . . . . . . . . . . . . .
| |
| * 54 ARTICLE VI Covenants of the Parties SECTION 6.01. Conduct of Business Relating to the Auctioned Assets ..... ......... * . . 54 SECTION 6.02. Access to Information ....... * . . 57 SECTION 6.03. Consents and Approvals; Transferable D -,-m 1-58 SECTION 6.04. Further Assurances ........ ............. 60 SECTION 6.05. Public Statements ............ 61 SECTION 6.06. Tax Matters . . . . . . . . . . . . . . . 62 SECTION 6.07. Decommissioning Funds .......... 63 SECTION 6.08. Decommissioning ............. 64 SECTION 6.09. Bulk Sales or Transfer Laws ....... 65 SECTION 6.10. Storage And Risk of Loss Concerning Certain Auctioned Assets ........ ............. 65 SECTION 6.11. Information Resources .......... 65 SECTION 6.12. Witness Services ........ ............... 66 SECTION 6.13. Trade Names . . ... . . . . . . . . . . . 67 SECTION 6.14. Steam Generator Storage Facility ........ 67 SECTION 6.15. Availability of Cooling Water Usage Credits ........... ................ 67 SECTION 6.16. Nuclear Insurance ....... ............ 68 SECTION 6.17. Update of Schedules ..... ........... 68
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45aj
| |
| | |
| Page ARTICLE VII Conditions SECTION 7.01. Conditions Precedent to Each Party's Obligations ............ . . 69 SECTION 7.02. Conditions Precedent to Obligation of Buyer . . . . . . . . . . . . . . . * . 70 SECTION 7.03. Conditions Precedent to Obligation of Seller . . . . . . . . . . . . . * . 74 ARTICLE VIII Employee Matters SECTION 8.01. Employee Matters............ ..... 76 SECTION 8.02. Continuation of Equivalent Benefit Plans/Credited Service ... ........ 78 SECTION 8.03. Pension Plan ........ .............
| |
| * 80 SECTION 8.04. 401(k) Plan
| |
| * 81 SECTION 8.05. Welfare Plans ......... 82 SECTION 8.06. Short- and Long-Term Disability . . 83 SECTION 8.07. Life Insurance and Accidental Death and Dismemberment Insurance ...... 84 SECTION 8.08. Severance . . . . . . . . . . . . . . 84 SECTION 8.09. Workers Compensation .... .......... 86 ARTICLE IX Indemnification and Dispute Resolution SECTION 9.01. Indemnification ...... ............. 86 SECTION 9.02. Third Party Claims Procedures .. ...... 89 SECTION 9.03. Procedures Relating to Tax Indemnity . . . 91 ARTICLE X Termination SECTION 10.01. Termination ........ ............... 92 ARTICLE XI Miscellaneous Provisions SECTION 11.01. Expenses S.... . . . . . . . . . . . 94
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
| |
| | |
| Paae SECTION 11.02. Amendment and Modification; Extension; Waiver . . . . . . . . . . . . . . . . 94 SECTION 11.03. Survival of Representations or Warranties . . . . . . . . . . . . . . 94 SECTION 11.04. Notices ......... .................. . 95 SECTION 11.05. Assignment; No Third Party Beneficiaries ........ .............
| |
| * 95 SECTION 11.06. Governing Law ........ .............. . 97 SECTION 11.07. Counterparts . . . . . . . . . . . . .
| |
| * 97 SECTION 11.08. Interpretation . ........ . . .
| |
| * 97 SECTION 11.09. Jurisdiction and Enforcement .....
| |
| * 98 SECTION 11. 10. Entire Agreement ...........
| |
| * 99 SECTION 11.11. Severability . . . . . . . . . . . . .
| |
| * 99 SECTION 11.12. Conflicts ............ ............. . .
| |
| * 99 SCHEDULES AND EXHIBITS Schedule 2.02(a) (i) (A) Buyer Real Estate-Indian Point Schedule 2.02(a) (i) (B) Buyer Real Estate-GT Site Schedule 2.02(a) (i) (C) Buyer Real Estate-Toddville Schedule 2.02(a) (ii) Spare Parts Schedule 2.02(a) (iii) Buyer Personal Property Schedule 2.02(a) (iv) Contracts Schedule 2.02(a) (v) Transferable Permits Schedule 2.02(a) (x) Nitrogen Oxide Allowances Schedule 2.02(b) (i) Seller Personal Property Located on Buyer Real Estate Schedule 2.02(b) (ii) (B) Communications Equipment Schedule 2.05(a) Franchise Property Schedule 3.02(c) (iv) Capital Projects Schedule 3.02(c) (vi) Remediation Schedule 3.02(c) (vii) Low-level Radioactive Waste Removal Schedule 3.03(a) Fuel Inventory Methodology Schedule 4.03(a) Contracts Requiring Third Party Consents Schedule 4.04(b) Exceptions to Technical Specifications Schedule 4.06 Leases Schedule 4.07(a) Contracts Retained by Seller Schedule 4.08 Legal Proceedings Schedule 4.09(a) Exceptions Under Permits Schedule 4.09(b) Non-Environmental Violations Schedule 4.10 Environmental Matters Schedule 4.11 Labor Matters Schedule 4.12 Benefit Plans Schedule 4.13 Statute of Limitations for Taxes Schedule 4.14 Undisclosed Liabilities Schedule 4.16(a) Insurance
| |
| [NYCorp;1173312.1:4738W:11/14/OO-11:45a]
| |
| | |
| Schedule 4. 16 (b) Insurance Exceptions Schedule 4.17 Nuclear Matters Schedule 6.01(b) (vi) Employment Matters Schedule 6.01(c) (i) Contracts Entered Into Without Consent of Buyer Schedule 6.01(c) (ii) Capital Projects-Dollar Amounts Schedule 6.01 (c) (iii) Remediation-Dollar Amounts Schedule 7.02(d) (i) Required Contracts Schedule 7.02(d) (ii) Required Software Schedule 8.01 (a) Job Titles Schedule 8.01(b) Collective Bargaining Agreements Exhibit A-I Form of Deed of Conveyance for Westchester County [Land and Improvements]
| |
| Exhibit A-2 Form of Deed of Conveyance for Westchester County [Improvements on GT Site]
| |
| Exhibit A-3 Form of GT Site Ground Lease Exhibit A-4 Form of Declaration of Easements Agreement Exhibit B Form of FIRPTA Affidavit Exhibit C Form of Opinion of John D. McMahon, Esq.,
| |
| General Counsel of Seller Exhibit D Form of Affidavit Exhibit E Form of Opinion of General Counsel of Buyer and Entergy Nuclear, Inc.
| |
| Exhibit F Form of Guarantee Agreement Exhibit G Form of Opinion of Counsel to Guarantor Exhibit H Form of Bill of Sale Exhibit I Application for Service for Non-Residential Customers Exhibit J Direct Retail Customer Operating and Transmission Service Agreement Exhibit K Direct Customer Operating Agreement INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| | |
| GENERATING PLANT AND GAS TURBINE ASSET PURCHASE AND SALE AGREEMENT (including the Schedules hereto, this "Aqreement") dated as of November 9, 2000, by and between CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New York corporation ("Seller"), and ENTERGY NUCLEAR INDIAN POINT 2, LLC, a Delaware limited liability company
| |
| ("Buyer") (Buyer and Seller are sometimes herein referred to collectively as the "Parties" and individually as a "Party").
| |
| WHEREAS Seller has conducted an auction process in which it has solicited proposals to purchase the Auctioned Assets (as defined herein); and WHEREAS Buyer desires to purchase, and Seller desires to sell, the Auctioned Assets upon the terms and conditions hereinafter set forth.
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| NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements hereinafter set forth, and intending to be legally bound hereby, the Parties agree as follows:
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| ARTICLE I Definitions SECTION 1.01. Definitions. As used in this Agreement, the following terms have the following meanings:
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| "Accountants" shall have the meaning set forth in Section 3.03(b) .
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| "Adjustment Amount" shall have the meaning set forth in Section 3.03(a).
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| "Adjustment Date" shall have the meaning set forth in Section 3.03(c).
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| "Adjustment Statement" shall have the meaning set forth in Section 3.03(a).
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| "Affected Employees" shall have the meaning set forth in Section 8.01(a).
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| "Affected Union Employees" shall have the meaning set forth in Section 8.01(b).
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| INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 2 "Affiliate" shall have the meaning set forth in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended.
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| "Agreement" shall have the meaning set forth in the Preamble.
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| "Allocation" shall have the meaning set forth in Section 3.04.
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| "Ancillary Agreements" means the Continuing Site Agreement, the Declaration of Easements Agreement, the GT Site Ground Lease, the Power Purchase Agreement, the Bill of Sale, the deeds contemplated by Section 7.02(e) (i) and any other agreement to which Buyer and Seller are party and which is expressly identified by its terms as an Ancillary Agreement hereunder.
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| "ANI" means American Nuclear Insurers.
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| "Assumed Obligations" shall have the meaning set forth in Section 2.03(a).
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| "Atomic Energy Act" means the Atomic Energy Act of 1954, as amended, and the rules and regulations promulgated thereunder.
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| "Auctioned Assets" shall have the meaning set forth in Section 2.02(a).
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| "Benefit Plans" shall have the meaning set forth in Section 4.12.
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| "Bidder Confidentiality Agreements" shall have the meaning set forth in Section 6.02(b).
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| "Bill of Sale" shall have the meaning set forth in Section 7.02(q) (i).
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| "Bowline" shall have the meaning set forth in Section 6.15(b).
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| "Business Day" means any day other than Saturday, Sunday and any day which is a legal holiday or a day on which banking institutions in New York are authorized or required by Law or other action of a Governmental Authority to close.
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| "Buyer" shall have the meaning set forth in the Preamble.
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 3 "Buyer Assets" means any property, machinery, equipment, facilities or systems (including Buyer Facilities) that are from time to time owned or leased by Buyer or its Affiliates after Closing and are employed by Buyer in connection with the performance of the activities contemplated by the Ancillary Agreements.
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| "Buyer Benefit Plans" shall have the meaning set forth in Section 8.02(c).
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| "Buyer Decommissioninq Funds" means the trust funds maintained by Buyer into which the Decommissioning Funds are transferred at Closing, or any successor funds thereto.
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| "Buyer Facilities" shall mean the "Buyer Facilities" under the Declaration of Easements Agreement.
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| "Buyer Indemnitees" shall have the meaning set forth in Section 9.01(a).
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| "Buyer Material Adverse Effect" shall have the meaning set forth in Section 5.03(a).
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| "Buyer Real Estate" shall have the meaning set forth in Section 2.02(a)(i).
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| "Buyer Required Requlatory Approvals" shall have the meaning set forth in Section 5.03(b).
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| "Buyer's 401(k) Plans" shall have the meaning set forth in Section 8.04(a).
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| "Buyer's Pension Plans" shall have the meaning set forth in Section 8.03(a).
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| "Buyer's Severance Plan" shall have the meaning set forth in Section 8.08(a).
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| "Buyer's Welfare Plans" shall have the meaning set forth in Section 8.05(a).
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| "Closing" shall have the meaning set forth in Section 3.01.
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| "Closing Date" shall have the meaning set forth in Section 3.01.
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| [NYCorp;1173312.1:4738W:11/14/OO-11:45a]
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| 4 "COBRA" means the Consolidated Omnibus Budget Reconciliation Act.
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| "Code" means the Internal Revenue Code of 1986, as amended.
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| "Collective Bargaining Agreement" shall have the meaning set forth in Section 8.01(b).
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| "Communications Equipment" means the equipment, systems, switches and lines used in connection with voice, data and other communications activities.
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| "Confidentiality Agreement" means the Confidentiality Agreement dated February 1, 2000 between Seller and Buyer.
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| "Consent Order" shall have the meaning set forth in Section 6.15(a).
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| "Consumer Price Index" shall have the meaning set forth in Section 6.08(b).
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| "Continued Employees" shall have the meaning set forth in Section 8.01(a).
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| "Continued Employee Records" shall have the meaning set forth in Section 2.02(a) (vi).
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| "Continued Non-Union Employee" shall have the meaning set forth in Section 8.02(a).
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| "Continued Union Employee" shall have the meaning set forth in Section 8.01(b).
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| "Continuing Site Agreement" means the Continuing Site Agreement dated as of even date herewith between Seller and Buyer.
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| "Contracts" shall have the meaning set forth in Section 2.02(a) (iv)
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| "Conveyance Plans" means the Indian Point Conveyance Plan and the Toddville Conveyance Plan.
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| "Declaration of Easements Agreement" means the Declaration of Easements Agreement to be entered into between Seller and Buyer in the form of Exhibit A-4.
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| "Decommissioning" means the complete retirement and removal of the Auctioned Assets from service and INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 5 the restoration of the Buyer Real Estate (and all surface and subsurface elements thereof including soils, surface water and groundwater), as well as any planning and other activities relating thereto, including (i) the dismantlement, decontamination, removal, storage or entombment of the Auctioned Assets, in whole or in part, and any reduction or removal, whether before or after termination of the NRC operating license for the Auctioned Assets, of radioactivity at the Buyer Real Estate (and all surface and subsurface elements thereof including soils, surface water and groundwater), and (ii) any activities necessary for the retirement, dismantlement, decontamination, removal, storage and entombment of the Auctioned Assets to comply with applicable Laws, the NRC operating license for the Auctioned Assets and any related decommissioning plan. "Decommission" shall have a correlative meaning.
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| "Decommissioning Accountinq Records" shall have the meaning set forth in Section 2.02(a) (vi).
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| "Decommissioninq Funds" means the Qualified Decommissioning Fund and the Nonqualified Decommissioning Fund, collectively.
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| "Decommissionina Indentures" means the Master Nuclear Decommissioning Trust Agreement between Seller and Harris Trust and Savings Bank made as of December 30, 1988, as amended, regarding the Qualified Decommissioning Fund (it being understood that Mellon Bank (DE) National Association, rather that Harris Trust and Savings Bank, is currently Trustee) and the Master Nuclear Decommissioning Trust Agreement between Seller and Harris Trust and Savings Bank made as of June 30, 1993, as amended, regarding the Nonqualified Decommissioning Fund (it being understood that Mellon Bank (DE) National Association, rather than Harris Trust and Savings Bank, is currently Trustee).
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| "Decon" means the process by which the radioactive structures, systems, components and equipment of a generating facility are removed or decontaminated to a level that permits termination of such facility's NRC operating license after cessation of operations and release of such facility by the NRC in accordance with applicable NRC regulations.
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| "Deeds" shall have the meaning set forth in Section 7.02(e).
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 6 "Department of Energy" means the United States Department of Energy or any successor thereto.
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| "Department of Enerqy Decontamination and Decommissioning Fees" means all fees related to the Department of Energy's Special Assessment of utilities for the Uranium Enrichment Decontamination and Decommissioning Fund pursuant to the Atomic Energy Act, or any similar fees assessed under applicable Law relating to separative work units purchased from the Department of Energy in order to decommission the Department of Energy's gaseous diffusion enrichment facilities.
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| "DOE Standard Contract" means the Contract For Disposal of Spent Nuclear Fuel And/Or High Level Radioactive Waste, No. DE-CR01-83-NE44373, dated as of June 17, 1983, between the United States of America, represented by the United States Department of Energy, and Seller, as amended.
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| "Electric Service Contract" means an agreement for service in accordance with Seller's Schedule for Electricity Service, P.S.C. No. 9 - Electricity or Seller's Schedule for Retail Access, P.S.C. No. 2 Retail Access, as such Schedules may be revised or superseded from time to time, using (i) an Application for Service for Non-Residential Customers in the form of Exhibit I, (ii) a Direct Retail Customer Operating and Transmission Service Agreement in the form of Exhibit J and (iii) a Direct Customer Operating Agreement in the form of Exhibit K.
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| "Encumbrances" means any mortgages, pledges, liens, security interests, conditional and installment sale agreements, activity and use limitations, exceptions, easements, rights-of-way, deed restrictions, encumbrances, charges of any kind, and any related documents and/or instruments of record.
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| "Energy Reorganization Act" means the Energy Reorganization Act of 1974, as amended, and the rules and regulations promulgated thereunder.
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| "ENO" means Entergy Nuclear Operations, Inc., an Affiliate of Buyer.
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| "Entomb" means the process by which radioactive structures, systems, components and equipment of a generating facility are encased in a structurally long lived substance, such as concrete, whereby the entombed INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 7 structure is appropriately maintained, and continued surveillance is carried out until the radioactivity decays to a level that permits termination of the NRC operating licenses for such facility.
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| "environment" (i) means ambient air, surface water and groundwater (including potable water, navigable water and wetlands), land surface or subsurface strata or (ii) shall have the meaning set forth in any Environmental Law.
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| "Environmental Laws" means all former, current and future federal, state, local and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees, judgments, directives, orders (including consent orders), Environmental Permits and New York State Department of Environmental Conservation Technical Administrative Guidance Memoranda, in each case, relating to pollution, protection of the environment, natural resources or human health and safety, including laws relating to the presence, Release of, or exposure to, Hazardous Substances, or otherwise relating to the generation, manufacture, processing, distribution, use, treatment, storage, transport, recycling or handling of, or arrangement for such activities with respect to, Hazardous Substances.
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| "Environmental Liability" means all liabilities, obligations, claims, causes of action, actions, suits, judgments, orders, damages, injunctive relief, losses, fines, penalties, fees, expenses and costs arising from, relating to, or in connection with or alleged to arise from, relate to, or be connected with (i) any actual or alleged violation of or compliance or noncompliance with, Environmental Laws prior to, on, or after the Closing Date in connection with the Auctioned Assets or any ownership, operation, maintenance or control thereof; (ii) the presence, Release, use or generation of, or exposure to, Hazardous Substances at, in, under, upon, above, in connection with, or migrating to or from the Auctioned Assets prior to, on, or after the Closing Date or the transportation, or the arrangement thereof, of Hazardous Substances to or from the Auctioned Assets prior to, on, or after the Closing Date; (iii) any action to address such presence, Release, use or generation of, or exposure to, Hazardous Substances at, in, under, upon, above, in connection with, or migrating to or from the Auctioned Assets, whether such action commenced before or commences on or after the Closing Date, including (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 8 (A) sampling, analysis, monitoring, investigation, assessment, treatment, remediation, cleanup, containment, removal, mitigation, response, Decommissioning, closure, restoration, reclamation, institutional controls, deed restrictions, evacuation or "precautionary evacuation" (as defined under the Atomic Energy Act and the rules and regulations promulgated thereunder); (B) obtaining any Permits or Environmental Permits or NRC Permits necessary to conduct or cease any such activities; (C) preparing and implementing any plans or studies for any such activities; (D) fees and expenses of engineers, consultants, laboratories and attorneys; and (E) permitting and licensing fees, administrative oversight costs, insurance premiums and related costs and costs to establish and maintain financial assurance funds; and (iv) any loss of life, injury to persons, property or business or damage to natural resources (regardless of whether such loss, injury or damage arose or was made manifest or is alleged to have arisen or manifested itself prior to, on, or after the Closing Date) arising from, relating to, or in connection with or alleged to arise from, relate to, or be connected with any of the matters described in (i), (ii) or (iii) above.
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| "Environmental Permits" means all permits, licenses, consents, approvals and other governmental authorizations with respect to Environmental Laws relating primarily to the operations of the Generating Plants or the Gas Turbines, but not including any NRC Permits.
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| "ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
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| "ERISA Affiliate" shall have the meaning set forth in Section 4.12.
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| "Estimated Adjustment Amount" shall have the meaning set forth in Section 3.02(d).
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| "Estimated Closing Statement" shall have the meaning set forth in Section 3.02(d).
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| "Excess Decommissioning Funds" means, as of the Expiration Date, the amount, if any, by which the aggregate Decommissioning funds held by Buyer exceed the estimated cost to Buyer of Decommissioning by Safstor or Entomb. For purposes of this definition, the estimated cost to Buyer of Decommissioning by INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 9 Safstor or Entomb shall be determined as of the Expiration Date in accordance with the cost estimates filed with the NRC by Buyer and standard industry practices.
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| "Expiration Date" shall have the meaning set forth in Section 6.08.
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| "Fair Market Value" means, with respect to the assets of the Decommissioning Funds, the value of such assets (including any accrued interest and dividends relating to such assets) as of the close of the Business Day immediately preceding the Closing Date, which fair market value shall be determined based on a statement prepared on behalf of Seller on a basis consistent with past practice by the financial institutions managing the Decommissioning Funds and listing such assets, together with the purchase price and fair market value of each asset.
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| "FERC" means the Federal Energy Regulatory Commission or any successor thereto.
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| "Federal Power Act" shall have the meaning set forth in Section 4.03(b).
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| "Final Order" shall have the meaning set forth in Section 7.01(a).
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| "Franchise Property" shall have the meaning set forth in Section 2.05(a).
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| "GAAP" shall have the meaning set forth in Section 1.02.
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| "Gas Turbines" means the three gas turbines designated as Indian Point Gas Turbine Units 1, 2 and 3.
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| "Generating Facilities" means the Generating Plants, the Gas Turbines and any additional generating plants, gas turbines or other generating facilities constructed by Buyer after the Closing Date at the site of any Auctioned Assets.
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| "Generating Plants" means the two nuclear generating units designated as and known as Indian Point Unit 1 and Indian Point Unit 2.
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| "Governmental Authority" means any federal, state, local, domestic or foreign government or any court, INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 10 administrative or regulatory agency, board, committee or commission or other governmental entity or instrumentality, domestic, foreign or supranational any department thereof. or "Greenfield" means the complete decontamination, dismantlement, and removal of a generating facility such that the NRC operating license for such is terminated and the site at which such facility facility located is restored to an unrestricted and natural is state.
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| "GT Site" shall have the meaning set forth in Section 2 .02(a) (i) (B) (1).
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| "GT Site Ground Lease" means the GT Site Ground Lease to be entered into between Buyer and Seller in the form of Exhibit A-3.
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| "Guarantee Aqreement" means the Guarantee Agreement to be entered into between Guarantor Seller substantially in the form of Exhibit and F.
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| "Guarantor" means Entergy International Ltd LLC, a Delaware limited liability company Holdings and an Affiliate of Buyer.
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| "Hazardous Substances" means (i) any petroleum, petroleum products or byproducts and all other hydrocarbons, petrochemicals, crude oil or any thereof, coal ash, radon gas, asbestos, asbestosfraction containing material, urea formaldehyde, polychlorinated biphenyls, chlorofluorocarbons and other ozone-depleting substances; (ii) radiation, radioactive materials or wastes, including "low-level" or "high-level radioactive wastes," "source material,"
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| "special nuclear material," "byproduct "spent nuclear fuel," and "transuranic material,"
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| waste," as those terms are defined under the Atomic Energy Act; (iii) and any chemical, material, substance or waste (including thermal discharges) that is prohibited, limited or regulated by or pursuant to any Environmental Law.
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| "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
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| "Income Tax" means any U.S. federal, state, or foreign Tax or surtax (i) based upon, measured local calculated with respect to net income, profits by or or (NYCorp;1173312.1:4738W:11/14/00-1 : 4 5 aI 1
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| 11 receipts, including the New York State Gross Receipts Tax (including any municipal gross receipts Taxes and excise Taxes, capital gains Taxes and minimum Taxes) or (ii) based upon, measured by or calculated with respect to multiple bases (including corporate franchise Taxes) if one or more of the bases on which such Tax may be based, measured by or calculated with respect to, is described in clause (i), in each case, together with any interest, penalties, or additions to such Tax.
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| "Indemnifiable Loss" shall have the meaning set forth in Section 9.01(a).
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| "Indemnifying Party" shall have the meaning set forth in Section 9.01(c).
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| "Indemnitee" shall have the meaning set forth in Section 9.01(c).
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| "Independent Appraiser" shall have the meaning set forth in Section 3.04.
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| "Indian Point Conveyance Plan" means the ALTA/ACSM Land Title Survey prepared for Consolidated Edison Company of New York, Inc., captioned "Indian Point Generating Station Site Survey" (Sheets 1 - 7) completed on August 2, 2000 (Buyer Parcel - Indian Point) and August 17, 2000 (Buyer Parcel - GT Site),
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| last revised on October 27, 2000, and prepared by Badey
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| & Watson Surveying & Engineering, PC, as may hereafter be amended by Seller in immaterial respects.
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| "Indian Point Unit 1" means the nuclear generating unit located in the Village of Buchanan, New York designated as and known as Indian Point Unit 1.
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| "Indian Point Unit 2" means the nuclear generating unit located in the Village of Buchanan, New York designated as and known as Indian Point Unit 2.
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| "Information Memorandum" means the Information Memorandum dated January 2000 describing the Generating Plants and the Gas Turbines, and the materials delivered with such Information Memorandum, as such Information Memorandum and such materials may have been amended or supplemented.
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| "Intellectual Property" means all trade secrets, copyrights, copyright applications, trademarks, trademark applications, trade names, service marks,
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| [NYCorp;1173312.1:4 738W:11/14/00-11:45a]
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| 12 service mark applications, designs, samples, specifications and know-how owned by Seller.
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| "Interconnection Facilities" means switching equipment, switchyard controls, protective relays and related facilities of Seller that are used by Seller in connection with the provision of Interconnection Services.
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| "Interconnection Services" means the service provided by Seller to Buyer to interconnect the Generating Facilities to the Transmission System.
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| "Inventory" means all materials and supplies (other than fuel, Nuclear Fuel or Spent Nuclear Fuel),
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| spare parts (including the spare parts listed in Schedule 2.02(a) (ii)) and chemical and gas inventories owned by Seller at Closing and relating primarily to or used primarily in the operation of the Generating Plants and the Gas Turbines.
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| "IRS" means the Internal Revenue Service or any successor thereto.
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| "ISO" means the New York Independent System Operator or any successor thereto.
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| "joint rulings" shall have the meaning set forth in Section 6.06(e).
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| "Knowledge" means the actual, current knowledge (without independent investigation) of a Party's or its Affiliates' board of directors, any of their officers or managers or any of the following persons: Dan Keuter, Connie Wells, Curt Bregar, Renee Millison, Stuart Wentworth, Carl Crawford, Brent Dorsey, Dan Churchman, Jay Brister, Jay Adler, Dan Ropson, Frank Rives or Tom Ober.
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| "Law" means any statute, law (including common law), treaty, order, judgment, decree, directive, code, ordinance, rule or regulation or similar issuance by a Governmental Authority having the effect of law.
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| "Local 1-2" shall have the meaning set forth in Section 8.01(a).
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| "Local 1-2 Collective Bargaining Agreement" shall have the meaning set forth in Section 8.01(b).
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| INYCorp;1173312.1:4738W: 11/14/00-11:45a]
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| 13 "Low-level Radioactive Waste" shall have the meaning set forth in 42 U.S.C.A. § 2021b(9) (1994) and the rules and regulations promulgated thereunder.
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| "Material Adverse Effect" means any change or effect on the Auctioned Assets that is materially adverse to the business, operations or condition (financial or otherwise) of the Auctioned Assets, taken as a whole, other than (i) any change or effect resulting from changes in the international, national, regional or local wholesale or retail energy, capacity or ancillary services markets, (ii) any change or effect resulting from changes in the international, national, regional or local markets for fuel used or usable in connection with the Generating Facilities, (iii) any change or effect resulting from changes in the national, regional or local electric transmission systems, (iv) any change or effect resulting from any bid cap, price limitation, market power mitigation measure or other Law in respect of transmission services or the wholesale or retail energy, capacity or ancillary services markets adopted or approved (or failed to be adopted or approved) by any Governmental Authority or proposed by any person, (v) any change or effect resulting from any other Law adopted or approved by any Governmental Authority or proposed by any person (other than any change or effect resulting from (a) any New York State Law that becomes effective after the date of this Agreement or (b) any NRC Law that becomes effective after the date of this Agreement and relates solely to the Auctioned Assets), (vi) any change or effect resulting from any regulation, rule, procedure or order adopted or proposed (or failed to be adopted or proposed) by or with respect to, or relating to, the ISO, (vii) any change or effect resulting from any action or measure taken or adopted, or proposed to be taken or adopted, by any local, state, regional, national or international reliability organization and (viii) any materially adverse change in or effect on the Auctioned Assets which is cured by Seller prior to Closing.
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| "Metaphase" means the Corporate Drawing Management System, which is an information resources system served by Seller's mainframe computer.
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| "MMS" means the Material Management System, which is an information resources system served by Seller's mainframe computer.
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| "NEIL" means Nuclear Electric Insurance Limited.
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 14 "1975 Deed" shall have the meaning set forth in Section 7.02(j).
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| "Nitrogen Oxide Allowance" means the authorizations by the NYSDEC under the NOx Budget Trading Program to emit up to one ton of nitrogen oxides during the control period of the specified year or any year thereafter.
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| "Non-Disputed Amount" shall have the meaning set forth in Section 3.02(b).
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| "Nonqualified Decommissioning Fund" means the external trust fund that does not meet the requirements of Section 468A of the Code and Treas. Reg.
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| Section 1.468A-5, and which is maintained by Seller with respect to the Auctioned Assets prior to Closing pursuant to the applicable Decommissioning Indenture.
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| "Non-Union Transition Period" shall have the meaning set forth in Section 8.02(a).
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| "NPMEL" means the Nuclear Power Material Equipment List, which is a system that uses extract data from PPMIS.
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| "NRC" means the Nuclear Regulatory Commission or any successor thereto.
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| "NRC Permits" means all certificates, permits, licenses, consents, approvals and other governmental authorizations issued by the NRC on the basis of which Seller is authorized by the NRC to own, possess, use and operate the Generating Plants and the Gas Turbines prior to Closing, including Facility Operating License Nos. DPR 5 and DPR 26, but not including any Environmental Permits.
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| "Nuclear Fuel" means all fuel assemblies in the Generating Plants' reactors as of Closing, any irradiated fuel assemblies that have been temporarily removed from the Generating Plants' reactors as of Closing (except any irradiated fuel assemblies that may have been removed from Indian Point Unit 1 for reprocessing prior to Closing), all unirradiated fuel assemblies awaiting insertion into the Generating Plants' reactors and all fuel constituents in any stage of the fuel cycle which are in process for use in the Generating Plants' reactors as of Closing.
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aj
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| 15 "Nuclear Insurance Policies" means all insurance policies carried by or for the benefit of Seller with respect to the Auctioned Assets, including all liability, property damage and business interruption policies in respect thereof. Without limiting the generality of the foregoing, the term "Nuclear Insurance Policies" includes all policies issued or administered by NEIL or ANI.
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| "NYPA" means the Power Authority of the State of New York or any successor thereto.
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| "NYSDEC" means the New York State Department of Environmental Conservation or any successor thereto.
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| "NYSERDA" means the New York State Energy Research Development Agency or any successor thereto.
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| "Off-Site" means any location except (i) the Buyer Real Estate (and all surface and subsurface elements thereof including soils, surface water and groundwater) and (ii) any location to or under which Hazardous Substances present or Released at or from the Auctioned Assets have migrated.
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| "Operating Records" shall have the meaning set forth in Section 2.02(a) (vi).
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| "Parties" and "Party" shall have the respective meanings set forth in the Preamble.
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| "Patents" means with respect to the patented items or processes relating primarily to, or used primarily in the operation of, the Generating Plants or the Gas Turbines, (i) a royalty-free license from Seller to use such patented items or processes owned by Seller or (ii) Seller's existing license (or any part thereof) or a separate license to the extent required to authorize Buyer's use of such patented items or processes owned by third parties, in each case, at or in connection with the Auctioned Assets in a manner consistent with Seller's use of such patented items or processes pursuant to the terms and conditions of Seller's license.
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| "Payment Amount" shall have the meaning set forth in Section 6.08.
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| "Payment Date" shall have the meaning set forth in Section 6.08(b).
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| [NYCorp;1173312.1:4738W: 11/14/00-11:45a]
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| 16 "PBGC" shall have the meaning set forth in Section 4.12.
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| "Permits" means all certificates, permits, licenses, consents, approvals and other governmental authorizations (other than Environmental Permits and NRC Permits) relating primarily to the Auctioned Assets, or the ownership, operation or use thereof.
| |
| "Permitted Exceptions" means (i) all exceptions, restrictions, easements, charges, rights-of-way and monetary and nonmonetary encumbrances which are set forth in any Permits, Environmental Permits or NRC Permits; (ii) all statutory liens for current Taxes or assessments not yet delinquent, subject to proration as provided herein; (iii) all mechanics', carriers',
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| workers', repairers' and other similar liens relating to obligations as to which Seller is not in default or the validity of which is being contested in good faith by appropriate proceedings, provided that Seller shall cause the Title Company to omit such liens from the title insurance policy described in Section 7.02; (iv) all zoning, building code, entitlement, conservation restriction and other land use and Environmental Laws by Governmental Authorities; (v) all matters set forth in Schedules B-2 to Certificates of Title Nos. 231-W-08707 and 231-W-10117 issued by First American Title Insurance Company of New York, Inc.,
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| both effective as of September 25, 2000 and last revised on October 26, 2000 and November 2, 2000, respectively, provided that the generic exception for "rights of tenants or persons in possession" shall be limited to the rights of tenants or other parties under leases or other agreements which constitute Contracts ;
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| (vi) all matters disclosed on the Conveyance Plans; (vii) all Encumbrances or other restrictions created pursuant to this Agreement or any Ancillary Agreement; (viii) all restrictions and regulations imposed by the ISO, any Governmental Authority or any local, state, regional, national or international reliability organization; and (ix) all Encumbrances on, imperfections in or failures of title which do not secure indebtedness for borrowed money and which would not, individually or in the aggregate, reasonably be expected to materially impair the continued use and operation of the Auctioned Assets as currently conducted. Notwithstanding the foregoing, Seller shall discharge or cause the Title Company to omit or insure over all liens which secure indebtedness for borrowed money, judgments against Seller and any other liquidated sums of money capable of precise LNYCorp;1173312.1: 4738W: ii/14/00-11:45a I
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| | |
| 17 determination. Nothing in this definition is intended to affect the obligations of the Parties with respect to Prorated Items.
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| "Person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization or Governmental Authority.
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| "Power Purchase Agreement" means the Power Purchase Agreement dated as of even date herewith between Seller and Buyer.
| |
| "PPMIS" means the Power Plant Maintenance Information System, which is an information resources system served by Seller's mainframe computer.
| |
| "Price-Anderson Act" means Section 170 of the Atomic Energy Act and related provisions of Section 11 of the Atomic Energy Act.
| |
| "Prorated Items" shall have the meaning set forth in Section 2.03(a) (x).
| |
| "Protective Relaying System" means the system relating to the Generating Facilities comprised of components collectively used to detect defective power system elements or other conditions of an abnormal nature, initiate appropriate control circuit action in response thereto and isolate the appropriate system elements in order to minimize damage to equipment and interruption to service.
| |
| "Prudent Utility Practices" means any of the practices, methods and acts engaged in or approved by a significant portion of the nuclear power generation industry during the relevant time period, or any of the practices, methods or acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with applicable Laws and good business practices, reliability, safety and expedition. Prudent Utility Practices are not intended to be limited to only the optimum practice, method or act to the exclusion of all others, but rather are intended to include practices, methods or acts generally accepted in the nuclear power generation industry.
| |
| "PSC" means the New York State Public Service Commission or any successor thereto.
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| (NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| | |
| 18 "PUHCA" shall have the meaning set forth in Section 4.03(b).
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| "Purchase Price" shall have the meaning set forth in Section 3.02(a).
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| "Qualified Decommissioning Fund" means the external trust fund that meets the requirements of Section 468A of the Code and Treas. Reg.
| |
| Section 1.468A-5, and which is maintained by Seller with respect to the Auctioned Assets prior to Closing pursuant to the applicable Decommissioning Indenture.
| |
| "Release" means (i) any "extraordinary nuclear occurrence" or "nuclear incident," as those terms are defined under the Atomic Energy Act, and (ii) any actual or threatened release, spill, emission, emptying, escape, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into the environment or within any building, structure, facility or fixture.
| |
| "Required Capital Expenditures Amount" means:
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| (i) if Closing occurs on or after January 1, 2001 but on or prior to March 31, 2001, an amount equal to the product of (A) $5,120,000 divided by 90 and (B) the number of days, up to a maximum of 90 days, between January 1, 2001 and the Closing Date; (ii) if Closing occurs on or after April 1, 2001 but on or prior to June 30, 2001, an amount equal to the sum of (i) $5,120,000 and (ii) the product of (A) $7,950,000 divided by 90 and (B) the number of days, up to a maximum of 90 days, between April 1, 2001 and the Closing Date; (iii) if Closing occurs on or after July 1, 2001 but on or prior to September 30, 2001, an amount equal to the sum of (i) $13,070,000 and (ii) the product of (A) $6,470,000 divided by 90 and (B) the number of days, up to a maximum of 90 days, between July 1, 2001 and the Closing Date; (iv) if Closing occurs on or after October 1, 2001 but on or prior to December 31, 2001, an amount equal to the sum of (i) $19,540,000 and (ii) the product of (A) $7,380,000
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| [NYCorp:1173312.1:4738W: 11/14/00-11: 45a]
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| | |
| 19 divided by 90 and (B) the number of days, up to a maximum of 90 days, between October 1, 2001 and the Closing Date; and (v) if Closing occurs on or after January 1, 2002, $26,920,000.
| |
| "Required Contracts" means those contracts, agreements and other legally binding arrangements set forth in Schedule 7.02(d)(i).
| |
| "Required Software" means, with respect to the software set forth in Schedule 7.02(d)(ii), Seller's existing license (or any part thereof) or a separate license, in each case, to the extent required to authorize Buyer's use of such software at or in connection with the Auctioned Assets in a manner consistent with Seller's use of such software pursuant to the terms and conditions of Seller's license.
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| "Restraints" shall have the meaning set forth in Section 7.01(b).
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| "Retained Assets" shall have the meaning set forth in Section 2.02(b).
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| "Retained Liabilities" shall have the meaning set forth in Section 2.03(b).
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| "Revenue Meters" means all meters measuring demand, energy and reactive components, and all pulse isolation relays, pulse conversion relays and associated totalizing and remote access pulse recorder equipment, in each case, required to measure the transfer of energy between the Parties.
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| "Revocable Consent" shall have the meaning set forth in Section 2.05(a).
| |
| "Safstor" means the procedure by which a generating facility is temporarily placed in a safe condition and maintained in that state until it is subsequently decontaminated and dismantled to levels that permit termination of the NRC operating licenses for such facility and release of such facility by the NRC in accordance with applicable NRC regulations.
| |
| "Seqregated Reimbursement Accounts" shall have the meaning set forth in Section 8.05(b).
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| {NYCorp;1173312.1:4738W:11/14/00-O11:45a
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| | |
| 20 "Seller" shall have the meaning set forth in the Preamble.
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| "Seller Assets" means any property, machinery, equipment, facilities or systems (including Seller Facilities but other than any Protective Relaying System or Substation Interface Cables) that are from time to time owned or leased by Seller or its Affiliates after Closing and are employed by Seller in connection with the performance of the activities contemplated by the Ancillary Agreements.
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| "Seller Facilities" shall mean the "Seller Facilities" under the Declaration of Easements Agreement.
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| "Seller Indemnitees" shall have the meaning set forth in Section 9.01(b).
| |
| "Seller Material Adverse Effect" means any change, effect, event, occurrence or state of facts that is materially adverse to the business, operations, assets, properties, condition (financial or otherwise), results of operations or prospects of Seller.
| |
| "Seller Real Estate" means all real property and leaseholds or other interests in real property of Seller (including the premises on which the Substation is located), other than Buyer Real Estate.
| |
| "Seller Required Regulatory Approvals" shall have the meaning set forth in Section 4.03(b).
| |
| "Seller's 4.12 Benefits" shall have the meaning set forth in Section 8.02(a).
| |
| "Seller's 401(k) Plans" shall have the meaning set forth in Section 8.04(a).
| |
| "Seller's Pension Plans" shall have the meaning set forth in Section 8.03(a).
| |
| "Seller's Reimbursement Account Plans" shall have the meaning set forth in Section 8.05(b).
| |
| "Seller's Severance Plan" shall have the meaning set forth in Section 8.08(a).
| |
| "Settlement Agreement" means that certain Settlement Agreement entered into on December 19, 1980, as amended, among Seller, Orange & Rockland Utilities, (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 21 Inc., Central Hudson Gas & Electric Corporation, Niagara Mohawk Power Corporation, NYPA, NYSDEC, the Attorney General of the State of New York, the United States Environmental Protection Agency, Hudson River Fisherman's Association (currently d/b/a the Hudson Riverkeeper Fund, Inc.), Scenic Hudson Preservation Conference (currently Scenic Hudson, Inc.) and the National Resources Defense Council, in connection with their disputes relating to the National Pollutant Discharge Elimination System permits issued to certain utilities in 1975, which, by its terms, has expired.
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| "Special Affected Employee" shall have the meaning set forth in Section 8.01(a).
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| "Spent Nuclear Fuel" means Nuclear Fuel that has been withdrawn or discharged from a nuclear reactor following irradiation and has not been chemically separated into its constituent elements by reproces sing. "Spent Nuclear Fuel" includes the special nuclear material, byproduct material, source material and other radioactive materials associated with nuclear fuel assemblies.
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| "Spent Nuclear Fuel Fees" means those fees assessed on electricity generated at the Generating Plants and sold, as provided in the Nuclear Waste Policy Act of 1982, as amended, and the rules and regulations promulgated thereunder.
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| "Substation" shall have the meaning set forth in Section 2.02(b) (i).
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| "Substation Interface Cables" means (i) control cables and associated conduits located in the Substation which connect the Generating Facilities with Buyer Assets located in the Substation and (ii) control and low voltage power cables and associated conduits located in the Substation which connect Seller Assets with Buyer Assets.
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| "Tax Basis" means the adjusted Tax basis determined for U.S. federal income Tax purposes under Section 1011(a) of the Code.
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| "Tax Benefit" means, with respect to any Indemnifiable Loss for any person, the positive excess, if any, of the Tax liability of such person without regard to such Indemnifiable Loss over the Tax liability of such person taking into account such 7 1
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| [NYCorp;1173312.1:4 38W:1 /14/00-11:45a]
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| 22 Indemnifiable Loss, with all other circumstances remaining unchanged.
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| "Tax Claim" shall have the meaning set forth in Section 9.03(a).
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| "Tax Contest" shall have the meaning set forth in Section 9.03(c).
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| "Tax Cost" means, with respect to any indemnity payment for any person, the positive excess, if any, of the Tax liability of such person taking such indemnity payment into account over the Tax liability of such person without regard to such payment, with all other circumstances remaining unchanged.
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| "Taxes" means all taxes, surtaxes, charges, fees, levies, penalties or other assessments imposed by any U.S. federal, state or local or foreign taxing authority, including income tax, excise, property, sales, transfer, franchise, special franchise, payroll, recording, withholding, social security or other taxes, or any liability for taxes incurred by reason of joining in the filing of any consolidated, combined or unitary Tax Returns, in each case, including any interest, penalties or additions attributable thereto.
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| "Tax Refund Suit" shall have the meaning set forth in Section 9.03(b).
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| "Tax Return" means any return, report, information return or other document (including any related or supporting information) required to be supplied to any authority with respect to Taxes.
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| "Termination Date" shall have the meaning set forth in Section 10.01(b).
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| "Third Party Claim" shall have the meaning set forth in Section 9.02(a).
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| "Title Company" means First American Title Insurance Company of New York, Inc. and Commonwealth Land Title Insurance Company on a 50/50 coinsurance basis or one or more other title insurance companies reasonably acceptable to Buyer and Seller.
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| "TNMS" means the Tag Numbering Management System, which is an information resources system served by Seller's mainframe computer.
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| SNYCorp;1173312.1:4738W: 11/14/00- 11:45aI
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| 23 "Toddville Conveyance Plan" means the ALTA/ACSM Land Title Survey prepared for Seller captioned "Toddville School Site Survey" (Sheet 1 of 1) completed on September 15, 2000 by Badey & Watson Surveying &
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| Engineering, PC, as may hereafter be amended by Seller in immaterial respects.
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| "Toddville Training Center" means the training facility owned by Seller and located at Three Locust Avenue in the Town of Cortlandt, New York.
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| "Transferable Permits" shall have the meaning set forth in Section 2.02(a) (v).
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| "Transmission System" shall have the meaning set forth in Section 2.02(b) (i).
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| "Trustee" means the trustee of the Decommissioning Funds appointed by Seller pursuant to the applicable Decommissioning Indenture.
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| "Union Transition Period" shall have the meaning set forth in Section 8.01(b).
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| "Undated Schedules" shall have the meaning set forth in Section 6.17.
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| "Westinahouse Contract" shall have the meaning set forth in Section 6.01(e).
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| SECTION 1.02. Accounting Terms. Any accounting terms used in this Agreement or the Ancillary Agreements shall, unless otherwise specifically provided, have the meanings customarily given them in accordance with United States generally accepted accounting principles ("GAAP") and all financial computations hereunder or thereunder shall, unless otherwise specifically provided, be computed in accordance with GAAP consistently applied.
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| ARTICLE II Purchase and Sale; Assumption of Certain Liabilities SECTION 2.01. Purchase and Sale. Upon the terms and subject to the satisfaction of the conditions contained in this Agreement, at Closing, Seller agrees to sell, assign, convey, transfer and deliver or cause to be sold, assigned, conveyed, transferred or delivered to Buyer, and Buyer agrees to purchase, assume and acquire from Seller all the Auctioned Assets.
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| 4 SNYCorp;1173312.1:4 738W:11/14/00-11: 5a]
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| 24 SECTION 2.02. Auctioned Assets and Retained Assets. (a) Auctioned Assets. The term "Auctioned Assets" means all the assets, real and personal property, goodwill and rights of Seller of whatever kind and nature, whether tangible or intangible, in each case, constituting, relating primarily to, or used primarily in the operation of, the Generating Plants or the Gas Turbines, other than the Retained Assets, including:
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| (i) (A) all land owned by Seller relating primarily to the operations of the Generating Plants shown on the Indian Point Conveyance Plan as "Buyer Parcel - Indian Point" and described in Schedule 2.02(a) (i) (A) together with all buildings and improvements erected thereon, (B) both (1) the leasehold interest in the land shown on the Indian Point Conveyance Plan as "Buyer Parcel - GT Site" and described in Schedule 2.02(a) (i) (B) (the "GT Site") to be created pursuant to the GT Site Ground Lease, and (2) all buildings and improvements erected on the GT Site, and (C) all land owned by Seller constituting, relating primarily to, or used primarily in the operation of the Toddville Training Center shown on the Toddville Conveyance Plan and described in Schedule 2.02(a) (i) (C) together with all buildings and improvements erected thereon, subject in each case to all Permitted Exceptions (the "Buyer Real Estate");
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| (ii) subject, in each case, to Permitted Exceptions, all inventories of fuels (relating primarily to, or used primarily in the operation of, the Generating Plants or the Gas Turbines) and Nuclear Fuel, in each case owned by Seller on the Closing Date, Spent Nuclear Fuel located on Buyer Real Estate on the Closing Date, and all Inventory, in each case other than assets that are used, consumed, replaced or disposed of in the ordinary course of business consistent with past practice or as permitted by this Agreement, together with all warranties from third parties, including manufacturers and vendors relating thereto, to the extent transferable; (iii) subject, in each case, to Permitted Exceptions, all machinery (mobile or otherwise),
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| equipment, facilities, furniture and other personal property relating primarily to, or used primarily in the operation of, the Generating Plants or the Gas Turbines or the Toddville Training Center, including the items of personal property listed in Schedule 2.02(a) (iii), together with all warranties from third parties, including manufacturers and vendors relating
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 25 thereto, to the extent transferable, other than assets that are used, consumed, replaced or disposed of in the ordinary course of business consistent with past practice or as permitted by this Agreement; (iv) subject to Sections 2.02(b) (x) and 2.04, all right, title and interest of Seller in, to and under all contracts, agreements, leases, licenses (whether Seller is lessor, lessee, licensor or licensee thereunder), commitments, and all other legally binding arrangements (A) set forth in Schedule 2.02(a) (iv),
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| (B) associated with emergency preparedness (including those relating to emergency sirens or radiation monitors), (C) between Seller and NYPA primarily related to the operation or maintenance of the Auctioned Assets, but excluding any such contracts, agreements, leases, licenses, or commitments pertaining to Seller's obligations relating to the Transmission System, the Substation or the supply of power or (D) entered into by Seller between the date of this Agreement and Closing in accordance with Section 6.01, in each case, to the extent they have not expired prior to Closing (the "Contracts");
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| (v) the Permits, Environmental Permits and NRC Permits that are transferred or transferable by Seller to Buyer by assignment or otherwise or which will pass to Buyer as successor in title to the Generating Plants or Gas Turbines (collectively, the "Transferable Permits"), including the Transferable Permits set forth in Schedule 2.02(a) (v);
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| (vi) (A) data, information, books, operating records, operating, safety, quality assurance and maintenance manuals, engineering design information and plans, blueprints and as-built plans, specifications, procedures, facility compliance plans, environmental procedures and other records of Seller relating primarily to the design, construction, licensing, regulation, operation or Decommissioning of the Auctioned Assets, whether existing in paper, magnetic or electronic form, including third party designs, drawings and specifications used in, or necessary for, the licensing, operation or Decommissioning of the Auctioned Assets (collectively, "Operating Records"),
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| (B) to the extent permitted or required by Law, all personnel files relating to Continued Employees, including files that pertain to (1) skill and development training and resumes, (2) seniority histories, (3) salary and benefit information, (4) active medical restriction forms, (5) records that
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 26 are required to be retained by Buyer pursuant to 10 C.F.R. Section 26 and (6) any other matters, but not including any performance evaluations, disciplinary records, fitness for duty reports or Occupational Safety and Health Act medical reports (other than such evaluations, records or reports necessary for Buyer to satisfy the requirements of NRC Law or any NRC permit)
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| (collectively, the "Continued Employee Records") and (C) all accounting and other records related to the Decommissioning Funds (other than general ledger accounting records) (collectively, the "Decommissioning Accounting Records"); provided, however, that Seller shall be permitted to retain copies to the extent it provides Buyer with copies or originals of same, of all Operating Records, Continued Employee Records and Decommissioning Accounting Records; (vii) subject to Sections 2.04 and 7.02(d), the Patents, all rights of Seller in and to the name "Indian Point 2 Nuclear Power Station" and any related or similar names and the right to use at, or in connection with, the Generating Plants or the Gas Turbines all other Intellectual Property relating primarily to, or used primarily in the operation of, the Generating Plants or the Gas Turbines; (viii) the assets of the Decommissioning Funds contemplated by Sections 6.07(a) and (b) to be transferred to Buyer; (ix) any credit or credits associated with assessments for the disposal of Low-level Radioactive Waste accumulated by Seller prior to Closing pursuant to the New York Public Authorities Law Section 1854-d.2, as amended, to the extent assignable to Buyer; (x) the Nitrogen Oxide Allowances set forth in Schedule 2.02(a) (x) that are allocated by NYSDEC to the Gas Turbines for the control periods in 2001 and 2002, but less any such Nitrogen Oxide Allowances (or portions thereof) that are used by Seller in connection with operating the Gas Turbines prior to Closing consistent with past practices and system reliability requirements of Seller (it being understood that, for purposes of this Agreement, one Nitrogen Oxide Allowance shall be deemed "used" for each ton of nitrogen oxide emitted from the Gas Turbines between May 1 of any year and September 30 of such year, inclusive);
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| (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 27 (xi) all claims or causes of action for the refund or return of any payments made or to be made (including any Spent Nuclear Fuel Fees paid or payable) pursuant to the DOE Standard Contract with regard to electricity generated at the Generating Plants and sold on or prior to Closing, but specifically excluding any claims or causes of action in respect of damages to property or economic loss related or pertaining to the Department of Energy's breach or default under the DOE Standard Contract accrued prior to Closing; (xii) to the extent transferable to Buyer, Seller's ANI primary nuclear liability policy (facility policy),
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| secondary financial protection and master nuclear worker liability policy (master worker policy), and all rights to premium refunds or premium returns (including shutdown credits and premium returns under the Industry Credit Rating Program) that relate to premiums paid by Buyer (including premiums which are Prorated Items, to the extent paid by Buyer) for periods after Closing pursuant to such policies; and (xiii) Seller's claims and rights against any third party arising out of or relating to any of the Assumed Obligations.
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| (b) Retained Assets. The term "Retained Assets" means:
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| (i) except (A) as set forth in Schedule 2.02(a) (iii) or (B) as located on Buyer Real Estate and not set forth in Schedule 2.02(b) (i), all Interconnection Facilities and transmission and distribution assets owned, controlled or operated by Seller for purposes of providing transmission service (including point-to-point transmission service),
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| network integration service and distribution service and other related purposes, including the real property and substation machinery, equipment and facilities located at the Buchanan Substation (the "Substation")
| |
| used in controlling continuity between the Generating Plants and Gas Turbines and the transmission and distribution facilities and for other purposes (the "Transmission System");
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| (ii) (A) all Revenue Meters installed by Seller; (B) all Communications Equipment and related support equipment (1) located on Buyer Real Estate or temporarily removed from Buyer Real Estate for repairs, servicing or maintenance and listed in Schedule 2.02(b) (ii) (B) or acquired by Seller after the date of
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| [NYCorp;1173312.1:4738W:11/14/00-ll:45a]
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| 28 this Agreement and designated by Seller as a Retained Asset or (2) located on Seller Real Estate or temporarily removed from Seller Real Estate for repairs, servicing or maintenance; and (C) all Protective Relaying Systems not located on Buyer Real Estate; (iii) except as set forth in Section 2.02(a) (viii),
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| all cash, cash equivalents, bank deposits and accounts receivable held or owned by Seller (including Seller's account balances with NEIL);
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| (iv) (A) all mainframe computers of Seller and (B) all Intellectual Property relating primarily to any other Retained Assets or any Retained Liabilities; (v) the names "Consolidated Edison", "Con Edison",
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| "Con Ed", "Consolidated Edison Company", "Consolidated Edison Company of New York, Inc.", "Consolidated Edison, Inc.", "New York Edison", "Brooklyn Edison",
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| "Staten Island Edison" and "Edison" and any related or similar trade names, trademarks, service marks or logos (and any rights to and in the same, including any right to use the same);
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| (vi) subject to Section 6.06(c), any refund or credit related to Taxes or sewer rents or water charges or any other liabilities or obligations in respect of the Auctioned Assets, in each case, attributable to periods (or portions thereof) prior to Closing; (vii) except as set forth in Section 2.02(a) (xii),
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| (A) all insurance policies of Seller related to the Auctioned Assets, including all Nuclear Insurance Policies, and (B) all rights to distributions, credits (including shutdown credits), premium refunds or premium returns (including shutdown credits and premium returns under the Industry Credit Rating Program) under all insurance policies, including all such rights to (i) Seller's member insurance accounts, policyholder insurance records and policyholder percentages under its Nuclear Insurance Policies and (ii) Seller's future distributions, credits, premium refunds or premium returns from its Nuclear Insurance Policies; (viii) all claims or causes of action for refunds of Department of Energy Decontamination and Decommissioning Fees, in each case, paid by Seller as contemplated by Section 2.03(b) (iv);
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| (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 29 (ix) all personnel records (other than Continued Employee Records) and all other records (other than Operating Records and Decommissioning Accounting Records);
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| (x) all claims or causes of action in respect of damages to property or economic loss related or pertaining to the Department of Energy's breach or default under the DOE Standard Contract accrued prior to Closing, but specifically excluding any claims or causes of action for the refund or return of any payments made or to be made (including any Spent Nuclear Fuel Fees paid or payable) pursuant to the DOE Standard Contract with regard to electricity generated at the Generating Plants and sold on or prior to Closing; (xi) all emission reduction credits, sulfur dioxide allowances and Nitrogen Oxide Allowances that relate to the Retained Assets or any other of Seller's assets that are not Auctioned Assets (excluding, for clarification, any Nitrogen Oxide Allowances allocated by NYSDEC to the Gas Turbines for periods after Closing), and, except as set forth in Schedule 2.02(a) (x) and except as set forth in Section 2.02(a) (ix), all other environmental related allowances and credits of any nature held or possessed by Seller; and (xii) any other asset that is not described in this Agreement as an Auctioned Asset.
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| SECTION 2.03. Assumed Obligations and Retained Liabilities. (a) Assumed Obligations. At Closing, Buyer shall assume, and after Closing, shall discharge, all of the following liabilities and obligations, direct or indirect, known or unknown, absolute or contingent, which relate to the Auctioned Assets or are otherwise specified below (collectively, the "Assumed Obligations"):
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| (i) except as set forth in Section 2.03(b) (ii),
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| any liabilities and obligations under the Contracts, except, in each case, to the extent such liabilities and obligations, but for a breach or default by Seller prior to Closing, would have been paid, performed or otherwise discharged on or prior to Closing, or to the extent the same arise out of any such breach or default; (ii) any liabilities and obligations for goods delivered or services rendered, in the ordinary course 4 5 INYCorp;1173312.1:4738W:11/14/00-11: aI
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| 30 of business, after Closing to, or for-the benefit of, Buyer or the Auctioned Assets; provided, however, that Buyer shall not be obligated to assume any liabilities and obligations for any such goods and services to the extent the same are included in the determination of the adjustment of the Purchase Price pursuant to Sections 3.02(c) (i), (ii) and (v);
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| (iii) except as set forth in Sections 2.03(b)(iii),
| |
| 2.03(b) (v) and 2.03(b) (vi), any Environmental Liability, whether arising, accruing or occurring prior to, on, or after Closing; (iv) any liabilities and obligations in respect of amounts owing under the DOE Standard Contract, including any Spent Nuclear Fuel Fees, and any other fees and expenses, in each case, associated with electricity generated at the Generating Facilities and sold after the Closing Date; (v) any liabilities and obligations (including any Environmental Liabilities) in respect of (A)
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| Decommissioning following permanent cessation of operations or otherwise, (B) the management, storage, removal, transportation and disposal of Spent Nuclear Fuel located in, on or at the Generating Facilities after Closing, and (C) any other disposition of the Auctioned Assets after Closing; (vi) (A) any liabilities and obligations for any ANI or Price-Anderson Act secondary financial protection retrospective premium obligations in connection with the ANI or Price-Anderson Act policies and financial assurance or protection applicable to any of the Generating Facilities for (i) any nuclear worker liability attributable to employment by Seller on or prior to Closing or (ii) for any third party nuclear liability arising out of any incident or occurrence on or prior to Closing (it being agreed that if Seller is unable to cause the assignment of all or any part of such retrospective premium obligations, Seller shall remain primarily liable for such obligations and Buyer shall indemnify Seller therefor pursuant to Section 9.01(b)) and (B) any liabilities and obligations of Seller for retrospective premium obligations arising on or after Closing under Seller's NEIL insurance policies applicable to any of the Generating Facilities; (vii) except as set forth in Section 2.03(b) (v), any liabilities and obligations with respect to the Permits (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 31 and the NRC Permits to the extent arising from events occurring after Closing; (viii) (A) all wages, overtime, employment Taxes, severance pay, transition payments, workers compensation benefits, sick pay, health care continuation coverage obligations under COBRA, occupational safety and health liabilities or other similar liabilities and obligations in respect of Continued Employees to the extent arising from events occurring after Closing, and (B) all other liabilities and obligations with respect to the Continued Employees for which Buyer is responsible pursuant to Article VIII; (ix) except for Environmental Liabilities the allocation of which is governed by other provisions of Section 2.03(a) and by Section 2.03(b), any liabilities and obligations in respect of (A) any claims or causes of action by any person in respect of damages to property, personal injury, death or economic loss relating to, resulting from or arising out of the Auctioned Assets, or (B) any claims or causes of action by any Continued Employees in respect of discrimina tion, retaliation, wrongful discharge, unfair labor practice or other employment-related matter, in the case of each of the foregoing clauses (A) and (B), to the extent arising from events occurring after Closing; (x) any liabilities and obligations, with respect to the periods that include the Closing Date, with respect to real or personal property rent, Taxes based on the ownership or use of property, utilities charges and similar charges, in each case, relating primarily to the operations of the Generating Plants or the Gas Turbines or the Toddville Training Center, and salaries, wages and other costs and expenses in respect of Continued Employees (collectively, the "Prorated Items"), to the extent such Prorated Items relate to the period after Closing, including (A) personal property Taxes, real estate and occupancy Taxes, assessments and other charges, (B) rent and all other items payable by Seller under any Contract, (C) any fees with respect to any Transferable Permit, (D) sewer rents and charges for water, telephone, electricity and other utilities and (E) insurance premiums for the insurance described in Section 2.02(a) (xii), in each case, calculated by multiplying the amount of any such Prorated Item by a fraction the numerator of which is the number of days (or portions thereof) in such period
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 32 after Closing and the denominator of which is the number of days in such period; (xi) any liabilities and obligations in respect of Taxes (other than Prorated Items) attributable to the Auctioned Assets related to Taxable periods (or portions thereof) beginning after Closing; (xii) except for Environmental Liabilities the allocation of which is governed by other provisions of Section 2.03(a) and by Section 2.03(b), any liabilities and obligations arising after Closing in respect of damage to property, personal injury, death or economic loss relating to, resulting from or arising out of any Protective Relaying System or Substation Interface Cables owned, maintained or controlled by Seller, regardless of whether such liabilities or obligations are caused by a Seller Indemnitee or a Buyer Indemnitee (except where caused by the gross negligence or wilful misconduct of a Seller Indemnitee);
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| (xiii) any other liabilities and obligations expressly allocated to Buyer or ENO in this Agreement or in any Ancillary Agreement; and (xiv) except as otherwise expressly set forth in this Agreement or any Ancillary Agreement, any other liabilities and obligations to the extent arising from or relating primarily to the use, ownership, lease, operation, maintenance or control of the Auctioned Assets after Closing.
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| (b) Retained Liabilities. The term "Retained Liabilities" means the following liabilities and obligations, direct or indirect, known or unknown, absolute or contingent, which relate to the Retained Assets or are otherwise specified below:
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| (i) any liabilities and obligations of Seller to the extent arising from any Retained Assets (other than as contemplated by Section 2.03(a) (xii));
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| (ii) any liabilities and obligations of Seller, including under Contracts, for goods delivered or services rendered prior to Closing; (iii) (A) any liabilities and obligations of Seller under or related to any Environmental Law to the extent arising as a result of or in connection with the Off-Site remediation, transportation, storage, Release, handling or recycling of, or arrangement for such
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 33 activities with respect to, Hazardous Substances prior to Closing, in connection with the ownership or operation of the Auctioned Assets or (B) any liabilities and obligations of Seller for any loss of life or injury to persons or property to the extent arising from any Release of Hazardous Substances to the environment from the leak that occurred on February 15, 2000 on No. 24 steam generator at Indian Point Unit 2, but only to the extent that any such liabilities or obligations are in excess of the proceeds or benefits recovered or recoverable by or paid or available to Buyer under any insurance policies, including those transferred to Buyer pursuant to Section 2.02(a) (xii),
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| or pursuant to the Price-Anderson Act; (iv) any liabilities and obligations of Seller in respect of (A) amounts owing under the DOE Standard Contract, including any Spent Nuclear Fuel Fees associated with electricity generated at the Generating Facilities and sold prior to Closing and (B) any Department of Energy Decontamination and Decommissioning Fees accrued for periods prior to Closing under 42 U.S.C.A. § 2297g-1; (v) any monetary fines (excluding (A) natural resource damages, (B) cleanup or remediation costs and (C) other costs of a similar nature) imposed by a Governmental Authority to the extent resulting from an investigation, proceeding or inspection before or by a Governmental Authority relating to actions or omissions or alleged actions or omissions of Seller prior to Closing; (vi) any liabilities and obligations of Seller for any loss of life or injury to persons or property to the extent arising from exposure to asbestos or.
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| asbestos-containing materials at the Auctioned Assets prior to Closing; (vii) (A) all wages, overtime, employment Taxes, severance pay, transition payments, workers compensation benefits, sick pay, health care continuation coverage obligations under COBRA, occupational safety and health liabilities or other similar liabilities and obligations in respect of Affected Employees to the extent arising from events occurring prior to Closing and (B) all other liabilities and obligations with respect to the Affected Employees for which Seller is responsible pursuant to Article VIII;
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| [NYCorp;2173312.1:4738W: 11/14/00-11: 45a]
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| 34 (viii) except for Environmental Liabilities the allocation of which is governed by other provisions of Section 2.03(a) and by Section 2.03(b) and except for any liabilities and obligations to which Section 2.03(a) (xii) applies, any liabilities and obligations in respect of (A) any claims or causes of action by any person in respect of damages to property, personal injury, death or economic loss relating to, resulting from or arising out of the Auctioned Assets, or (B) any claims or causes of action by any Affected Employees in respect of discrimination, retaliation, wrongful discharge, unfair labor practice or other employment-related matter, in the case of each of the foregoing clauses (A) and (B), to the extent arising from acts or omissions of Seller prior to Closing; (ix) any liabilities and obligations, with respect to the period prior to Closing, for the Prorated Items, calculated as set forth in Section 2.03(a) (x);
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| (x) any liabilities and obligations in respect of Taxes (other than Prorated Items) attributable to the Auctioned Assets related to Taxable periods (or portions thereof) ending before Closing, including Income Taxes attributable to income realized by Seller pursuant to the transactions contemplated by this Agreement; (xi) any liabilities and obligations arising after the date of this Agreement in respect of which Seller has provided pursuant to Section 6.01(d) (ii) that such liabilities and obligations shall not be assumed or retained by Buyer; (xii) any other liabilities and obligations expressly allocated to Seller in this Agreement or in any Ancillary Agreement; (xiii) any mortgages, pledges, liens, security interests and conditional and installment sale agreements, in each case to the extent in existence prior to Closing and other than any Permitted Exceptions; and (xiv) except as otherwise expressly set forth in this Agreement or any Ancillary Agreement, any other liabilities and obligations to the extent arising from or relating primarily to the use, ownership, lease, operation, maintenance or control of the Auctioned Assets prior to Closing.
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| 35 SECTION 2.04. Third Party Consents. Seller and Buyer agree that if any consent to an assignment of any Contract, warranty or Patent shall not be obtained or if any attempted assignment would in Seller's reasonable opinion be ineffective or would impair any material rights and obligations of Buyer under such Contract, warranty or Patent, as applicable, so that Buyer would not acquire the benefit of all such rights and obligations, Seller, to the maximum extent permitted by Law and such Contract, warranty or Patent, as applicable, shall after Closing appoint Buyer to be Seller's representative and agent with respect to such Contract, warranty or Patent, as applicable, and Seller shall, to the maximum extent permitted by Law and such Contract, warranty or Patent, as applicable, enter into such reasonable arrangements with Buyer as are necessary to provide Buyer with the benefits and obligations of such Contract, warranty or Patent, as applicable; provided, however, that Seller shall have the option to terminate any such Contract in accordance with Section 6.04(g) or any Patent that constitutes a license authorizing Seller's use of patented items or processes owned by third parties.
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| Seller shall use its reasonable best efforts after Closing to obtain an assignment of each such Contract, warranty or Patent, as applicable, to Buyer and Buyer shall cooperate in good faith in connection with Seller's efforts. The exercise by Buyer and Seller of the terms of this Section 2.04 prior to Closing shall in no event constitute a waiver of the conditions to Closing set forth in Section 7.02(d).
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| SECTION 2.05. Franchise Property. (a) Not withstanding Section 2.02(a) (i), (ii) and (iii), to the extent it would be unlawful for Buyer to operate, use or maintain any of the property listed in Schedule 2.05(a)
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| (collectively, the "Franchise Property") without Buyer obtaining from the appropriate Governmental Authority a revocable consent, franchise agreement or other arrangement permitting Buyer to hold title to the Franchise Property (a "Revocable Consent"), (i) Buyer shall use its reasonable best efforts to cause a Revocable Consent to be entered into prior to Closing, including filing a petition or petitions with the appropriate Governmental Authority in respect of such Revocable Consent, and Seller shall cooperate in good faith in connection therewith, (ii) if such Revocable Consent has not been obtained by Buyer prior to Closing (A) title to the Franchise Property shall be deemed not to be transferred at Closing, (B) Seller shall, after Closing, appoint Buyer to be Seller's representative with respect to the Franchise Property, (C) Seller shall operate, use and maintain the Franchise Property at Buyer's expense and Buyer shall pay all real and personal property taxes applicable 4 5 INYCorp;1173312.1:4738W:11/14/00-11: a2
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| 36 thereto and (D) Buyer shall use its reasonable best efforts after Closing to cause such Revocable Consent to be entered into, at which time title to the Franchise Property shall be deemed transferred from Seller to Buyer pursuant to this Agreement, and Seller shall cooperate in good faith in connection therewith and (iii) Buyer shall pay all fees, charges and other expenses in connection with such Revocable Consent.
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| (b) For purposes of (i) the Ancillary Agreements and Sections 2.03, 9.01 and 9.02 of this Agreement, the terms "Auctioned Assets" and "Buyer Facilities" shall in any event each be deemed to include the Franchise Property and (ii) the Franchise Property shall in any event be deemed to be owned by Buyer.
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| ARTICLE III Closing SECTION 3.01. Time and Place of Closing. Upon the terms and subject to the satisfaction of the conditions contained in Article VII, the closing of the sale of the Auctioned Assets contemplated by this Agreement (the "Closing") will take place on such date as the Parties may agree, which date shall be as soon as practicable, but no later than ten Business Days, following the date on which all of the conditions set forth in Article VII have been satisfied or waived by the Party or Parties for whose benefit such conditions exist, at the offices of Cravath, Swaine & Moore in New York City or at such other place or time as the Parties may agree. The date at which Closing actually occurs is hereinafter referred to as the "Closing Date" and Closing shall be effective for all purposes herein as of 12:00 noon New York City time (or such other time as the parties may agree) on such date.
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| SECTION 3.02. Purchase Price. (a) The purchase price for the Auctioned Assets shall be $502,000,000, as adjusted pursuant to Sections 3.02(c) below (as adjusted, the "Purchase Price").
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| (b) At Closing, Buyer will pay or cause to be paid to Seller by wire transfer of immediately available funds to an account previously designated in writing by Seller an amount in United States dollars equal to the Purchase Price, adjusted in accordance with and as contemplated by Section 3.02(d) for amounts not in dispute (as adjusted, the "Non-Disputed Amount").
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 37 (c) The Purchase Price shall be adjusted as follows:
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| (i) the Purchase Price shall be increased by the book value, as reflected on the books of Seller as of Closing, of all fuel (including Nuclear Fuel) inventory included in the Auctioned Assets; (ii) the Purchase Price shall be adjusted by the amount of the Prorated Items, to the extent such Prorated Items can be reasonably determined at such time; (iii) the Purchase Price shall be increased by the amount, if any, by which the Fair Market Value of the assets of the Qualified Decommissioning Fund transferred to Buyer pursuant to Section 6.07(a) is greater than $430,000,000; (iv) if Seller fails to spend the Required Capital Expenditures Amount in connection with the capital projects set forth on Schedule 3.02(c) (iv), then the Purchase Price shall be decreased by an amount equal to the difference between (A) the Required Capital Expenditures Amount and (B) the aggregate amount of capital expenditures made by Seller on or after January 1, 2001 through the earlier of December 31, 2001 and the Closing Date in connection with the capital projects set forth on Schedule 3.02(c) (iv);
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| (v) the Purchase Price shall be (A) increased by the amount that the book value of all Inventories (determined in accordance with GAAP) as of Closing is greater than $37,590,000, and (B) decreased by the amount that the book value of such Inventories (determined in accordance with GAAP) as of Closing is less than $34,010,000; (vi) if the work specified in Schedule 3.02(c) (vi) has not been completed and paid for by Seller prior to Closing, then the Purchase Price shall be decreased by an amount equal to (A) $207,000 minus (B) the aggregate amount paid by Seller as of Closing in connection with the work specified in Schedule 3.02(c) (vi);
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| (vii) if the reasonably estimated cost as of Closing to dispose of Low-level Radioactive Waste (other than as provided on Schedule 3.02(c) (vii)) that is stored on-site at the Buyer Real Estate as of Closing for the purpose of off-site disposal exceeds $310,000, then the Purchase Price shall be decreased by $1.00 for every
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 38 dollar that such reasonably estimated cost of such disposal exceeds $310,000; provided, however, that the calculation of such reasonably estimated costs of such disposal shall be determined by reference to applicable industry practices and prices prevailing as of Closing; and (viii) if Buyer elects prior to Closing to purchase insurance to cover, among other things, the off-site migration or Release of Hazardous Substances from the Auctioned Assets, then the Purchase Price shall be decreased by the lesser of the cost of the premium for such insurance or $200,000; provided, that nothing in this Section 3.02(c) (viii) is intended to modify or alter the Parties' retention or assumption of liabilities and obligations, as the case may be, under Section 2.03.
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| (d) At least 20 Business Days prior to the Closing Date, Seller shall prepare and deliver to Buyer an estimated closing statement (the "Estimated Closing Statement") that shall set forth Seller's good faith estimate of the adjustments required by Section 3.02(c) (the "Estimated Adjustment Amount") as of Closing. Within 10 Business Days following the delivery of the Estimated Closing Statement by Seller to Buyer, Buyer may object in good faith to the Estimated Adjustment Amount in writing.
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| If Buyer so objects to the Estimated Adjustment Amount, the Parties shall attempt to resolve such dispute through good faith negotiation. If the Parties are unable to resolve such dispute before five Business Days prior to the Closing Date (or if Buyer fails to object to the Estimated Adjustment Amount by the date specified) the Purchase Price shall be adjusted for purposes of Closing by, as applicable, the amount of the Estimated Adjustment Amount not disputed in good faith by Buyer or by the Estimated Adjustment Amount (if the Buyer fails to object to the Estimated Adjustment Amount by the date specified), and the amount, if any, in good faith dispute shall be reserved for resolution in accordance with Section 3.03 below.
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| SECTION 3.03. Post-Closing Adjustment.
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| (a) Within 20 Business Days after Closing, Seller shall prepare and deliver to Buyer a statement (an "Adjustment Statement") which reflects the calculation of the Purchase Price taking into account the adjustments required by Section 3.02(c) as of Closing (the "Adjustment Amount"),
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| and, upon request of Buyer, related accounting material used by Seller to prepare the Adjustment Statement. The Adjustment Statement shall be prepared using GAAP and the fuel adjustment set forth in Section 3.02(c) (i) with respect
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| [NYCorp;1173312.1:4738W: 11/14/00 -11: 45a]
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| 39 to Nuclear Fuel shall be prepared using the same unit cost methodology that Seller has historically used to calculate the book value of its Nuclear Fuel as set forth in Schedule 3.03(a). Buyer agrees to cooperate with Seller in connection with the preparation of the Adjustment Statement and related information, and shall provide to Seller such access, books, records and information as may be reasonably requested from time to time.
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| (b) Buyer may in good faith dispute the Adjustment Statement, by notifying Seller in writing of the disputed amount, and the basis of such dispute, within 20 Business Days of Buyer's receipt of the Adjustment Statement. Buyer shall have no right to dispute the unit cost methodology (as set forth in Schedule 3.03(a)) used to calculate the book value of the Nuclear Fuel inventory or the appropriateness, under GAAP or otherwise, of using such methodology. In the event of a dispute, Buyer and Seller shall attempt to reconcile their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive on the Parties. If Buyer and Seller are unable to reach a resolution of such differences within 20 Business Days of receipt of Buyer's written notice of dispute to Seller, Buyer and Seller shall submit the amounts remaining in dispute for determination and resolution to an independent accounting firm of recognized national standing reasonably acceptable to Seller and Buyer (the "Accountants"), which shall be instructed to determine and report to the Parties, within 20 Business-Days after such submission, upon such remaining disputed amounts, and such report shall be final, binding and conclusive on the Parties with respect to the amounts disputed in respect of the Adjustment Amount. The fees and disbursements of the Accountants in connection with the resolution of such disputed amounts shall be borne by the Party whose position generally did not prevail, or if the Accountants determine that neither Party could be fairly found to be the prevailing party, then such fees and disbursements shall be borne equally by Buyer and Seller.
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| (c) If the Adjustment Amount is greater or less than the Non-Disputed Amount, then on the Adjustment Date (as defined below), (A) to the extent that the Adjustment Amount exceeds the Non-Disputed Amount, Buyer shall pay to Seller the amount of such excess and (B) to the extent that the Adjustment Amount is less than the Non-Disputed Amount, Seller shall pay to Buyer the amount of such deficiency.
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| "Adjustment Date" means (1) to the extent that Buyer does not dispute the Adjustment Statement pursuant to Section 3.03(b), the twenty-third Business Day following
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 40 Buyer's receipt of the Adjustment Statement or (2) to the extent that Buyer disputes the Adjustment Statement pursuant to Section 3.03(b), the third Business Day following either the resolution of such dispute by the Parties or a final determination by the Accountants in accordance with Section 3.03(b). Any amount paid under this Section 3.03(c) shall be paid with interest for the period commencing on the Closing Date through the date of payment, calculated at the prime rate of the Chase Manhattan Bank in effect on the Closing Date, and in cash by wire transfer of immediately available funds.
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| SECTION 3.04. Allocation of Consideration. Buyer and Seller shall use their good faith efforts to agree on an allocation (the "Allocation") among the Auctioned Assets of the consideration paid for Nuclear Fuel, the Assumed Liabilities and such other consideration paid by Buyer pursuant to this Agreement consistent with Section 1060 of the Code and the treasury regulations thereunder and private letter rulings issued by the IRS within 120 days of the date of this Agreement (or such later date as the Parties may mutually agree) but in no event fewer than 30 days prior to Closing. Buyer and Seller may obtain the services of an independent engineer or appraiser ("Independent Appraiser")
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| to assist in determining the fair market value of the Auctioned Assets and such other consideration paid by Buyer solely for purposes of the Allocation under this Section 3.04. If such an appraisal is made, Buyer and Seller shall accept such Independent Appraiser's determination of fair market value of the Auctioned Assets and such other consideration paid by Buyer. The cost of such appraisal shall be borne equally by Buyer and Seller. To the extent such filings are required, Buyer and Seller shall file IRS Form 8594 and all federal, state, local and foreign Tax Returns in accordance with such agreed Allocation. Except to the extent required to comply with audit determinations by any authority with jurisdiction over a Party, Buyer and Seller shall report the transactions contemplated by this Agreement and the Ancillary Agreements for all required federal Income Tax and all other Tax purposes in a manner consistent with the Allocation determined pursuant to this Section 3.04. Buyer and Seller shall provide the other promptly with any other information required to complete Form 8594. Buyer and Seller shall provide the other with reasonable assistance in the event of an examination, audit or other proceeding regarding the agreed Allocation.
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 41 ARTICLE IV Representations and Warranties of Seller Seller represents and warrants to Buyer as follows:
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| SECTION 4.01. Organization; Qualification.
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| Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of New York and has all requisite corporate power and authority to own, lease and operate the Auctioned Assets and to carry on the business of the Auctioned Assets as currently conducted.
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| SECTION 4.02. Authority Relative to This Agreement. Seller has all necessary corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller of this Agreement and the Ancillary Agreements and the consummation by Seller of the transactions contemplated hereby and thereby have been duly and validly authorized by the Board of Trustees of Seller or by a committee thereof to whom such authority has been duly delegated and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or the Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby. This Agreement and the Ancillary Agreements have been duly and validly executed and delivered by Seller and, assuming that this Agreement and the Ancillary Agreements constitute valid and binding agreements of Buyer and each other party thereto (other than Seller), this Agreement and the Ancillary Agreements constitute valid and binding agreements of Seller, enforceable against Seller in accordance with their respective terms.
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| SECTION 4.03. Consents and Approvals; No Violation. (a) Subject to obtaining the Seller Required Regulatory Approvals and the Buyer Required Regulatory Approvals, neither the execution and delivery of this Agreement or the Ancillary Agreements by Seller nor the consummation of the transactions contemplated thereby, including the sale by Seller of the Auctioned Assets pursuant to this Agreement, will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of Seller, (ii) except for Contracts requiring consent for assignment set forth in Schedule 4.03(a), result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other tNYCorp;1173312-.:4738W:11/14/00-11:45a]
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| 42 instrument or obligation to which Seller is a party or by which Seller, or any of the Auctioned Assets, may be bound or (iii) violate any Law applicable to Seller, or the Auctioned Assets, except in the case of clauses (ii) and (iii) for such failures to obtain a necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (b) Except for (i) application by Seller to, and the approval of, the PSC, pursuant to Section 70 of the Public Service Law of the State of New York, of the transfer to Buyer of the Auctioned Assets, (ii) the filings by Seller and Buyer required by the HSR Act and the expiration or earlier termination of all waiting periods under the HSR Act, (iii) application by Seller to, and the approval of, FERC under (A) Section 203 of the Federal Power Act of 1935 (the "Federal Power Act") with respect to the transfer of Auctioned Assets constituting jurisdictional assets under the Federal Power Act and (B) Section 205 of the Federal Power Act with respect to the Continuing Site Agreement and the Power Purchase Agreement, (iv) application by Seller to, and the approval of, the NRC for the transfer of the NRC licenses for the Generating Plant under the Atomic Energy Act, (v) application by Seller to, and the approval of, the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935 ("PUHCA"), of the transfer to Buyer of the Auctioned Assets, unless (A) FERC. has determined that Buyer is an exempt wholesale generator or if Buyer's application for exempt wholesale generator status is deemed granted by operation of law pursuant to Section 32 of PUHCA or (B) Seller, in its sole discretion, elects to accept that Buyer is deemed to be such an exempt wholesale generator by virtue of Buyer applying in good faith to FERC for a determination that Buyer is such an exempt wholesale generator, (vi) application to, and determination by the PSC and such state Governmental Authorities as may be required under PUHCA that, for purposes of Section 32(c) of PUHCA, allowing the Auctioned Assets to be "an eligible facility" will benefit consumers, is in the public interest and does not violate state law, and (vii) other declarations, filings or registrations with, or notices to, or authorizations, consents or approvals of, any Governmental Authority which become applicable to Seller or the transactions contemplated hereby or by the Ancillary Agreements as a result of the specific regulatory status or jurisdiction of incorporation or organization of Buyer (or any of its Affiliates) or as a result of any other facts that specifically relate to the business or activities in which Buyer (or any of its Affiliates) is or proposes to be engaged (collectively, the "Seller Required Regulatory Approvals"), no declaration,
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 43 filing or registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary for the consummation by Seller of the transactions contemplated hereby or by the Ancillary Agreements, other than (A) such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not obtained or made, would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect, (B) any certificate of occupancy, consent or similar approval to authorize the change in occupancy of the*Buyer Real Estate contemplated by this Agreement and required pursuant to the Code of the Village of Buchanan, including specifically Section 211.49 thereof and (C) any consent of the Commissioner of General Services of the State of New York required for the assignment from Seller to Buyer of the right to install and maintain a fish return pipeline in an area in the Hudson River approximately 30 feet wide and 330 feet long.
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| (c) To the knowledge of Seller, there is no reason that it should fail to obtain the Seller Required Regulatory Approvals.
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| SECTION 4.04. Personal Property. (a) Except for Permitted Exceptions, Seller has good and marketable title, free and clear of all Encumbrances, to all personal property included in the Auctioned Assets.
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| (b) Except as set forth in Schedule 4.04(b), to the knowledge of Seller, the Generating Plants conform in all material respects, to the extent required, to the (i)
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| Technical Specifications included in the NRC Permits for Indian Point Unit 1 and Indian Point Unit 2 in accordance with the requirements of 10 C.F.R. Section 50.36 and (ii) the Updated Final Safety Analysis Report required to be maintained for Indian Point Unit 1 and Indian Point Unit 2 in accordance with the requirements of 10 C.F.R. Section 50.71(e).
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| SECTION 4.05. Real Estate. The Conveyance Plans indicate the location of the Buyer Real Estate. Copies of the Conveyance Plans and Certificates of Title Nos. 231-W 08707 and 231-W-10117 prepared by First American Title Insurance Company of New York, Inc., the most recent certificates of title in the possession of Seller with respect to the Buyer Real Estate or any portion thereof, have heretofore been delivered by Seller to Buyer or made available for inspection by Buyer, receipt of which is hereby acknowledged by Buyer.
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| INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 44 SECTION 4.06. Leases. As of the date of this Agreement, Seller is neither a tenant nor a lessee under any real property leases which (a) are to be transferred and assigned to Buyer on the Closing Date and (b) (i) provide for annual payments of more than $100,000 or (ii) are material to the Auctioned Assets, except, in each case, as set forth in Schedule 4.06.
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| SECTION 4.07. Contracts. (a) Except for (i) any Contract listed in Schedule 2.02(a) (iv), (ii) contracts which will expire prior to Closing or that are permitted to be entered into under this Agreement, (iii) contracts associated with emergency preparedness (including those relating to emergency sirens or radiation monitors),
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| (iv) contracts with NYPA and (v) contracts listed in Schedule 4.07(a), Seller is not a party to any contract which is material to the business operations of the Auctioned Assets.
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| (b) Each Contract (i) constitutes a valid and binding obligation of Seller, and, to the knowledge of Seller, constitutes a valid and binding obligation of the other parties thereto, (ii) is in full force and effect and (iii) except for Contracts listed in Schedule 4.03(a), may be transferred to Buyer pursuant to this Agreement and will continue in full force and effect thereafter, in each case, without breaching the terms thereof or resulting in the forfeiture or impairment of any rights thereunder, except for such breaches, forfeitures or impairments which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (c) There is not, under any of the Contracts, any default or event which, with notice or lapse of time or both, would constitute a default by Seller, except for such events of default and other events as to which requisite waivers or consents have been obtained or which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (d) There are no suits or arbitration proceedings involving Seller pending or, to the knowledge of Seller, threatened relating to any Required Contract which would, individually or in the aggregate, be reasonably expected to have a material adverse effect on such Required Contract and which is not reasonably likely to be cured by Seller prior to Closing.
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| SECTION 4.08. Legal Proceedings. Except as set forth in Schedule 4.08, there are no claims, causes of action, proceedings or investigations pending or, to the
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 45 knowledge of Seller, threatened against or relating to Seller which would, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| With respect to the business or operations of the Auctioned Assets, Seller is not, as of the date of this Agreement, subject to any outstanding judgment, rule, order, writ, injunction or decree of any Governmental Authority which would, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. The representations and warranties of Seller set forth in this Section 4.08 shall not apply to, and do not cover, any environmental matters which, with respect to any representations and warranties of Seller, are exclusively governed by Section 4.10.
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| SECTION 4.09. Permits; Compliance with Law.
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| (a) Except as set forth in Schedule 4.09(a), Seller holds, and is in compliance with, all Permits necessary to conduct the business and operations of the Auctioned Assets as currently conducted, and, to the knowledge of Seller, Seller is otherwise in compliance with all Laws of any Governmental Authority applicable to the business and operations of the Auctioned Assets, except for such failures to hold or comply with such Permits, or such failures to be in compliance with such Laws, which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (b) Except as set forth in Schedule 4.09(b),
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| Seller has not received any written notification that it is in violation of any of such Permits or Laws, except for notifications of violations which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. The representations and warranties of Seller set forth in this Section 4.09 shall not apply to, and do not cover, (i) any environmental matters which, with respect to any representations and warranties of Seller, are exclusively governed by Section 4.10, (ii) any ERISA matters which, with respect to any representations and warranties of Seller, are exclusively governed by Section 4.12, (iii) any tax matters which, with respect to any representations and warranties of Seller, are exclusively governed by Section 4.13 or (iv) any nuclear matters which, with respect to any representations and warranties of Seller, are exclusively governed by Section 4.17.
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| SECTION 4.10. Environmental Matters. (a) Except as set forth in Schedule 4.10, Seller holds, and is in compliance with, all Environmental Permits required under applicable Environmental Laws to conduct the business and operations of the Auctioned Assets as currently conducted, 4 5
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| [NYCorp;1173312.1:4738W:11/14/00-11: aI
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| 46 and, to the knowledge of Seller, Seller is in compliance with Environmental Laws applicable to the business and operations of the Auctioned Assets, except for such failures to hold or comply with such Environmental Permits, or such failures to be in compliance with such Environmental Laws, which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (b) Except as set forth in Schedule 4.10, Seller has not received written notice from a Governmental Authority (i) that it is in violation of any Environmental Law with respect to the Auctioned Assets or (ii) that it is a potentially responsible party under the Federal Comprehen sive Environmental Response, Compensation, and Liability Act or any similar state law with respect to any real property included in the Buyer Real Estate or in any lease forming part of the Auctioned Assets, except for such matters under such Environmental Laws as would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (c) Except as set forth in Schedule 4.10, with respect to the business and operations of the Auctioned Assets, Seller has not entered into or agreed to any consent decree or order and is not subject to any outstanding judgment, decree or judicial order relating to compliance with any Environmental Law or to the remediation of Hazardous Substances under any Environmental Law, except for such consent decrees and orders, judgments, decrees or judicial orders that would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (d) Except as set forth in Schedule 4.10, there are no claims, causes of action, proceedings or investigations pending, or to the knowledge of Seller, threatened against or relating to Seller, under or relating to any Environmental Law, which would, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. The representations and warranties made in this Section 4.10 are Seller's exclusive representations and warranties relating to environmental matters.
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| SECTION 4.11. Labor Matters. Seller has previously made available to Buyer copies of all collective bargaining agreements to which Seller is a party or is subject and which relate to the business or operations of the Auctioned Assets. Except as set forth in Schedule 4.11, with respect to the business and operations of the Auctioned Assets, (a) there is no labor strike, slowdown or stoppage presently affecting the Auctioned Assets or, to the
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 47 knowledge of Seller, threatened that would affect the Auctioned Assets, (b) Seller has not received notice that any representation petition respecting the employees of Seller has been filed with the National Labor Relations Board, (c) Seller has not experienced any primary work stoppage since at least December 31, 1997, (d) Seller has not received written notice of any unfair labor practice complaint against Seller pending before the National Labor Relations Board and (e) no arbitration proceeding arising out of or under collective bargaining agreements is pending against Seller except, in the case of each of the foregoing clauses (a) through (e), for such matters as would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| SECTION 4.12. ERISA; Benefit Plans.
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| Schedule 4.12 sets forth a list, as of the date of this Agreement, of all material deferred compensation, profit-sharing, retirement and pension plans and all.
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| material bonus and other material employee benefit or fringe benefit plans maintained, or with respect to which contributions have been made, by Seller with respect to current employees employed in connection with the operations of the Generating Plants and the Gas Turbines (collectively, "Benefit Plans"). Copies of all such Benefit Plans have been made available to Buyer. Seller and each trade or business (whether or not incorporated) which are treated as a single employer with Seller under Section 414(b), (c), (m) or (o) of the Code (an "ERISA Affiliate") have fulfilled their respective obligations under the minimum funding requirements of Section 302 of ERISA, and Section 412 of the Code, with respect to each Benefit Plan which is an "employee pension benefit plan" as defined in Section 3(2) of ERISA. Each Benefit Plan is in compliance in all material respects with the presently applicable provisions of ERISA and the Code, except for such failures to fulfill such obligations or comply with such provisions which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. Neither Seller nor any ERISA Affiliate has incurred any liability under Section 4062(b) of ERISA, or any withdrawal liability under Section 4201 of ERISA, to the Pension Benefit Guaranty Corporation (the "PBGC") in connection with any Benefit Plan which is subject to Title IV of ERISA which liability remains outstanding. Neither Seller nor any ERISA Affiliate has engaged in any transaction within the meaning of Section 4069(b) or Section 4212(c) of ERISA. No Benefit Plan and no "employee pension benefit plan" (as defined in Section 3(2) of ERISA) maintained by Seller or any ERISA Affiliate or to which Seller or any ERISA Affiliate has contributed is a multiemployer plan. Seller has the right,
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| [NYCorp;I173312.1:4738W:11/14/00-11:45a]
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| 48 in accordance with and subject to the terms thereof, to terminate and modify each Benefit Plan.
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| SECTION 4.13. Taxes. With respect to the Auctioned Assets and businesses of Seller related to the Auctioned Assets, (a) all Tax Returns required to be filed have been filed and all such returns were correct and complete in all respects and (b) all Taxes shown to be due on such Tax Returns, and all Taxes otherwise owed for which a Tax Return is not required to be filed, have been paid in full, except to the extent that any failure to file or any failure of filed returns to be correct and complete or any failure to pay any Taxes would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. No written notice of deficiency or assessment has been received from any taxing authority with respect to liabilities for Taxes of Seller in respect of the Auctioned Assets which has not been fully paid or finally settled or which is not being contested in good faith through appropriate proceedings, except for any such notices regarding Taxes which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. Except as set forth in Schedule 4.13, there are no outstanding agreements or waivers extending the applicable statutory periods of limitation for Taxes associated with the Auctioned Assets for any period, except for any such agreements or waivers which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect. The representations and warranties of Seller set forth in this Section 4.13 shall not apply to, and do not cover, any Decommissioning matters which, with respect to the representations and warranties of the Seller, are exclusively governed by Sections 4.18 and 4.19.
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| SECTION 4.14. Undisclosed Liabilities. As of the date of this Agreement, there are no liabilities or obligations of any nature or kind (absolute, accrued, contingent or otherwise) with respect to the Auctioned Assets that, if they had existed as of December 31, 1999, would have been required to be set forth on Seller's December 31, 1999 balance sheet or in the notes thereto prepared in accordance with GAAP, as applied by Seller in connection with such balance sheet (the "Balance Sheet"),
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| except for any such liabilities or obligations which (a) are disclosed, reflected or reserved against in the Balance Sheet, (b) are disclosed in or contemplated or permitted by this Agreement or the Ancillary Agreements (including the Assumed Obligations), (c) have been incurred in the ordinary course of business, (d) are Retained Liabilities, or (e) are set forth in Schedule 4.14.
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 49 SECTION 4.15. Brokers. No broker, finder or other person is entitled to any brokerage fees, commissions or finder's fees in connection with the transaction contemplated hereby by reason of any action taken by Seller, except Morgan Stanley & Co. Incorporated, which is acting for and at the expense of Seller.
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| SECTION 4.16. Insurance. Set forth in Schedule 4.16(a) is a description of the insurance program of Seller related to the ownership or operation of the Auctioned Assets. Except as set forth in Schedule 4.16(b), Seller carries policies of insurance covering fire, workers' compensation, property all-risk, comprehensive bodily injury, property damage liability, automobile liability, product liability, completed operations, explosion, collapse, contractual liability, personal injury liability and other forms of insurance relating to the Auctioned Assets, or otherwise self-insures in accordance with all statutory and regulatory criteria against any such liabilities, which insurance, in all material respects, is in such amounts, has such deductibles and retentions and is underwritten by such companies as would be obtained in accordance with Prudent Utility Practices. Such insurance policies and arrangements are in full force and effect, all premiums with respect thereto are currently paid, and Seller is in compliance in all material respects with the terms thereof.
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| SECTION 4.17. Nuclear Matters. (a) Except as set forth in Schedule 4.17, Seller holds, and is in compliance with, all NRC Permits required under the Atomic Energy Act and the Energy Reorganization Act for Seller to conduct the business and operations of the Auctioned Assets as currently conducted, and, to the knowledge of Seller, Seller is in compliance with the Atomic Energy Act and the Energy Reorganization Act and all orders or decisions of the NRC applicable to the business and operations of the Auctidned Assets, except for such failures to hold or comply with such NRC Permits, or such failures to be in compliance with the Atomic Energy Act or the Energy Reorganization Act, or any such orders or decisions of the NRC, which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (b) Except as set forth in Schedule 4.17, Seller has not received from any Governmental Authority any written notice that it is currently in violation of any order, rule, regulation or decision of the NRC applicable to the Auctioned Assets.
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 50 SECTION 4.18. Oualified Decommissioning Fund.
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| (a) Seller's Qualified Decommissioning Fund is a trust validly existing and in good standing under the laws of the State of New York. Seller's Qualified Decommissioning Fund satisfies the requirements necessary for such Fund to be treated as a "Nuclear Decommissioning Reserve Fund" within the meaning of Section 468A(a) of the Code and as a "nuclear decommissioning fund" and a "qualified nuclear decommission ing fund" within the meaning of Treas. Reg. Section 1.468A-l(b) (3). Seller's Qualified Decommissioning Fund is in compliance with all applicable rules and regulations of the NRC, FERC, PSC and IRS, except for any such noncompli ance which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| Seller's Qualified Decommissioning Fund has not engaged in any acts of "self-dealing" as defined in Treas. Reg.
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| Section 1.468A-5(b)(2). No "excess contribution", as defined in Treas. Reg. Section 1.468A-5(c)(2)(ii), has been made to the Qualified Decommissioning Fund which has not been withdrawn within the period provided under Treas. Reg.
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| Section 1.468A-5(c) (2) (i). Since 1988, Seller has made timely and valid elections to make annual contributions to the Qualified Decommissioning Fund.
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| (b) Seller has delivered to Buyer a copy of the schedule of ruling amounts most recently issued by the IRS for the Qualified Decommissioning Fund, a copy of the request that was filed to obtain such schedule of ruling amounts and a copy of any pending request for revised ruling amounts, in each case, together with all exhibits, amend ments and supplements thereto. There are no interim rate orders that may be retroactively adjusted, or retroactive adjustments to interim rate orders, that may materially affect amounts that Buyer may contribute to the Qualified Decommissioning Fund or that may require material distributions to be made from the Qualified Decommissioning Fund.
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| (c) The December 31, 1999 balance sheet for the Qualified Decommissioning Fund, previously made available to Buyer, has been prepared in accordance with GAAP applied on a consistent basis (except as may be described in the notes thereto) and fairly presents the financial position of the Qualified Decommissioning Fund as of December 31, 1999.
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| (d) Seller's Qualified Decommissioning Fund has filed all Tax Returns required to be filed and all material Taxes shown to be due on such Tax Returns have been paid in full. No written notice of any material deficiency or assessment has been received from any taxing authority with respect to liabilities for Taxes of the Qualified Decommis-INYCorp;1173312.1:4738W: 11/14/00- 11: 45aI
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| 51 sioning Fund which has not been fully paid or finally settled or which is not being contested in good faith through appropriate proceedings.
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| (e) To the extent Seller has, prior to the Closing Date, pooled the assets of the Qualified Decommis sioning Fund with those of any other assets for investment purposes, such pooling arrangement is a partnership for U.S.
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| federal income Tax purposes.
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| SECTION 4.19. Nonqualified DecommissioninQ Fund.
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| (a) Seller's Nonqualified Decommissioning Fund is a trust validly existing and in good standing under the laws of the State of New York. Seller's Nonqualified Decommissioning Fund is in compliance with all applicable rules and regula tions of the NRC and FERC, except for any such noncompliance which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| (b) The December 31, 1999 balance sheet for the Nonqualified Decommissioning Fund, previously made available to Buyer, has been prepared in accordance with GAAP applied on a consistent basis (except as may be described in the notes thereto) and fairly presents the financial position of the Nonqualified Decommissioning Fund as of December 31, 1999.
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| SECTION 4.20. Sufficiency of Auctioned Assets.
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| Except (i) as set forth in Section 2.05, (ii) to the extent that any Permit, Environmental Permit, NRC Permit or Contract may not be transferable or assignable to Buyer, (iii) contracts or other agreements associated with emergency preparedness (including those relating to emergency sirens or radiation monitors), (iv) contracts or other agreements with NYPA and (v) as expressly set forth in Schedules 4.09 or 4.10, the Auctioned Assets constitute all of the assets necessary to operate the Generating Plants and the Gas Turbines in the manner currently operated by Seller, subject to Permitted Exceptions.
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| SECTION 4.21. Condemnation. Seller has not received any written notice from any Governmental Authority of any pending or threatened proceeding to condemn or take by power of eminent domain or otherwise all or any part of the Buyer Real Estate.
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| SECTION 4.22. No Chanae in Accounting Methods or Practices. Since December 31, 1999, Seller has not materially changed its accounting methods or practices with respect to the Auctioned Assets.
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| [NYCorp;1173312.1:4738W: 11/14/00-11 :45a
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| 52 EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF SELLER EXPRESSLY SET FORTH IN THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR ANY CERTIFICATES, EXHIBITS OR SCHEDULES HERETO OR THERETO, THE AUCTIONED ASSETS ARE BEING SOLD, ASSIGNED, CONVEYED, TRANSFERRED AND DELIVERED "AS IS, WHERE IS", AND SELLER IS NOT MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, CONCERNING SUCH AUCTIONED ASSETS OR WITH RESPECT TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, INCLUDING, IN PARTICULAR WITH RESPECT TO THE AUCTIONED ASSETS, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED BY SELLER AND WAIVED BY BUYER. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SELLER MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE INFORMATION SET FORTH IN, OR CONTEMPLATED BY, THE INFORMATION MEMORANDUM.
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| ARTICLE V Representations and Warranties of Buyer Buyer represents and warrants to Seller as follows:
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| SECTION 5.01. Organization. Buyer is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as is now being conducted. At or prior to Closing, Buyer will be duly qualified and licensed to do business as a foreign limited liability company and will be in good standing in the State of New York.
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| SECTION 5.02. Authority Relative to This Agreement. Buyer has all necessary limited liability company power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and such Ancillary Agreements and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized by the Board of Directors of Buyer or by a committee thereof to whom such authority has been duly delegated and no other proceedings on the part of Buyer are necessary to authorize this Agreement or such Ancillary Agreements or the consummation of the transactions contemplated hereby or thereby. This Agreement and such Ancillary Agreements have been duly and (NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 53 validly executed and delivered by Buyer and, assuming that this Agreement and the Ancillary Agreements constitute valid and binding agreements of Seller and each other party thereto (other than Buyer), this Agreement and such Ancillary Agreements constitute valid and binding agreements of Buyer, enforceable against Buyer in accordance with their respective terms.
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| SECTION 5.03. Consents and Approvals; No Violation. (a) Subject to obtaining the Buyer Required Regulatory Approvals and the Seller Required Regulatory Approvals, neither the execution and delivery of this Agreement or the Ancillary Agreements to which it is party by Buyer nor the purchase by Buyer of the Auctioned Assets pursuant to this Agreement will (i) conflict with or result in any breach of any provision of the Certificate of Formation or Operating Agreement of Buyer, (ii) result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Buyer or any of its subsidiaries is a party or by which any of their respective assets may be bound, or (iii) violate any Law applicable to Buyer, or any of its assets, except in the case of clauses (ii) and (iii) for such failures to obtain a necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the ability of Buyer to consummate the transactions contemplated by, and discharge its obligations under, this Agreement and the Ancillary Agreements (a "Buyer Material Adverse Effect").
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| (b) Except for (i) approval of the PSC, pursuant to Section 70 of the Public Service Law of the State of New York, of the transfer to Buyer of the Auctioned Assets, (ii) a ruling or approval of the PSC granting Buyer lightened regulatory treatment that is comparable to regulatory treatment granted to other providers of wholesale electric services in New York State and that would not prevent Buyer from competing on a comparable basis with such other providers, (iii) the filings by Buyer and Seller required by the HSR Act and the expiration or earlier termination of all waiting periods under the HSR Act, (iv) application by Buyer to, and the approval of, FERC under (A) Section 203 of the Federal Power Act with respect to the transfer of Auctioned Assets constituting jurisdictional assets under the Federal Power Act and (B) Section 205 of the Federal Power Act with respect to (1) the Continuing Site Agreement and the Power Purchase Agreement, and (2) authorization to sell energy from the
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| [NYCorp;1173312.1:4738W: 11/14/00-11 :45a)
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| 54 Generating Plants and Gas Turbines at market-based rates, (v) application by Buyer to, and the approval of, the NRC for the transfer of the NRC licenses for the Generating Plants under the Atomic Energy Act, (vi) application to, and determination by the PSC and such state Governmental Authorities as may be required under PUHCA that, for purposes of Section 32(c) of PUHCA, allowing the Auctioned Assets to be "an eligible facility" will benefit consumers, is in the public interest and does not violate state law, (vii) qualification of Buyer, with respect to the Auctioned Assets, as an exempt wholesale generator under the Energy Policy Act of 1992, (viii) an application for a certificate of occupancy, consent or similar approval to authorize the change in occupancy of the Buyer Real Estate contemplated by this Agreement required pursuant to the Code of the Village of Buchanan, including specifically Section 211.49 thereof and (ix) an application for the consent of the Commissioner of General Services of the State of New York required for the assignment from Seller to Buyer of the right to install and maintain a fish return pipeline in an area in the Hudson River approximately 30 feet wide and 330 feet long (collectively, the "Buyer Required Regulatory Approvals"),
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| no declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary for the consummation by Buyer of the transactions contemplated hereby or by the Ancillary Agreements, other than such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not obtained or made, would not, individually or in the aggregate, be reasonably expected to have a Buyer Material Adverse Effect.
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| (c) To the knowledge of Buyer, there is no reason that it should fail to obtain the Buyer Required Regulatory Approvals.
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| SECTION 5.04. Availability of Funds. Buyer has sufficient funds available to it to provide sufficient funds prior to Closing to pay the Purchase Price (as adjusted).
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| SECTION 5.05. Brokers. No broker, finder or other person is entitled to any brokerage fees, commissions or finder's fees in connection with the transaction contem plated hereby by reason of any action taken by Buyer.
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| ARTICLE VI Covenants of the Parties
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a)
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| 55 SECTION 6.01. Conduct of Business Relating to the Auctioned Assets. (a) Except with the prior written consent of Buyer (such consent not to be unreasonably withheld or delayed) or as may be required to effect the purchase and sale of the Auctioned Assets and related transactions contemplated by this Agreement or the Ancillary Agreements or as necessary to comply with applicable Law, during the period from the date of this Agreement to the Closing Date, Seller will operate and maintain the Auctioned Assets in the usual, regular and ordinary course consistent with Prudent Utility Practices.
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| (b) Without limiting the generality of the foregoing, except as may be required by this Agreement or the Ancillary Agreements or as necessary to comply with applicable Law, during the period from the date of this Agreement to Closing, without the prior written consent of Buyer (such consent not to be unreasonably withheld or delayed), Seller will not:
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| (i) except for Permitted Exceptions, grant any Encumbrance on the Auctioned Assets; (ii) make any material change in the levels of Inventory customarily maintained by Seller with respect to the Auctioned Assets, other than consistent with Prudent Utility Practices; (iii) sell, lease (as lessor), transfer or otherwise dispose of, any of the Auctioned Assets, other than assets used, consumed or replaced in the ordinary course of business consistent with Prudent Utility Practices; (iv) terminate, materially extend or otherwise materially amend any of the Contracts or waive any default by, or release, settle or compromise any material claim against, any other party thereto; provided, however, that Seller, at its option, may (A) terminate any Contract that is not a Required Contract and (B) amend the Indian Point Facilities Agreement between Seller and NYPA dated January 1, 1993 together with attached Memoranda of Understanding Nos. 1, 3-17, 20, 28, 30, 32 and 33 to effect the deletion therefrom of any obligations of Seller relating to the Substation, the Transmission System or the supply of power; (v) terminate, extend or amend any of the Transferable Permits, other than (A) Transferable Permits not material to the operations of the Auctioned 7
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| [NYCorp;1173312.1:4 38W:11/14/00-11:45a]
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| 56 Assets as currently conducted, (B) routine renewals and (C) transfers contemplated by Section 6.03(b);
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| (vi) establish, adopt, enter into or amend the Collective Bargaining Agreement, Benefits Plans or other employment plans, arrangements or practices, or grant to any Affected Employee any material increase in compensation, except (A) to the extent required by the terms of the Collective Bargaining Agreement, any employment agreement in effect as of the date of this Agreement, or applicable Law, (B) in the ordinary course of business consistent with past practice or (C) as set forth in Schedule 6.01(b) (vi);
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| (vii) enter into, amend or otherwise modify any real or personal property Tax agreement, treaty or settlement relating to the Auctioned Assets; or (viii) materially change its accounting methods or practices with respect to the Auctioned Assets.
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| (c) Except for contracts or agreements related to matters set forth in Schedule 6.01(c) (i) not to exceed the respective dollar amounts specified for each such contract or agreement set forth in such schedule, Buyer shall not be required to assume the liabilities and obligations under any contracts or agreements entered into, without the prior written consent of Buyer, by Seller during the period from the date of this Agreement to Closing, if such contracts or agreements (i) are for the purchase, sale or storage of Nuclear Fuel, (ii) at Closing, have individual future liability outstanding in excess of $500,000 or aggregate future liability outstanding in excess of $5,000,000 or (iii) at Closing, have individual future liability outstanding of less than or equal to $500,000 or aggregate future liability outstanding of less than or equal to
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| $5,000,000 and with respect to which Seller has not used its reasonable best efforts to provide that such contract or agreement may be terminated by Buyer at its option at any time after Closing without penalty or cost (other than de minimis administrative costs); provided, that, notwithstanding anything in this Section 6.01(c) to the contrary, Buyer shall assume the liabilities and obligations of Seller under any contract or agreement entered into by Seller in accordance with Prudent Utility Practices in connection with the capital projects listed in Schedule 6.01(c) (ii) and the work specified in Schedule 6.01(c) (iii) not to exceed the respective dollar amounts specified for such capital projects and work set forth in such schedules.
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| (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 57 (d) Notwithstanding anything in this Section 6.01 to the contrary, Seller may take any action, incur any expense or enter into any obligation with respect to the Auctioned Assets to the extent that (i) all obligations and liabilities arising with respect thereto do not constitute Assumed Obligations or (ii) Seller otherwise provides that such obligations and liabilities shall not be assumed or retained by Buyer.
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| (e) Promptly after the date of this Agreement, Seller shall deliver to Buyer a copy of the contract dated April 11, 1996 between Seller and Westinghouse Electric Corporation and relating to nuclear fuel fabrication (the "Westinghouse Contract"). Within 30 days of such delivery, Buyer may elect, by written notice to Seller, to assume the Westinghouse Contract at Closing and upon such election the Westinghouse Contract shall be deemed to be a "Required Contract" for purposes of this Agreement; provided, however, that Seller shall retain all rights to credits or discounts to which it is entitled under any settlement between Westinghouse Electric Corporation and Seller.
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| SECTION 6.02. Access to Information. (a) As part of the transition process, Buyer and Seller shall, or shall cause any committees established in connection there with to, negotiate in good faith to establish rules for access to the information addressed in this Section 6.02.
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| Pursuant to such rules for access, between the date of this Agreement and the Closing Date, Seller will, subject to the Confidentiality Agreement, during ordinary business hours and upon reasonable notice and subject to compliance with applicable Law: (i) give Buyer or its Affiliates and their representatives reasonable access to (A) all books, records, plants, offices and other facilities and properties constituting the Auctioned Assets, including for the purposes of observing the operation by Seller of the Auctioned Assets and (B) the Generating Plants or Gas Turbines and to applicable employees of Seller, (ii) permit Buyer or its Affiliates to make such reasonable inspections thereof as Buyer or its Affiliates may reasonably request, (iii) furnish Buyer or its Affiliates with such financial and operating data and other information with respect to the Auctioned Assets as Buyer or its Affiliates may from time to time reasonably request, and (iv) furnish Buyer or its Affiliates, upon request, a copy of each material report, schedule or other document with respect to the Auctioned Assets filed by Seller with, or received by Seller from, the PSC, NRC, IRS or FERC; provided, however, that (A) any such activities shall be conducted in such a manner as not to interfere with the operation of the Auctioned Assets, (B)
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| Seller shall not be required to take any action which would (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 58 constitute a waiver of the attorney-client privilege and (C)
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| Seller need not supply Buyer with (1) any information or access which Seller is under a legal obligation not to supply (provided that upon the prior written request of Buyer, Seller will use its reasonable best efforts to obtain the necessary consents) or (2) any documents attached as Item 4(c) studies, surveys, analyses or reports to Seller's application pursuant to the HSR Act. Notwithstanding anything in this Section 6.02 to the contrary, (I) Seller will not be required to provide such information or access to any employee records other than Continued Employee Records, (II) Buyer shall not have the right to perform or conduct any environmental or radiological sampling or testing at, in, on, around or underneath the Auctioned Assets and (III) Seller shall not be required to provide such access or information with respect to any Retained Asset or Retained Liabilities (unless reasonably necessary in connection with Buyer's observations or investigations relating to the Auctioned Assets). Seller shall promptly provide Buyer with copies of all binding and non-binding notices delivered by Seller relating to the ordering of, or scheduling of future delivery of, Nuclear Fuel under any Contract.
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| (b) Unless otherwise agreed to in writing by Buyer, Seller shall, for a period commencing on the Closing Date and terminating three years after the Closing Date, keep confidential and shall cause its representatives to keep confidential all Confidential Information (as defined in the Confidentiality Agreement) on the terms set forth in the Confidentiality Agreement. Except as contemplated by the following sentence, Seller shall not release any person from any confidentiality agreement now existing with respect solely to the Auctioned Assets or waive or amend any provision thereof. After the Closing Date, upon reasonable request of Buyer, Seller shall, to the maximum extent permitted by Law and the applicable Bidder Confidentiality Agreement (as defined below), appoint Buyer to be Seller's representative and agent in respect of confidential information relating to the Auctioned Assets under the confidentiality agreements ("Bidder Confidentiality Agreements") between Seller and prospective purchasers of the Auctioned Assets.
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| (c) After Closing, Buyer shall retain all Operating Records, Decommissioning Accounting Records and Continued Employee Records (whether in electronic form or otherwise) delivered by Seller on the Closing Date relating to the Auctioned Assets prior to Closing. Buyer agrees that, after Closing Date, Seller shall have the right, upon reasonable request to Buyer, to receive from Buyer copies of (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 59 any Operating Records, Decommissioning Accounting Records, Continued Employee Records or other information in Buyer's possession relating to the Auctioned Assets, the Decommissioning Funds or the Continued Employees, as the case may be, for periods prior to Closing and required by Seller in order to comply with applicable Law or to the extent that such records or information may reasonably be required by Seller in connection with any claim, cause of action, proceeding or investigation in which Seller may be involved, provided that there is no conflict between Buyer and Seller in such claim, cause of action, proceeding or investigation. Seller shall reimburse Buyer for its reasonable costs and expenses incurred in connection with the foregoing sentence.
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| SECTION 6.03. Consents and Approvals; Trans ferable Permits. (a) Seller and Buyer shall cooperate with each other and (i) prepare and file (or otherwise effect) as soon as practicable following the date of this Agreement, all applications, notices, petitions and filings and execute all agreements and documents with respect to and (ii) use their reasonable best efforts to (A) obtain (x) the Seller Required Regulatory Approvals and the Buyer Required Regulatory Approvals, (y) any other consents, approvals or authorizations of any other Governmental Authorities or third parties that are necessary to consummate the transactions contemplated by this Agreement or the Ancillary Agreements and (z) the transfer, issuance or reissuance to Buyer of all Transferable Permits and (B) as appropriate, facilitate the substitution of Buyer for Seller in connection with pending Transferable Permits. Without limiting the generality of the foregoing, (1) each Party agrees to, upon the other Party's request, support such other Party's applications for regulatory approvals of the purchase and sale of the Auctioned Assets contemplated by this Agreement and (2) Buyer and Seller agree to defend any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the Ancillary Agreements, or the consummation of the transactions contemplated hereby or thereby, including seeking to have any stay or temporary restraining order entered by any Governmental Authority vacated or reversed.
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| (b) Following the date of this Agreement, Seller shall commence the process of transferring to Buyer the Transferable Permits, including completing and filing applications and related documents with the appropriate Governmental Authorities. The Parties shall have the right to review and comment on in advance all filings relating to the transactions contemplated by this Agreement or the Ancillary Agreements proposed to be made by the other Party
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| [NYCorp;1173312.1: 4738W: 11/14/00-11:45a]
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| 60 and such other Party shall have the right to appear in (i) any proceeding relating to such filings with Governmental Authorities and (ii) any in-person meeting relating to such filings or any announced or scheduled meeting attended by the Chief Nuclear Officer of Seller, in each case, with the NRC or NYSDEC. The Parties shall in good faith consider such comments before making any such filings to the extent permitted by Law. Notwithstanding the foregoing, neither Party shall be obligated to submit to the other Party any documents attached as Item 4(c) studies, surveys, analyses and reports to its application pursuant to the HSR Act.
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| (c) The filing fees in connection with the filings by Seller and Buyer under the HSR Act that are part of the Seller Required Regulatory Approvals and Buyer Required Regulatory Approvals shall be borne entirely by Buyer.
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| (d) Seller shall bear the costs and expenses in connection with the satisfaction of the Closing condition set forth in Section 7.02(d) with respect to Required Software and Patents; provided, that Buyer shall bear all costs and expenses associated with any maintenance or similar agreements associated with the Required Software and the Patents relating to periods after Closing; provided, that such costs and expenses are comparable to the costs and expenses paid by Seller prior to Closing or are in accordance with applicable industry pricing at the relevant time.
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| SECTION 6.04. Further Assurances. (a) Subject to the terms and conditions of this Agreement, each of the Parties will use its reasonable best efforts to take, or cause to be taken, as soon as possible, all action, and to do, or cause to be done, as soon as possible, all things necessary, proper or advisable under applicable Laws to consummate the sale of the Auctioned Assets pursuant to this Agreement as soon as possible, including using its reasonable best efforts to ensure satisfaction of the conditions precedent to each Party's obligations hereunder.
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| Neither of the Parties will, without prior written consent of the other Party, take or fail to take, or permit their respective Affiliates to take or fail to take, any action, which would reasonably be expected to prevent or materially impede, interfere with or delay the consummation, as soon as possible, of the transactions contemplated by this Agreement or the Ancillary Agreements.
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| (b) From time to time after the date of this Agreement, without further consideration and at its own INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 61 expense, (i) Seller will execute and deliver such instru ments of assignment or conveyance as Buyer may reasonably request to more effectively vest in Buyer Seller's title to the Auctioned Assets (subject to Permitted Exceptions and the other terms of this Agreement) and (ii) Buyer will execute and deliver such instruments of assumption as Seller may reasonably request in order to more effectively consu mmate the sale of the Auctioned Assets and the assumption of the Assumed Obligations pursuant to this Agreement.
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| (c) Seller and Buyer shall cooperate in good faith to establish a transition committee to consider operational and business issues related to the purchase and sale of the Auctioned Assets.
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| (d) Prior to the Closing Date, Seller shall cooperate in good faith with Buyer to enable Buyer to obtain insurance, including insurance required under the Price-Anderson Act, in respect of the Auctioned Assets comparable to that maintained by Seller as of the date of this Agreement.
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| (e) Not later than five days prior to Closing, Seller shall deliver to Buyer a schedule setting forth in reasonable detail the liabilities and obligations which can be reasonably determined at such time that Buyer will assume at Closing pursuant to Section 2.03(a) (ii).
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| (f) Buyer may, at its own cost and expense, seek authorizations for the use of software, other than the Required Software, and patented items and processes, other than the Patents, and Seller shall cooperate in good faith in connection with such efforts.
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| (g) (i) Not later than 60 days prior to Closing, Seller shall deliver to Buyer a schedule setting forth the Contracts that, in accordance with Section 2.04, will not be assigned to Buyer at Closing and (ii) not later than 30 days prior to closing, Buyer shall deliver to Seller a schedule setting forth the software, other than the Required Software, and the patented items and processes, other than the Patents, with respect to which Buyer has received or will receive prior to Closing authorizations for the use thereof.
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| (h) To the extent that Westinghouse Electric Corporation is the manufacturer or vendor of, or provider of service with respect to, machinery, equipment, facilities, furniture or other personal property that constitute Auctioned Assets, Buyer agrees to be bound by and comply with any contractually-imposed waiver and/or limitation of (NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 62 liability that has been contractually imposed on Seller by Westinghouse Electric Corporation to the same extent as Seller.
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| SECTION 6.05. Public Statements. The Parties shall consult with each other prior to issuing any public announcement, statement or other disclosure with respect to this Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby, including any statement appearing in any filing contemplated hereby or thereby, and shall not issue any such public announcement, statement or other disclosure prior to such consultation, except as may be required by Law; provided that no Party shall issue its initial public announcement, statement or other disclosure with respect to the transactions contemplated hereby without the prior consent of such other Party (which consent shall not be unreasonably withheld or delayed).
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| SECTION 6.06. Tax Matters. (a) All transfer and sales Taxes (including any petroleum business Taxes and similar excise Taxes on sales of petroleum based products) incurred in connection with this Agreement and the trans actions contemplated hereby shall be borne by Buyer. Buyer shall prepare and file in a timely manner any Tax Returns or other documentation relating to such Taxes; provided, however, that, to the extent required by applicable Law, Seller will join in the execution of any such Tax Returns or other documentation relating to any such Taxes. Buyer shall provide to Seller copies of each Tax Return described in the proviso in the preceding sentence at least 30 days prior to the date such Tax Return is required to be filed.
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| (b) Each Party shall provide the other Party with such assistance as may reasonably be requested by the other Party in connection with the preparation of any Tax Return, any audit or other examination by any taxing authority, or any judicial or administrative proceedings relating to liability for Taxes, and each Party shall retain and provide the other Party with any records or information which may be relevant to such Tax Return, audit, examination or proceedings. Any information obtained pursuant to this Section 6.06(b) or pursuant to any other Section hereof providing for the sharing of information or review of any Tax Return or other instrument relating to Taxes shall be kept confidential by the parties hereto.
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| (c) If either Buyer or Seller receives a refund with respect to Taxes to be prorated in accordance with Sections 2.03(a) (x) and 2.03(b) (ix) for a taxable period including the Closing Date, Buyer shall pay to Seller the portion of any such refund attributable to the portion of (NYCorp;1173312.1:4738W:11/14/OO-11:45a]
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| 63 such taxable period prior to the Closing Date, and Seller shall pay to Buyer the portion of any such refund attribu table to the portion of such taxable period on and after the Closing Date.
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| (d) With respect to Taxes to be prorated in accordance with Sections 2.03(a) (x) and 2.03(b) (ix), Buyer shall prepare and timely file all Tax Returns, if any, required to be filed after the Closing Date with respect to the Auctioned Assets and shall duly and timely pay all such Taxes shown to be due on such Tax Returns. Buyer's preparation of such Tax Returns for the taxable period in which Closing occurs shall be subject to Seller's approval, which approval shall not be unreasonably withheld or delayed. Buyer shall make each such Tax Return available for Seller's review and approval no later than 30 days prior to the date such Tax Return is required to be filed, it being understood that Seller's failure to approve any such Tax Return shall not limit Buyer's obligation to timely file such Tax Return and duly and timely pay all Taxes shown to be due thereon. Seller shall, to the extent required by applicable Law, join in the execution of any such Tax Returns.
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| (e) Seller and Buyer shall cooperate and provide each other with such assistance as may be reasonably requested by the other Party in connection with obtaining the rulings set forth in Section 6.07(c). Seller and Buyer shall jointly control all proceedings in connection with obtaining the rulings set forth in Section 6.07(c) (i) (the "joint rulings"); provided, however, that neither Party shall take any action except in connection with any ruling set forth in Section 6.07(c) (i) directed solely at such Party without the consent of the other Party, which consent shall not be unreasonably withheld; and provided further that Buyer and Seller shall share equally all expenses (other than their own legal fees) incurred in seeking and obtaining the joint rulings.
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| SECTION 6.07. Decommissioning Funds. (a) At Closing, Seller shall cause all of the assets of the Qualified Decommissioning Fund to be transferred to Buyer (or, if directed in writing to do so by Buyer, to the trustee of any trust specified in such written direction).
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| Such assets shall consist of equity securities, fixed income securities and de minimis amounts of cash. To the extent that the Fair Market Value of the assets of the Qualified Decommissioning Fund is greater than $430,000,000, the Purchase Price shall be adjusted pursuant to Section 3.02(c) (iii).
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| [NYCorp;1173312.1:4738W: 11/14/00- 11:45aJ
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| 64 (b) To the extent that the Fair Market Value of the assets of the Qualified Decommissioning Fund is less than $430,000,000, Seller shall transfer to Buyer assets of the Nonqualified Decommissioning Fund such that the aggre gate Fair Market Value of the assets of the Decommissioning Funds transferred to Buyer is equal to $430,000,000. If such a transfer is required, such assets shall consist of equity securities, fixed income securities and de minimis amounts of cash.
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| (c) As soon as practicable, after the date of this Agreement, (i) the Parties shall jointly request and use their reasonable best efforts to obtain prior to the Closing Date rulings issued by the IRS to the effect that (A) the Parties and the Qualified Decommissioning Fund shall not recognize any gain or otherwise take into account any income for U.S. federal income Tax purposes by reason of the transfer of the assets of the Qualified Decommissioning Fund to Buyer and that the trust established by Buyer into which the assets of the Qualified Decommissioning Fund are to be transferred at Closing will be treated as a "Nuclear Decommissioning Reserve Fund" within the meaning of Section 468A of the Code and as a "nuclear decommissioning fund" and a "qualified nuclear decommissioning fund" within the meaning of Treas. Reg. Section 1.468A-l(b) (3), (B) Buyer will not recognize any gain or otherwise take into account any income for U.S. federal income Tax purposes by reason of any transfer of the assets of the Nonqualified Decommissioning Fund to Buyer, except to the extent that the amount of cash and other Class I assets (as such term is defined in Treas. Reg. Section 1.338-6T) received by Buyer exceeds the amount of consideration (as determined under Section 1060 of the Code) provided by Buyer for the Auctioned Assets and (C) Seller will be allowed current ordinary deductions for U.S. federal income Tax purposes for any amounts treated as realized by Seller, or otherwise recognized as income to Seller, as a result of Buyer's assumption of Decommissioning liabilities with respect to the Auctioned Assets pursuant to Section 2.03(a) and (ii) Seller shall request and use its reasonable best efforts to obtain prior to the Closing Date an advisory opinion from the New York State Tax Department that the transfer to Buyer of the assets of the Qualified Decommissioning Fund and the Nonqualified Decommissioning Fund, if any, is not a taxable transaction subject to New York State Gross Receipts Tax.
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| SECTION 6.08. Decommissioning. If Buyer has determined as of the expiration date of the NRC operating license for Indian Point Unit 2, including any extension thereof granted by the NRC (the "Expiration Date"), that
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 65 Decommissioning shall occur by a method other than Decon, Buyer shall cause to be paid to Seller from the Buyer Decommissioning Funds an amount equal to fifty percent of the Excess Decommissioning Funds (the "Payment Amount") on the Expiration Date, provided that such payment is permitted under NRC Law and the trust indentures relating to the Buyer Decommissioning Funds (the "Buyer Trust Indentures"). If such payment is not permitted under NRC Law or the Buyer Trust Indentures, then at the completion of Decommissioning, the Payment Amount, and any income with respect thereto accrued from the Expiration Date, shall be paid to Seller.
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| SECTION 6.09. Bulk Sales or Transfer Laws. Buyer acknowledges that Seller will not comply with the provisions of any bulk sales or transfer laws of any jurisdiction in connection with the transactions contemplated by this Agree ment. Buyer hereby waives compliance by Seller with the provisions of the bulk sales or transfer laws of all applicable jurisdictions.
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| SECTION 6.10. Storage And Risk of Loss Concerning Certain Auctioned Assets. Seller shall store or cause to be stored for Buyer any Auctioned Assets not located at the Generating Plants, the Gas Turbines or the Toddville Training Center (including supplies, materials, and spare parts inventory) at Seller's warehouse facilities located in Astoria, Queens County, New York or at such other facilities as the Parties mutually agree in writing until the date that is six months after the Closing Date or, in respect of all or a portion of such Auctioned Assets, until one or more earlier dates proposed by Buyer with reasonable advance notice, which schedule shall be reasonably acceptable to Seller. Buyer agrees to reimburse Seller for its reasonable costs and expenses in connection with such storage. Buyer agrees that Seller shall have no responsibility or liability for the removal of such Auctioned Assets from the storage location, and that Buyer shall have sole responsibility and liability therefor. Seller shall cooperate and allow Buyer to remove the same. Notwithstanding the provisions of Section 9.01, Buyer agrees that Seller shall have no liability or obligation whatsoever for loss or damage with respect to the matters contemplated by this Section 6.10 or such Auctioned Assets, and Buyer agrees to hold each Seller Indemnitee harmless from and against all loss or damage or Indemnifiable Losses, and to indemnify each Seller Indemnitee from and against all loss or damage or Indemnifiable Losses incurred, asserted against or suffered as a result of any storage or other services provided by Seller pursuant to this Section 6.10, in each case, except to the extent any such loss or damage or Indemnifiable Loss results in whole or in part from the gross negligence or
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| [NYCorp;1173312.1:4738W: 11/14/00-11:45aI
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| 66 wilful or wanton acts or omissions to act of any Seller Indemnitee (or any contractor or subcontractor of Seller).
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| SECTION 6.11. Information Resources. From the Closing Date until the date that is 180 days thereafter, Seller shall, at no cost to Buyer, provide Buyer with access to Seller's mainframe computer only to the extent reasonably necessary to enable Buyer to use the PPMIS, MMS (in read only mode), NPMEL, TNMS and Metaphase systems and applications solely in connection with the Auctioned Assets.
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| Buyer shall pay Seller a fee of $25,000 for each 30-day period (prorated for partial periods) beyond such 180-day period during which Buyer uses any or all of such systems or applications; provided that upon the expiration of such 180 day period, Seller shall have the right to terminate such use at any time upon 60 Business Days' prior written notice to Buyer. Such payment by Buyer shall be due and payable to Seller not later than 10 Business Days after the end of each 30-day period during which Buyer used any such system or application. Any amount to be paid under this Section 6.11 shall be paid with interest for the period commencing on the due date for such payment through the payment date, calculated at the prime rate of The Chase Manhattan Bank in effect on such due date, and in cash by wire transfer of immediately available funds. Buyer agrees that it will not use any such access for any purpose other than for the use of the PPMIS, MMS, NPMEL, TNMS and Metaphase systems and applications solely in connection with the Auctioned Assets.
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| Buyer acknowledges that, as long as it retains access to Seller's mainframe computer, Seller, its employees and third parties shall have access to Buyer's information resources systems and applications (including the PPMIS, MMS, NPMEL, TNMS and Metaphase systems and applications that Buyer is permitted to use hereunder) in order to operate, maintain, modify, or secure Seller's information resources systems and applications (including PPMIS, MMS, NPMEL, TNMS and Metaphase systems) and Seller's mainframe computers.
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| Notwithstanding the provisions of Section 9.01, Buyer agrees that Seller shall have no liability or obligation whatsoever for loss or damage with respect to the matters contemplated by this Section 6.11, and Buyer agrees to hold each Seller Indemnitee harmless from and against all loss or damage or Indemnifiable Losses, and to indemnify each Seller Indem nitee from and against all loss or damage or Indemnifiable Losses incurred, asserted against or suffered as a result of Buyer's access to Seller's mainframe computer pursuant to this Section 6.11, in each case, except to the extent any such loss or damage or Indemnifiable Loss results in whole or in part from the gross negligence or wilful or wanton acts or omissions to act of any Seller Indemnitee (or any contractor or subcontractor of Seller).
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 67 SECTION 6.12. Witness Services. At all times from and after the Closing Date, each Party shall use reasonable best efforts to make available to the other Party, upon reasonable written request, its and its subsidiaries' then current or former officers, directors, employees and agents as witnesses to the extent that (i) such persons may reasonably be required by such requesting Party in connection with any claim, cause of action, proceeding or investigation in which such requesting Party may be involved and (ii) there is no conflict between Buyer and Seller in such claim, cause of action, proceeding or investigation. Such other Party shall be entitled to receive from such requesting Party, upon the presentation of invoices for such witness services, payments for such amounts, relating to supplies, disbursements and other out-of-pocket expenses and direct and indirect costs of employees who are witnesses, as may be reasonably incurred in providing such witness services.
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| SECTION 6.13. Trade Names. In furtherance of the transfer of the Auctioned Assets described in Section .2.02(a) (vii), Seller shall not object to the use by Buyer of any trade names, trademarks, service marks or logos (and any rights to and in the same, including any right to use the same) primarily relating to the Generating Plants and Gas Turbines that contain the words "Indian Point".
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| SECTION 6.14. Steam Generator Storage Facility.
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| Seller shall cause a suitable storage facility for the long term on-site storage of the replaced steam generators at Indian Point Unit 2 to be constructed and the replaced steam generators shall be stored therein in compliance with applicable Law prior to the Closing Date.
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| SECTION 6.15. Availability of Cooling Water Usage Credits. (a) At Buyer's option, which shall be exercised by written notice to Seller prior to Closing, Seller shall transfer at Closing any environmental credit points that are held by Indian Point Unit 2 pursuant to the Fourth Amended Stipulation of Settlement and Judicial Consent Order in Natural Resources Defense Council, Inc. v. New York State Department of Environmental Conservation among the Natural Resources Defense Council, Inc., Hudson River Fishermen's Association, d/b/a Hudson Riverkeeper Fund, Inc., Scenic Hudson, Inc., NYSDEC, John P. Cahill as acting commissioner of NYSDEC, Seller, NYPA, Orange & Rockland Utilities, Inc.,
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| and Central Hudson Gas & Electric Corporation, executed by the Honorable Joseph C. Teresi on October 23, 1997 (the "Consent Order"), which Consent Order, by its terms, has expired.
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| INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 68 (b) If Buyer exercises its option under Section 6.15(a) and, notwithstanding the expiration of the Consent Order, for so long as the July outage requirement at the Bowline Point electric generating station ("Bowline"), as specified in paragraph 3 of the Consent Order, continues in effect upon the owner(s) of Bowline and may be met by drawing 2.8 unit-days of outage from Indian Point Unit 2's existing balance of unit-days of outage that were accrued in excess of those required by Indian Point Unit 2 under the Settlement Agreement, as provided for under paragraph 3 of the Consent Order, Buyer shall provide the owner(s) of Bowline with such 2.8 unit-days of outage for use at Bowline at no cost.
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| SECTION 6.16. Nuclear Insurance. Buyer shall maintain any Nuclear Insurance Policies transferred to Buyer as contemplated by Section 2.02(a) (xii) and shall obtain and maintain any other policies of liability and property insurance with respect to the ownership, operation, and maintenance of the Generating Plants which shall afford protection against insurable hazards and risks which meet the requirements of 10 C.F.R. Section 50.54(w) and 10 C.F.R.
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| Part 140 and are consistent with Prudent Utility Practices.
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| Such coverage shall include (a) nuclear liability insurance in such form and in such amount as (i) will provide at least the same degree of protection to Seller that is provided to Seller under the Nuclear Insurance Policies that are contemplated to be transferred to Buyer pursuant to Section 2.02(a) (xii) and (ii) will meet the financial protection requirements of the Atomic Energy Act, and (b) an indemnification agreement as contemplated by Section 170 of the Atomic Energy Act. In the event that the nuclear liability protection system contemplated by Section 170 of the Atomic Energy Act is repealed or changed, Buyer shall obtain and maintain alternate protection against nuclear liability for such period as may be necessary to cover liability arising out of or resulting from the Auctioned Assets, to the extent available and consistent with Prudent Utility Practices, providing substantially equivalent protection to Seller that is provided to Seller under the Nuclear Insurance Policies that are contemplated to be transferred to Buyer pursuant to Section 2.02(a) (xii).
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| SECTION 6.17. Update of Schedules. Seller shall promptly supplement or otherwise amend the Schedules 4.03(a), 4.04(b), 4.07(a), 4.08, 4.09(a), 4.09(b), 4.10, 4.11, 4.13, 4.16(a), 4.16(b) and 4.17 (together, as supplemented or amended, the "Updated Schedules") with respect to matters arising after the date of this Agreement which, if existing at the date of this Agreement, would have been set forth in the Schedules. Upon delivery to Buyer, (NYCorp;1173312.1:4738W: 11/14/00-11 :45aj
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| 69 the Updated Schedules shall become part of this Agreement in lieu of the relevant predecessor Schedules. In the event that Seller delivers Updated Schedules within five Business Days of the Closing Date, Buyer shall be entitled to extend, by written notice to Seller, the Closing Date to the fifth Business Day after Buyer has received such Updated Schedules. Notwithstanding the foregoing, (i) any such Updated Schedules shall not, except as Buyer may otherwise agree in writing, be deemed to have cured any breach of any representation or warranty made by Seller as of the date of this Agreement and (ii) to the extent that any Updated Schedule or Schedules shall contain a Material Adverse Effect that is not cured or waived, the Closing condition set forth in Section 7.02(p) shall not be satisfied.
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| ARTICLE VII Conditions SECTION 7.01. Conditions Precedent to Each Party's Obligations. The respective obligations of each Party to effect the purchase, sale and transfer of the Auctioned Assets contemplated by this Agreement shall be subject to the satisfaction or waiver by such Party on or prior to Closing of the following conditions:
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| (a) each of the Seller Required Regulatory Approvals and each of the Buyer Required Regulatory Approvals shall have become a Final Order (a "Final Order" means any action by the relevant regulatory authority which has not been reversed, stayed, enjoined, set aside, annulled or suspended, as to which any waiting period prescribed by law for the consummation of the transactions contemplated hereby has expired and as to which all conditions to the consummation of such transactions prescribed by Law have been satisfied), and such Final Order shall be in form and substance reasonably acceptable to the Party that sought the consent or approval granted by such Final Order (for purposes of the immediately preceding clause, (i) if Seller is the Party that sought the consent or approval granted by a Final Order, such Final Order shall be deemed to be reasonably acceptable to Seller if it (A) complies in all material respects with the terms and conditions of Seller's application therefor and (B) would not reasonably be expected to have a Seller Material Adverse Effect, (ii) if Buyer is the Party that sought the consent or approval granted by a Final Order, such Final Order shall be deemed to be reasonably acceptable to Buyer if it (A) complies in all material respects with the terms and conditions of Buyer's application therefor and (B) would not reasonably be INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 70 expected to have a Buyer Material Adverse Effect, and (iii) if Seller and Buyer jointly sought, in the same application, the consent or approval granted by a Final Order, such Final Order shall be deemed to be reasonably acceptable to Seller if (A) it complies in all material respects with the terms and conditions of the joint application therefor and (B) it would not reasonably be expected to have a Seller Material Adverse Effect, and such Final Order shall be deemed to be reasonably acceptable to Buyer if it (A) complies in all material respects with the terms and conditions of the joint application therefor and (B) would not reasonably be expected to have a Buyer Material Adverse Effect); provided, however, that if there shall be pending or threatened any appeal or challenge to a Final Order, which, if adversely determined, would cause such Final Order not to be reasonably acceptable (within the meaning of the immediately preceding parenthetical) to the Party that sought such Final Order, then if such Party notifies the other Party that such pending or threatened appeal or challenge exists (such notification to be made as soon as reasonably practicable following knowledge of such pending or threatened appeal or challenge), then such determination of whether a Final Order is reasonably acceptable to the Party who sought it shall be made only after all opportunities for rehearing or judicial review are exhausted and provided, further, that if the determination of whether a Final Order is reasonably acceptable to the Party who sought it shall be delayed pursuant to the foregoing proviso, the Termination Date shall be automatically extended for a period of time equal to the period of time for which such determination shall have been delayed; (b) no (A) suit, action or other proceeding that has a reasonable likelihood of success against any Party or its Affiliates or any of the Auctioned Assets shall be pending before any Governmental Authority which seeks to restrain or prohibit any of the transactions contemplated hereby or by the Ancillary Agreements, or (B) preliminary or permanent injunction, judgment, order or decree by any federal or state court of competent jurisdiction and no statute, rule or regulation enacted by any Governmental Authority preventing the consummation of any of the transactions contemplated hereby or by the Ancillary Agreements (collectively, "Restraints") shall be in effect; and (c) delivery of each of the Deeds, the Continuing Site Agreement, the Declaration of Easements Agreement and a Memorandum of the GT Site Ground Lease to the Title Company for recording.
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| INYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 71 SECTION 7.02. Conditions Precedent to Obliqation of Buyer. The obligation of Buyer to effect the purchase, sale and transfer of the Auctioned Assets contemplated by this Agreement shall be subject to the satisfaction or waiver by Buyer on or prior to Closing of the following additional conditions:
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| (a) Seller shall have performed in all material respects its covenants, agreements and obligations contained in this Agreement which are required to be performed on or prior to Closing; (b) the representations and warranties of Seller which are set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of the date of this Agreement, in which case as of such date);
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| (c) Buyer shall have received a certificate from an authorized officer of Seller, dated the Closing Date, to the effect that, to the best of such officer's knowledge, the conditions set forth in Sections 7.02(a) and (b) have been satisfied; (d) all consents, waivers and approvals required to transfer the Required Contracts, Required Software, Patents (to the extent necessary to operate the Generating Plants and the Gas Turbines in the manner currently operated by Seller) and Transferable Permits to Buyer shall have been obtained on or prior to Closing and all Required Contracts, Required Software, Patents (to the extent necessary to operate the Generating Plants and the Gas Turbines in the manner currently operated by Seller) and Transferable Permits shall have been transferred to Buyer at or prior to
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| .Closing; (e) Buyer shall have received (i) deeds of conveyance substantially in the form of Exhibits A-1 and A-2 (the "Deeds"), (ii) a Foreign Investment in Real Property Tax Act Certification and Affidavit substantially in the form of Exhibit B and (iii) an opinion from John D. McMahon, Esq., General Counsel of Seller and/or other counsel reasonably acceptable to Buyer, dated the Closing Date, substantially in the form set forth in Exhibit C; (f) unless Seller shall have made the election described in Section 9.01(a) (v), Buyer shall have
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| [NYCorp;1173312.1 :4738W:11/14/00-11:45aI
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| 72 received the IRS rulings contemplated to be received by Buyer pursuant to Section 6.07(c);
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| (g) in accordance with Section 6.07(a), Seller shall have transferred all of the assets of the Qualified Decommissioning Fund to Buyer and the aggregate Fair Market Value of the assets of the Decommissioning Funds transferred to Buyer pursuant to Sections 6.07(a) and (b) shall not be less than
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| $430,000,000; (h) the Title Company shall have agreed to issue (as evidenced by binding commitments of the Title Company which shall have been delivered to Buyer) immediately after Closing to Buyer, at Buyer's expense and at standard rates, a current ALTA (1992) Owner's Title Insurance Policy (as filed in New York with the standard New York endorsement) insuring title to the fee and leasehold interests in the Buyer Real Estate to be conveyed/granted to Buyer pursuant to this Agreement in an amount equal to that portion of the Purchase Price properly allocable to such interests, subject only to Permitted Exceptions, and Seller shall have delivered affidavits to the Title Company in substantially the form attached as Exhibit D; (i) (A) Seller shall have replaced the steam generators at Indian Point Unit 2 with the spare steam generators being stored by Seller, (B) Indian Point Unit 2 shall have been restarted and during any single 24-hour period subsequent to such restart Indian Point Unit 2 shall have, as applicable, demonstrated net electrical capacity of (i) 941 megawatts (during the summer period) or (ii) 976 megawatts (during the winter period) and, (C) at Closing, no forced reduction of greater than 5% of such electrical capacity or no outage shall be ongoing at Indian Point Unit 2; (j) Seller shall have obtained a waiver that permits Seller, without first offering such undivided interests to NYPA, to transfer to Buyer the undivided interests of Seller as a tenant in common with NYPA to the following described personal property, fixtures, structures, improvements, or other interests, excepting the fee to the land on which, over which, or under which such interests are erected or located, in each case as more specifically described in the deed dated December 30, 1975, executed by Seller and NYPA, and recorded in the County Clerk's Office of Westchester County, New York, on December 31, 1975 in Liber 7306, page 736 (the "1975 Deed"): (1) that portion of the
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 73 circulating water Discharge Canal lying south of a line parallel to and 135 feet south of the northerly boundary of "PARCEL A" (such term being as defined in the 1975 Deed), delineated on "Map No. 1" (such term being as defined in the 1975 Deed) and designated thereon as "PAC-3"; (2) the outfall gates Control House and power and control conduits serving the Control House and the outfall gates (but omitting such portion of such power and control conduits as are found on the outfall gates and associated structures westerly of the westerly boundary of PARCEL A within lands now or formerly of the New York State Atomic and Space Development Authority or its successor, the New York State Energy Research and Development Authority), and appurtenances thereto, delineated on Map No. 1 and designated thereon as "PAC-4"; (3) the Meteorological Tower, the Meteorological Trailer, forward scatter meter, associated foundations, structures, supports, anchors, and other associated facilities and appurtenances, delineated on Map No.1 and designated thereon as "PAC-8"; and (4) the outfall gates power cables running from PARCEL A underground through "EASEMENT PARCEL 1" (such term being defined in the 1975 Deed) to MCC 1OZ in the Screenwell Structure No. 1 on EASEMENT PARCEL 1 (as delineated and designated on Map No. 1) and associated control wires from PARCEL A underground through EASEMENT PARCEL 1 to Control Building No. 1, such facilities being designated as "CEC-3" on Map No. 1, together with appurtenances; (k) Seller shall have executed and delivered the GT Site Ground Lease; (1) Seller shall have executed and delivered the Continuing Site Agreement; (m) Seller shall have executed and delivered the Declaration of Easements Agreement; (n) Seller shall have executed and delivered the Power Purchase Agreement; (o) Seller shall have entered into an Electric Service Contract regarding the provision and/or delivery of Station-Use Energy as defined in the Continuing Site Agreement; (p) since the date of this Agreement, there shall not have occurred and be continuing a Material Adverse Effect; and
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 74 (q) Seller shall have executed and delivered each of the following:
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| (i) a bill of sale by which title to Auctioned Assets constituting personal property shall be conveyed to Buyer, substantially in the form of Exhibit H (the "Bill of Sale");
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| (ii) a copy, certified by the Secretary of Seller, of resolutions authorizing the execution and delivery of this Agreement and the Ancillary Agreements and instruments attached as exhibits hereto and thereto, and the consummation of the transactions contemplated hereby; (iii) a certificate of the Secretary of Seller certifying the certificate of incorporation and bylaws of Seller and the authority of the officers of Seller executing this Agreement and the Ancillary Agreements; (iv) certificates of title for the vehicles set forth in Schedule 2.02(a) (iii), to the extent such certificates of title are necessary for the transfers of such vehicles; and (v) such other agreements, consents, documents, instruments and writings as are reasonably requested to be delivered by Seller at or prior to Closing pursuant to this Agreement or the Ancillary Agreements, including all such other instruments of sale, transfer, conveyance, assignment or assumption as Buyer may reasonably request in connection with the transactions contemplated hereby.
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| SECTION 7.03. Conditions Precedent to Obligation of Seller. The obligation of Seller to effect the purchase, sale and transfer of the Auctioned Assets contemplated by this Agreement shall be subject to the satisfaction or waiver by Seller on or prior to Closing of the following additional conditions:
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| (a) Buyer shall have performed in all material respects its covenants, agreements and obligations contained in this Agreement which are required to be performed on or prior to Closing; (b) the representations and warranties of Buyer which are set forth in this Agreement shall be true and correct in all material respects as of the date of this
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| [NYCorp;1173312.1:4738W: 11/14/00-11:45aI
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| 75 Agreement and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of the date of this Agreement, in which case as of such date);
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| (c) Seller shall have received a certificate from an authorized officer of Buyer, dated the Closing Date, to the effect that, to the best of such officer's knowledge, the conditions set forth in Sections 7.03(a) and (b) have been satisfied; (d) Seller shall have received an opinion from Joseph L. Blount, Esq., General Counsel of Buyer and Entergy Nuclear, Inc. and/or other counsel reasonably acceptable to Seller, dated the Closing Date, substantially in the form set forth in Exhibit E; (e) unless Buyer shall have made the election described in Section 9.01(b) (iv), Seller shall have received the IRS rulings and the New York State Department of Taxation advisory opinion contemplated to be received by Seller pursuant to Section 6.07(c);
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| (f) Buyer shall have entered into an Electric Service Contract regarding the provision and/or delivery of Station-Use Energy as defined in the Continuing Site Agreement; (g) Guarantor shall have executed and delivered the Guarantee Agreement and Seller shall have received an opinion substantially in the form of Exhibit G dated the Closing Date and from counsel reasonably acceptable to Seller; (h) Buyer shall have executed and delivered the GT Site Ground Lease; (i) Buyer shall have executed and delivered the Continuing Site Agreement; (j) Buyer shall have executed and delivered the Declaration of Easements Agreement; (k) Buyer shall have executed and delivered the Power Purchase Agreement; and (1) Buyer shall have executed and delivered each of the following:
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| (i) a copy, certified by the Secretary of Buyer, of resolutions authorizing the execution (NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 76 and delivery of this Agreement and the Ancillary Agreements and instruments attached as exhibits hereto and thereto, and the consummation of the transactions contemplated hereby; (ii) a certificate of the Secretary of Buyer certifying the certificate of incorporation and bylaws of Buyer and the authority of the officers of Buyer executing this Agreement and the Ancillary Agreements; and (iii) such other agreements, consents, documents, instruments and writings as are reasonably requested to be delivered by Buyer at or prior to Closing pursuant to this Agreement or the Ancillary Agreements, including all such other instruments of sale, transfer, conveyance, assignment or assumption as Seller may reasonably request in connection with the transactions contemplated hereby.
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| ARTICLE VIII Employee Matters SECTION 8.01. Employee Matters. (a) ENO shall offer equivalent employment at the Auctioned Assets to those employees of Seller, regularly assigned by Seller to work at the Auctioned Assets as of Closing in the job titles listed in Schedule 8.01(a) or in the Collective Bargaining Agreement (all such employees described above and those individuals described in the following sentence being hereinafter referred to as "Affected Employees").
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| Notwithstanding the foregoing, the offer of employment to Affected Employees who are officers as of Closing need not be equivalent. Affected Employees shall include each such employee of Seller who is not actively at work due solely to a temporary absence, whether paid or unpaid, in accordance with applicable policies of Seller, including as a result of vacation, holiday, personal time, leave of absence, union leave, sick allowance, military leave, Family or Medical Leave Act leave or jury duty. Affected Employees also include each such former employee of Seller who is reinstated as a result of a legal proceeding arising out of employment with Seller (including any arbitration proceeding) during (i) the Union Transition Period, in the case of an Affected Union Employee and (ii) the Non-Union Transition Period, in the case of an Affected Employee who is not an Affected Union Employee, provided that Seller shall be responsible for any monetary obligations or expense 7
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| jNYCorp;1173312.1:4 38W:11/14/00-11:45a]
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| 77 involved with respect to each such reinstatement, including, without limitation, backpay, damage awards and attorneys' fees. Each Affected Employee who accepts an offer of employment from ENO shall be referred to herein as a "Continued Employee." Continued Employees shall cease to be employees of Seller as of Closing and the period of employment by ENO of the Continued Employees shall begin at Closing. Notwithstanding the immediately preceding sentence, any Affected Employee who, on Closing, is not actively at work and has been absent for a continuous six-month period immediately prior to Closing on account of an illness or injury (a "Special Affected Employee") shall not become a Continued Employee until he or she is able to report to work for ENO. A Special Affected Employee shall remain on Seller's payroll until the earlier of (i) the expiration of his or her Seller's sick allowance and termination from employment by Seller, or (ii) he or she is able to report to work for ENO. Seller shall reimburse Buyer for all wages, compensation, or other benefits paid by ENO to any Continued Employee who was not actively at work on account of an illness or injury as of Closing, and who, on account of such illness or injury does not report to work for ENO before his or her sick allowance benefits expire. As to each such Continued Employee, his or her employment shall terminate on the date immediately after his or her sick allowance benefits expire. Seller's reimbursement shall in no event exceed the compensation and benefits to which each such Continued Employee would have been entitled had he or she continued to be employed by Seller until his or her sick allowance benefits expired. Seller shall be responsible for any obligation to provide employee benefits to Affected Employees prior to Closing.
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| All such offers of employment to Affected Employees will be made (i) in accordance with all applicable Laws and (ii) for employees represented by Utility Workers' Union of America AFL-CIO and its Local Union 1-2 ("Local 1 2"), in accordance with the Local 1-2 Collective Bargaining Agreement (as defined in Section 8.01(b)). ENO may extend offers for employment to Affected Employees beginning four weeks prior to Closing. To the extent ENO continues to employ Continued Non-Union Employees, ENO shall maintain equivalent employment of such employees for a period of not less than twelve months after Closing. At least four weeks prior to Closing and at Closing, Seller shall confirm to ENO that each Affected Employee (prior to Closing) or Continued Employee (at Closing), as applicable, (A) is qualified, licensed, certified or trained in accordance with applicable government requirements or standards to perform the duties and responsibilities of his or her current job assignment and (B) has the appropriate nuclear power plant 7
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| [NYCorp;1173312.1:4 38W:11/14/OO-11:45a]
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| 78 authorization. Subject to the provisions of this Article VIII, ENO retains the right to assign and direct the work of the Continued Non-Union Employees and to conduct its business and operations consistent with its business needs.
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| (b) Schedule 8.01(b) sets forth the 2000-2004 collective bargaining agreement, and amendments thereto, to which Seller is a party in connection with the Auctioned Assets (the "Collective Bargaining Agreement"). Affected Employees who are included in the collective bargaining unit covered by the Collective Bargaining Agreement are referred to herein as "Affected Union Employees". Each Continued Employee who is an Affected Union Employee shall be referred to herein as a "Continued Union Employee". At Closing, ENO will assume the terms and conditions of the Collective Bargaining Agreement, except as set forth in Section 8.02(b) below and negotiated in good faith with Local 1-2, as they relate to Continued Union Employees until the expiration date of the Collective Bargaining Agreement (the "Union Transition Period"). ENO will comply with its legal obligations with respect to collective bargaining under federal labor law for the employees at the Auctioned Assets in the job titles or related work responsibilities of the Affected Union Employees, and ENO will comply with'all applicable obligations thereunder. ENO shall recognize Local 1-2 as the exclusive collective bargaining representative of the employees at the Auctioned Assets in the job titles or related work responsibilities of the Affected Union Employees and Buyer and ENO agree that, should any other business entity (regardless of its relationship to Buyer or ENO) acquire all or a portion of the Auctioned Assets from Buyer prior to the expiration date of the Collective Bargaining Agreement, Buyer and ENO will require such business entity to (i) offer employment to Affected Union Employees employed by ENO at the Auctioned Assets immediately prior to the change in ownership, (ii) recognize Local 1-2 as the exclusive collective bargaining representative of ENO's employees at the Auctioned Assets in the job titles or related work responsibilities of the Affected Union Employees, and (iii) assume the terms and conditions of the Collective Bargaining Agreement as they relate to Affected Union Employees from the date of such acquisition through the expiration date of the Collective Bargaining Agreement.
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| SECTION 8.02. Continuation of Equivalent Benefit Plans/Credited Service. (a) For not less than three years following Closing (the "Non-Union Transition Period"), ENO shall maintain compensation (including base pay and bonus compensation) and employee benefits and employee benefit plans, nonqualified plans and arrangements for each
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| [NYCorp;1173312.1:4738W:11/14/00-1i:45a]
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| 79 Continued Employee who is not a Continued Union Employee (a "Continued Non-Union Employee") which are at least equivalent to those provided to such Continued Non-Union Employee pursuant to Seller's compensation, employee benefits and employee benefit plans, nonqualified plans and arrangements described in Section 8.02 through 8.09, that are in effect as of Closing. Seller's benefits, plans and arrangements listed on Schedule 4.12, but not specifically enumerated in Section 8.02 through 8.09, are referred to as "Seller's 4.12 Benefits". In addition to those benefit plans listed in Section 8.02 through 8.09, ENO shall maintain benefits which, in the aggregate, are equivalent in value to Seller's 4.12 Benefits. ENO may substitute for the Seller's employee stock purchase plan an enhancement to ENO's 401(k) Plans described in Section 8.04 below or an alternative plan or arrangement that is at least of equivalent value to the Seller's stock purchase plan. Such compensation shall be based upon (x) such employee's existing individual base pay, (y) such employee's authorized overtime, if applicable, and (z) the average bonus and benefit component for such employee's salary plan level, as consistently applied by Seller, apportioned according to such employee's base pay.
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| (b) During the Union Transition Period, ENO shall provide to each Continued Union Employee benefits and employee benefit plans and arrangements which are equivalent to those provided under such Collective Bargaining Agreement. Such benefits, plans and arrangements include the following: (i) hospital, medical, dental, vision care and prescription drug benefits (including employee contributions to be made on a pre-tax basis), (ii) health care and dependent care flexible spending accounts; (iii) employer-provided basic group term life and accidental death and dismemberment insurance; (iv) employee-paid group universal life and spousal and dependent child life insurance; (v) sick allowance (short term disability) and long term disability benefits; (vi) business travel accident insurance and crime protection insurance; (vii) occupational accidental death insurance; (viii) adoption benefits and child care and elder care referral benefits; (ix) tuition aid benefits; (x) vacation and holidays; (xi) employee stock purchase plan (including employer matching contributions) or such alternative plan or arrangement negotiated in good faith with Local 1-2; and (xii) defined benefit pension and 401(k) plan benefits. In providing such benefits, ENO shall have the right, subject to any applicable Laws and the Collective Bargaining Agreement, to use different providers from those used by Seller and to establish ENO's own benefit plans or use ENO's existing benefit plans. For purposes hereof, except as provided in Section 8.04(b), ENO shall not
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| [NYCoro;1173312.1:4738W:11/14/00-11:45a]
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| 80 have any obligation to maintain a fund holding or measured by common stock of Seller's parent under any of ENO's plans or arrangements, notwithstanding any such fund maintained by Seller under its plans and arrangements.
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| (c) Continued Employees shall be given credit by ENO for all service with Seller and its Affiliates under all existing or future employee benefit and fringe benefit plans, programs and arrangements of ENO ("Buyer Benefit Plans") in which they become participants and in which prior service is recognized for crediting the amount or value of the benefit. The service credit given by ENO shall be for purposes of eligibility, vesting, eligibility for early retirement and early retirement subsidies, benefit accrual, pre-existing condition limitation, employer contributions, matching contributions, severance allowance and service related level of benefits. ENO shall assume and honor all vacation, sick and personal days accrued and unused by Continued Employees as of Closing in accordance with Seller's applicable policies and arrangements.
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| SECTION 8.03. Pension Plan. (a) Effective as of Closing, ENO shall have in effect defined benefit pension plans ("Buyer's Pension Plans") intended to be (i) qualified pursuant to Section 401(a) of the Code and (ii) nonqualified, in order to provide for benefits which would otherwise be payable under the applicable qualified plan but for the application of Sections 401(a) (17) and 415 of the Code, providing benefits as of Closing identical in all material respects (except for such changes as may be required by Law) to the benefits provided to them under Seller's Pension Plans (as defined below), in particular (x) for Continued Non-Union Employees, such Buyer's Pension Plans to provide benefits identical in all material respects to those benefits provided under Seller's Retirement Plan for Management Employees, or its successor plan, and Seller's Supplemental Retirement Income Plan, and (y) for Continued Union Employees, such Buyer's Pension Plans to provide benefits identical in all material respects to those provided under Seller's Pension and Benefits Plan, or its successor plan (collectively, "Seller's Pension Plans"), in each case, as of Closing. ENO acknowledges and agrees that one such material respect is to count age after termination of employment with ENO for purposes of satisfying requirements in Buyer's Pension Plans for early retirement eligibility and early retirement subsidies.
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| (b) Continued Employees participating in Seller's Pension Plans immediately prior to Closing shall become participants in Buyer's Pension Plans as of Closing.
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| Without limiting the generality of Section 8.02(c),
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aj
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| 81 Continued Employees shall receive credit for all compensation and service with Seller (subject to the terms of Seller's Pension Plans as then in effect) for purposes of eligibility for participation, vesting, eligibility for early retirement and early retirement subsidies and benefit accrual under Buyer's Pension Plans. Seller shall be responsible and shall retain the assets for the Continued Employees' pension benefits accrued up to Closing, and ENO shall be responsible for pension benefits accrued by such Continued Employees after Closing as provided herein. ENO may offset against the accrued benefits determined under Buyer's Pension Plans the accrued benefits determined under Seller's Pension Plans. For the purpose of this Section 8.03(b), "accrued benefit" means the amount that would be paid as a life annuity at normal retirement age irrespective of the date of actual distribution from either Seller's or Buyer's Pension Plans. Seller shall make pension distributions to Continued Employees of the vested portion of their accrued benefits in accordance with the terms of Seller's Pension Plans as in effect from time to time. As soon as reasonably practicable following Closing, Seller shall provide ENO a list showing, as of Closing, the accrued benefit of each Continued Employee under Seller's Pension Plans.
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| (c) In the event that any other business entity (regardless of its relationship to Buyer or ENO) acquires all or a portion of the Auctioned Assets from Buyer at any time during the Non-Union Transition Period in the case of Continued Non-Union Employees and during the Union Transition Period in the case of Continued Union Employees, Buyer and ENO will require such entity to maintain ENO's defined benefit plans, provide the benefits and recognize compensation and service with Seller and ENO to the same extent as ENO is required under Sections 8.03(a) and (b) above.
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| SECTION 8.04. 401(k) Plan. (a) Effective as of Closing, ENO shall have in effect tax-qualified defined contribution plans and trust arrangements thereunder that include a qualified cash or deferred arrangement within the meaning of Section 401(k) of the Code ("Buyer's 401(k)
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| Plans") that will provide benefits that are identical in all material respects (except for such changes as may be required by Law) to those provided by (i) Seller's Thrift Savings Plan for Management Employees, in the case of Continued Non-Union Employees, and (ii) Seller's Retirement Income Savings Plan for Weekly Employees, in the case of Continued Union Employees (such Seller plans herein referred to collectively as "Seller's 401(k) Plans"), in each case, as of Closing. Each Continued Employee participating in fNYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 82 Seller's 401(k) Plans immediately prior to Closing shall become a participant in Buyer's 401(k) Plans as of Closing.
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| Continued Employees shall receive credit for all service with Seller for purposes of eligibility, vesting and employer matching and, if applicable, profit sharing contributions under Buyer's 401(k) Plans.
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| (b) At such time after Closing as Seller is reasonably satisfied that Buyer's 401(k) Plans meet the requirements for qualification under Section 401(a) of the Code, Seller shall cause to be transferred to Buyer's 401(k)
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| Plans in a trust-to-trust transfer in common stock of Seller's parent (as provided in the following sentence) and cash (or other property reasonably acceptable to ENO) an amount equal to the value of the assets held in the accounts of all Continued Employees (including any outstanding loan balances of Continued Employees in Seller's 401(k) Plans),
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| subject to any qualified domestic relations orders. Prior to such transfer, Seller shall make all employer contributions that accrued prior to Closing with respect to the accounts of Continued Employees under Seller's 401(k)
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| Plans. In connection therewith, ENO shall establish an investment fund under Buyer's 401(k) Plans to which shall be transferred the shares of common stock of Seller's parent (or any successor thereto) which, as of the date of transfer, are credited to the accounts of the Continued Employees under Seller's 401(k) Plans. The investment fund(s) available under the Buyer's 401(k) Plans shall offer a broad range of investment alternatives, including at least three diversified investment alternatives, each of the three having materially different risk and return characteristics and containing diversified assets. After Closing and prior to any such transfer, ENO shall cooperate with Seller in the administration of distributions to and loan repayments by Continued Employees. Prior to such transfer of assets, Seller shall vest any unvested benefits of Continued Employees under Seller's 401(k) Plans. Following any such transfer of assets, ENO shall assume all obligations and liabilities of Seller under Seller's 401(k) Plans with respect to such Continued Employees, and Seller shall have no further liability to ENO or any Continued Employee with respect thereto.
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| SECTION 8.05. Welfare Plans. (a) Continued Employees and their dependents who are eligible to participate in Seller's current welfare benefits plans, programs or arrangements shall be eligible to participate in equivalent welfare benefits plans, programs or arrangements maintained or established by ENO ("Buyer's Welfare Plans"),
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| effective as of Closing. Effective as of Closing, any limitations as to pre-existing conditions and actively-at-
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 83 work exclusions and waiting periods under Buyer's Welfare Plans shall be waived by ENO with respect to Continued Employees and their eligible dependents to the extent satisfied under Seller's applicable Welfare Plans. In addition, effective as of Closing, ENO shall cause Buyer's Welfare Plans to recognize any out-of-pocket expenses incurred by Continued Employees and their eligible dependents prior to Closing and during the calendar year in which such Closing occurs for purposes of determining their deductibles and out-of-pocket maximums under Buyer's Welfare Plans. Seller shall retain responsibility under Seller's welfare plans for claims or causes of action relating to expenses incurred by Continued Employees and their eligible dependents prior to Closing. ENO shall have responsibility under Buyer's Welfare Plans for claims or causes of action relating to expenses incurred by Continued Employees and their eligible dependents on and after Closing. Seller expressly agrees to remain responsible for making COBRA continuation coverage available to Affected Employees and Special Affected Employees and their eligible dependents who do not become Continued Employees.
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| (b) Effective as of Closing, ENO shall have in effect health care and dependent care reimbursement account plans for the benefit of each Continued Employee, the terms of which shall (i) be identical in all material respects to the Flexible Reimbursement Account Plans for Management and Weekly Employees of Seller ("Seller's Reimbursement Account Plans") as in effect as of Closing and (ii) give full effect to, and continue in effect, salary reduction elections made under Seller's Reimbursement Account Plans. Prior to Closing, Seller shall cause the accounts of Continued Employees under Seller's Reimbursement Account Plans to be segregated into separate health care, dependent care and transportation reimbursement accounts (the "Seqregated Reimbursement Accounts"), and such Segregated Reimbursement Accounts shall be transferred to and assumed by ENO as of Closing.
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| (c) ENO shall, subject to any applicable Laws, provide a retiree health program identical in all material respects to Seller's retiree health program as in effect as of Closing to each Continued Employee who terminates his employment with ENO during the Non-Union Transition Period, in the case of a Continued Non-Union Employee, and during the Union Transition Period, in the case of a Continued Union Employee, and, in each case, who at the time of such termination of employment satisfies the eligibility requirements for such retiree health program provided by ENO; provided, however, that Seller shall remain liable, pursuant to Seller's retiree health program, for all
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 84 Continued Employees who satisfy, as of Closing, the eligibility requirements then in effect for Seller's retiree health program.
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| SECTION 8.06. Short- and Long-Term Disability.
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| Effective as of Closing, ENO shall have in effect short- and long-term disability plans for the benefit of Continued Employees, the cost of which to Continued Employees shall be the same as under, and the terms of which are identical in all material respects to, Seller's applicable plans as in effect as of Closing. Any waiting periods and pre-existing condition clauses shall be waived under ENO's short- and long-term disability plans with respect to Continued Employees to the extent satisfied under Seller's short- and long-term disability plans.
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| SECTION 8.07. Life Insurance and Accidental Death and Dismemberment Insurance. Effective as of Closing, ENO shall have in effect group term life insurance, group universal life insurance, accidental death and dismemberment insurance, occupational accidental death insurance, business travel accident insurance and crime protection insurance plans for the benefit of Continued Employees, the cost of which to Continued Employees shall be the same as under, and terms of which are identical in all material respects to, Seller's applicable plans that provide such benefits to Continued Employees immediately prior to Closing.
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| SECTION 8.08. Severance. (a) Effective as of Closing, ENO shall have in effect a severance plan ("Buyer's Severance Plan") covering Continued Non-Union Employees that contains terms identical in all material respects to Seller's Severance Pay Plan for Management Employees, as in effect as of Closing ("Seller's Severance Plan"). Continued Non-Union Employees who become officers of ENO, if any, shall participate in the officers' severance plans available to ENO officers. With respect to Affected Employees who are officers of Seller, ENO shall assume all liabilities and obligations, if any, under Seller's Severance Program for Officers of Consolidated Edison, Inc. and its Subsidiaries or any such officer's employment agreement set forth in Schedule 2.02(a) (iv), as applicable, arising from ENO's offers of employment to such officers.
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| (b) ENO shall, subject to any applicable Laws, provide a special separation allowance for any Continued Employee whose employment with ENO is terminated involuntarily by ENO other than for cause during the Non Union Transition Period, in the case of Continued Non-Union Employees, and during the Union Transition Period, in the case of Continued Union Employees. Such allowance shall be INYCorp;1173312.1:4738W: 11/14/00-11 :45a1
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| 85 not less than the sum of four weeks pay plus one week pay for each completed year of service (as determined by aggregating each affected individual's respective service with Seller and ENO) and shall be payable by ENO in a lump sum within 30 days after termination of employment. In addition, in the case of each Continued Non-Union Employee described in the first sentence of this Section 8.08(b), ENO shall pay the Continued Non-Union Employee a lump sum equal to the excess of (i) the actuarial equivalent of the Continued Non-Union Employee's "potential benefit" under the applicable Buyer's Pension Plans, which such Continued Non Union Employee would receive if such Continued Non-Union Employee's employment continued until three years after Closing and such Continued Non-Union Employee's base and incentive compensation for such deemed additional period was the same as in effect on the date of such Continued Non Union Employee's termination of employment with ENO, over (ii) the actuarial equivalent of such Continued Non-Union Employee's "actual benefit" under the applicable Buyer's Pension Plans, as of the date of such Continued Non-Union Employee's termination of employment from ENO. For the purpose of the foregoing sentence, (i) the term "potential benefit" shall refer to the monthly pension that would have been payable to the applicable Continued Non-Union Employee commencing on the first day of the month following the latest of (A) the last day of the deemed additional period, (B) Continued Non-Union Employee's attainment of age 55, or (C) the earlier of (1) the first date as of which the sum of such Continued Non-Union Employee's age and years of service, as taken into account in determining the actuarial reduction for commencement prior to normal retirement age that is to be applied to such Continued Non-Union Employee's accrued benefit under the applicable Buyer's Pension Plans, equals 75 or (2) such Continued Non-Union Employee's attainment of age 65, (ii) the term "actual benefit" shall refer to the monthly pension payable to such Continued Non Union Employee under the applicable Buyer's Pension Plans commencing as of the date determined in accordance with clause (i) of this sentence, and (iii) the actuarial equivalent of the "potential benefit" and the "actual benefit" shall each be a lump sum payable as of the date of such Continued Non-Union Employee's termination of employment from ENO, determined on the basis of the interest rate used to determine the amount of lump sum distributions and, to the extent applicable, other actuarial assumptions then in effect under the applicable Buyer's Pension Plans.
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| ENO shall also provide outplacement services to such terminated Continued Non-Union Employee appropriate to the level of the Continued Non-Union Employee's position and job responsibilities. ENO shall also continue to provide or cause to be provided to any such terminated Continued (NYCorp;1173312.1:4738W:11/14/00-11:45a)
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| 86 Employee health insurance coverage and group term and universal life insurance coverage at the same rates as for active Continued Employees for a period equal to the number of weeks of separation allowance which any such terminated Continued Employee is entitled to from ENO. ENO shall have the right to require a release in a form reasonably satisfactory to ENO as a condition for eligibility to receive such separation allowance. The allowance shall not apply to Continued Employees whose employment is terminated due to death or expiration of sick allowance or other authorized leave of absence or who terminate employment voluntarily. If at any time during the three-year period following Closing, ENO shall assign a Continued Non-Union Employee to work on a regular basis at a location that is more than fifty miles from the location to which such Employee is assigned as of Closing, ENO shall offer such Continued Non-Union Employee the option to terminate employment and receive the severance benefits set forth in this Section 8.08(b) in lieu of the reassignment.
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| SECTION 8.09. Workers Compensation. Effective as of Closing, ENO shall have in effect a workers compensation program for Continued Employees that shall provide coverage identical in all material respects to Seller's workers compensation program as of Closing.
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| ARTICLE IX Indemnification and Dispute Resolution SECTION 9.01. Indemnification. (a) Seller will indemnify and hold harmless Buyer and its Affiliates and their respective directors, officers, employees, agents and representatives (collectively with Buyer and its Affiliates, the "Buyer Indemnitees") from and against any claims or causes of action, demands, or suits by any person, and all losses, liabilities, damages, obligations, payments (including amounts paid in settlement in accordance with this Article IX), judgments, orders, decrees, rulings, liens, charges, costs and expenses (including reasonable legal fees and expenses and including costs and expenses incurred in connection with investigations and settlement proceedings) (each, an "Indemnifiable Loss"), as incurred, asserted against or suffered by any Buyer Indemnitee relating-to, resulting from or arising out of:
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| (i) any breach by Seller of (A) any covenant or agreement of Seller contained in this Agreement (other than covenants or agreements relating to the Power Purchase Agreement) or (B) prior to their expiration in
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 87 accordance with Section 11.03, the representations and warranties contained in Article IV; (ii) the Retained Liabilities (other than Retained Liabilities arising under the Power Purchase Agreement);
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| (iii) noncompliance by Seller with any bulk sales or transfer laws referred to in Section 6.09; (iv) any breach by Seller of any Ancillary Agreement (other than breaches of the Power Purchase Agreement); or (v) if Buyer has failed to receive any of the IRS rulings contemplated to be received by Buyer pursuant to Section 6.07(c) and Seller has elected that the condition set forth in Section 7.02(f) shall not apply, all Taxes, including, for purposes of clause (A),
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| estimated Taxes, (net of any refunds or credits) incurred solely as a result of (A) in the case of the failure to receive an IRS ruling contemplated to be received pursuant to Section 6.07(c) (i) (A), the failure to be entitled to take the positions requested in such ruling on any Tax Return of Buyer or (B) in the case of the failure to receive an IRS ruling contemplated to be received pursuant to Section 6.07(c) (i) (B) or 6.07(c) (i) (C), the failure of the positions requested in such ruling to be sustained following: any proceedings described in Section 9.03(a), the failure of Seller to request a Tax Refund Suit pursuant to Section 9.03(b) or, if Seller does so request, the failure of such Tax Refund Suit, as applicable.
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| (b) Buyer will indemnify and hold harmless Seller and its Affiliates and their respective directors, officers, trustees, employees, agents and representatives (collectively with Seller and its Affiliates, the "Seller Indemnitees") from and against any Indemnifiable Losses, as incurred, asserted against or suffered by any Seller Indemnitee relating to, resulting from or arising out of:
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| (i) any breach by Buyer of (A) any covenant or agreement of Buyer contained in this Agreement (other than covenants or agreements relating to the Power Purchase Agreement) or (B) prior to their expiration in accordance with Section 11.03, the representations and warranties contained in Sections 5.01, 5.02, 5.03 and 5.05; (ii) the Assumed Obligations (other than Assumed
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 88 Obligations arising under the Power Purchase Agreement);
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| (iii) any breach by Buyer of any Ancillary Agreement (other than breaches of the Power Purchase Agreement); or (iv) if Seller has failed to receive any of the IRS rulings or the New York State Department of Taxation advisory opinion contemplated to be received by Seller pursuant to Section 6.07(c) and Buyer has elected that the condition set forth in Section 7.03(e) shall not apply, all Taxes, including, for purposes of clause (A), estimated Taxes (net of any refunds or credits) incurred by the Decommissioning Funds and Seller solely as a result of (A) in the case of the failure to receive an IRS ruling contemplated to be received pursuant to Section 6.07(c) (i) (A), the failure to be entitled to take the positions requested in such ruling on any Tax Return of the Qualified Decommissioning Fund of Seller or (B) in the case of the failure to receive an IRS ruling or an advisory opinion contemplated to be received pursuant to Section 6.07(c) (i) (B), 6.07(c) (i) (C) or 6.07(c) (ii),
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| the failure of the positions requested in such ruling to be sustained following: any proceedings described in Section 9.03(a), the failure of Buyer to request a Tax Refund Suit pursuant to Section 9.03(b) or, if Buyer does so request, the failure of such Tax Refund Suit, as applicable.
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| (c) The amount of any Indemnifiable Loss shall be reduced to the extent that the relevant Buyer Indemnitee or Seller Indemnitee (each, an "Indemnitee") receives any insurance proceeds with respect to an Indemnifiable Loss and shall be (i) increased to take account of any Tax Cost incurred by the Indemnitee arising from the receipt of indemnity payments hereunder (grossed up for such increase) and (ii) reduced to take account of any Tax Benefit realized by the Indemnitee arising from the incurrence or payment of any such Indemnifiable Loss. If the amount of any Indemnifiable Loss, at any time subsequent to the making of an indemnity payment in respect thereof, is reduced by recovery, settlement or otherwise under or pursuant to any insurance coverage, or pursuant to any claim or cause of action, recovery, settlement or payment by or against any other person, the amount of such reduction, less any costs, expenses or premiums incurred in connection therewith, will promptly be repaid by the Indemnitee to the Party required to provide indemnification hereunder (the "Indemnifying Party") with respect to such Indemnifiable Loss.
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| [NYCorp;1173312.1:4738W:11/14/OO-11:45aI
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| 89 (d) No claim may be made against Seller for indemnification with respect to breaches of representations and warranties pursuant to Section 9.01(a) (i) (B) unless and until the aggregate amount of Indemnifiable Losses incurred by the Buyer Indemnitees thereunder exceeds $1,000,000 at which point all claims (including those previously barred by such threshold) may be made against Seller. Notwithstanding the foregoing, the maximum amount recoverable for all claims under Section 9.01(a) (i) (B) shall be $17,000,000 (other than claims based upon fraud). No claim may be made against Buyer for indemnification with respect to breaches of representations and warranties pursuant to Section 9.01(b) (i) (B) unless and until the aggregate amount of Indemnifiable Losses incurred by the Seller Indemnitees thereunder exceeds $1,000,000 at which point all claims (including those previously barred by such threshold) may be made against Seller. Notwithstanding the foregoing, the maximum amount recoverable for all claims under Section 9.01(b) (i) (B) shall be $17,000,000 (other than claims based upon fraud).
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| (e) No Indemnifying Party shall have any liability to any Indemnitee under Section 9.01(a) (i) (B) or 9.01(b) (i) (B), as applicable after Closing, for any breach of a representation or warranty to the extent that such claim for indemnification is based upon facts of which any such Indemnitee had Knowledge prior to Closing, unless such Indemnitee provided written notice to such Indemnifying Party of the existence of such facts promptly after receiving Knowledge thereof and such Indemnifying Party thereafter failed to cure such breach within a reasonable period of time prior to Closing.
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| (f) To the fullest extent permitted by Law, neither Party nor any Buyer Indemnitee or any Seller Indemnitee shall be liable to the other Party or any other Buyer Indemnitee or Seller Indemnitee for any claims or causes of action, demands or suits for consequential, incidental, special, exemplary, punitive, indirect or multiple damages connected with or resulting from any breach of this Agreement or the Ancillary Agreements (other than breach of this Article IX), or any actions undertaken in connection with or related hereto or thereto, including any such damages which are based upon breach of contract, tort (including negligence and misrepresentation), breach of warranty, strict liability, statute, operation of law or any other theory of recovery.
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| (g) The rights and remedies of Seller and Buyer under this Article IX are, solely as between Seller and Buyer, exclusive and in lieu of any other rights and INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 90 remedies which Seller and Buyer may have under this Agreement, the Ancillary Agreements (except as expressly provided in any such Ancillary Agreement) or otherwise for monetary relief with respect to (i) any breach of, or failure to perform, any covenant or agreement set forth in this Agreement or the Ancillary Agreements by Seller or Buyer, (ii) any breach of any representation or warranty by Seller or Buyer, (iii) the Assumed Obligations or the Retained Liabilities and (iv) noncompliance by Seller with any bulk sales or transfer laws. Each Party agrees that the previous sentence shall not limit or otherwise affect any non-monetary right or remedy which either Party may have under this Agreement or the Ancillary Agreements or otherwise limit or affect either Party's right to seek equitable relief, including the remedy of specific performance.
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| (h) Except with respect to breaches of representations and warranties pursuant to Sections 9.01(a) (i) (B) and 9.01(b) (i) (B) which are governed exclusively by Section 9.01(d), Buyer and Seller agree that, notwithstanding Section 9.01(g), each Party shall retain, subject to the other provisions of this Agreement, including Sections 9.01(f) and 11.03, all remedies at law or in equity with respect to (i) fraud or wilful or intentional breaches of this Agreement or the Ancillary Agreements and (ii) gross negligence or wilful or wanton acts or omissions to act of any Indemnitee (or any contractor or subcontractor thereof) on or after Closing.
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| SECTION 9.02. Third Party Claims Procedures.
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| (a) If any Indemnitee receives notice of the assertion of any claim or cause of action or of the commencement of any claim, cause of action, or proceeding made or brought by any person who is not a Party or an Affiliate of a Party (a "Third Party Claim") with respect to which indemnification is to be sought from an Indemnifying Party, the Indemnitee will give such Indemnifying Party reasonably prompt written notice thereof, but in any event not later than 20 Business Days after the Indemnitee's receipt of notice of such Third Party Claim; provided, however, that a failure to give timely notice will not affect the rights or obligations of any Indemnitee except if, and only to the extent that, as a result of such failure, the Indemnifying Party was actually prejudiced. Such notice shall describe the nature of the Third Party Claim in reasonable detail and will indicate the estimated amount, if practicable, of the Indemnifiable Loss that has been or may be sustained by the Indemnitee.
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| (b) If a Third Party Claim is made against an Indemnitee, the Indemnifying Party will be entitled to
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| {NYCorp;1173312.1:4738W: 11/14/00-11:45aJ
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| 91 participate in the defense thereof and, if it so chooses, to assume the defense thereof with counsel selected by the Indemnifying Party; provided, however, that such counsel is not reasonably objected to by the Indemnitee; and provided further that the Indemnifying Party first admits in writing its liability to the Indemnitee with respect to all material elements of such claim. Should the Indemnifying Party so elect to assume the defense of a Third Party Claim, the Indemnifying Party will not be liable to the Indemnitee for any legal expenses subsequently incurred by the Indemnitee in connection with the defense thereof. If the Indemnifying Party so elects to assume the defense of a Third Party Claim, the Indemnitee will (i) cooperate in all reasonable respects with the Indemnifying Party in connection with such defense, (ii) not admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim without the Indemnifying Party's prior written consent and (iii) agree to any settlement, compromise or discharge of a Third Party Claim which the Indemnifying Party may recommend and which by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third Party Claim and releases the Indemnitee completely in connection with such Third Party Claim. In the event the Indemnifying Party shall so assume the defense of any Third Party Claim, the Indemnitee shall be entitled to participate in (but not control) such defense with its own counsel at its own expense. If the Indemnifying Party does not assume the defense of any such Third Party Claim, the Indemnitee may defend the same in such manner as it may deem appropri ate, including settling such claim or litigation after giving notice to the Indemnifying Party of the terms of the proposed settlement and the Indemnifying Party will promptly reimburse the Indemnitee upon written request. Anything contained in this Agreement to the contrary notwithstanding, no Indemnifying Party shall be entitled to assume the defense of any Third Party Claim if such Third Party Claim seeks an order, injunction or other equitable relief or relief for other than monetary damages against the Indem nitee which, if successful, would materially adversely affect the business of the Indemnitee; provided, however, that such Indemnifying Party shall continue to be obligated to such Indemnitee pursuant to Section 9.01(a) or (b), as the case may be, for all Indemnifiable Losses relating to, resulting from or arising out of such Third Party Claim.
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| SECTION 9.03. Procedures Relating to Tax Indemnity. (a) If (i) Buyer (Seller) has failed to receive any of the IRS rulings (or the advisory opinion) contemplated to be received by Buyer (Seller) pursuant to Section 6.07(c) (other than the rulings contemplated to be received pursuant to Section 6.07(c) (i) (A)) and Seller
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| [NYCorp;1173312.1:4738W: 11/14/00- 11:45aI
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| 92 (Buyer) has elected that the condition set forth in Section 7.02(f) (Section 7.03(e)) shall not apply, (ii) Buyer (Seller) has filed its Tax Returns taking positions as though Buyer (Seller) actually received such IRS rulings (or the advisory opinion) and (iii) a claim shall be made by any taxing authority which, if successful, might result in an indemnity payment pursuant to Section 9.01(a) (v) (B)
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| (Section 9.01(b) (iv) (B)), the Indemnitee shall promptly notify the Indemnifying Party in writing of such claim (a "Tax Claim") and shall keep the Indemnifying Party reasonably informed of all proceedings taken pursuant to this Section 9.03(a) in connection with such Tax Claim. At the reasonable request of the Indemnifying Party, the Indemnitee shall contest such Tax Claim; provided, however, that the Indemnitee shall control all proceedings taken in connection with contesting such Tax Claim; and provided further that the Indemnitee shall not settle such Tax Claim without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld.
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| (b) If (i) Buyer (Seller) has failed to receive any of the IRS rulings (or the advisory opinion) contemplated to be received by Buyer (Seller) pursuant to Section 6.07(c)
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| (other than the rulings contemplated to be received pursuant to Section 6.07(c) (i) (A)) and Seller (Buyer) has elected that the condition set forth in Section 7.02(f) (Section 7.03(e)) shall not apply and (ii) Buyer (Seller) has filed its Tax Returns taking positions different from those Buyer (Seller) requested in such IRS rulings (or the advisory opinion), the Indemnitee shall, at the reasonable request of the Indemnifying Party, sue for a refund (a "Tax Refund Suit") of any Taxes incurred solely as a result of the positions taken by the Indemnitee on its Tax Returns being different from the positions requested in such IRS rulings; provided, however, that the Indemnitee shall control all proceedings taken in connection with such Tax Refund Suit; and provided, further, that the Indemnitee shall not settle such Tax Refund Suit without the consent of the Indemnifying Party, which consent shall not be unreasonably withheld.
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| (c) If an indemnity payment has been made pursuant to Section 9.01(a) (v) (A) or 9.01(b) (iv) (A), the Indemnitee shall, at the request and sole expense of the Indemnifying Party, sue for a refund of the Taxes that gave rise to such indemnity payment (a "Tax Contest"). The Indemnifying Party shall control all proceedings taken in connection with such Tax Contest; provided, however, that the Indemnifying Party shall keep the Indemnitee reasonably informed of all proceedings taken in connection with such Tax Contest. The Indemnitee shall cooperate with the Indemnifying Party (at the Indemnifying Party's expense) in such Tax Contest, which
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| [NYCorp;l173312.1:4738W:11/14/00-11:45a]
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| 93 cooperation shall include, without limitation, the retention and (upon the Indemnifying Party's request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such Tax Contest, and making employees available on a mutually convenient basis to provide additional information or explanation of any material provided hereunder or to testify at proceedings relating to such Tax Contest.
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| ARTICLE X Termination SECTION 10.01. Termination. (a) This Agreement may be terminated at any time prior to Closing by an instrument in writing signed on behalf of each of the Parties.
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| (b) This Agreement may be terminated by Seller or Buyer if Closing shall not have occurred on or before the date that is 15 months from the date of this Agreement (the "Termination Date"); provided, however, that the right to terminate this Agreement pursuant to this Section 10.01(b) shall not be available to any Party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of Closing to occur on or before such date.
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| (c) This Agreement may be terminated by either Seller or Buyer if any Restraint having any of the effects set forth in Section 7.01(b) shall be in effect and shall have become final and nonappealable; provided, however, that the Party seeking to terminate this Agreement pursuant to this Section 10.01(c) shall have used its reasonable best efforts to prevent the entry of and to remove such Restraint.
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| (d) This Agreement may be terminated by Buyer prior to Closing if there has been a material violation or breach by Seller of any covenant, representation or warranty of Seller contained in this Agreement which has rendered the satisfaction of any conditions to the obligations of Buyer under this Agreement impossible or has resulted in a Material Adverse Effect, and such violation or breach has not been cured by Seller within 30 days after receipt by Seller of written notice from Buyer specifying in reasonable detail such violation or breach; provided, however, that Buyer shall not have the right to terminate pursuant to this Section 10.01(d) if (i) such violation or breach is not reasonably capable of being cured by Seller within such 30-
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| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 94 day period but is reasonably capable of being cured by Seller within a reasonable additional period and Seller, within such 30-day period, shall have commenced good faith efforts to cure such violation or breach and shall have diligently continued such good faith efforts during such reasonable additional period, which additional period shall in no event extend beyond the Termination Date, or (ii) such violation or breach shall have been waived in writing by Buyer.
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| (e) This Agreement may be terminated by Seller prior to Closing if there has been a material violation or breach by Buyer of any covenant, representation or warranty of Buyer contained in this Agreement which has rendered the satisfaction of any conditions to the obligations of Seller under this Agreement impossible and such violation or breach has not been cured by Buyer within 30 days after receipt by Buyer of written notice from Seller specifying in reasonable detail such violation or breach; provided, however, that Seller shall not have the right to terminate pursuant to this Section 10.01(e) if (i) such violation or breach is not reasonably capable of being cured by Buyer within such 30 day period but is reasonably capable of being cured by Buyer within a reasonable additional period and Buyer, within such 30-day period, shall have commenced good faith efforts to cure such violation or breach and shall have diligently continued such good faith efforts during such reasonable additional period, which additional period shall in no event extend beyond the Termination Date, or (ii) such violation or breach shall have been waived by Seller.
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| (f) This Agreement may be terminated by Buyer by giving written notice to Seller any time prior to Closing if any Buyer Required Regulatory Approvals or Seller Required Regulatory Approvals, the receipt of which is a condition to the obligation of Buyer to consummate Closing as set forth in Section 7.01(a), shall have been finally denied (and a petition for rehearing or refiling of an application initially denied without prejudice shall also have been denied) or, in the case of Buyer Required Regulatory Approvals, a Final Order shall have been granted but such Final Order is not reasonably acceptable to Buyer in accordance with Section 7.01(a).
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| (g) This Agreement may be terminated by Seller by giving written notice to Buyer any time prior to Closing if any Seller Required Regulatory Approvals or Buyer Required Regulatory Approvals, the receipt of which is a condition to the obligation of Seller to consummate Closing as set forth in Section 7.01(a), shall have been finally denied (and a petition for rehearing or refiling of an application tNYCorp;1173312.1:4738W:11/14/00-11:45aj
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| 95 initially denied without prejudice shall also have been denied) or, in the case of Seller Required Regulatory Approvals, a Final Order shall have been granted but such Final Order is not reasonably acceptable to Seller in accordance with Section 7.01(a).
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| ARTICLE XI Miscellaneous Provisions SECTION 11.01. Expenses. Except to the extent specifically provided herein, all costs and expenses incurred in connection with this Agreement and the trans actions contemplated hereby shall be borne by the Party incurring such costs and expenses, whether or not the transactions contemplated hereby are consummated.
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| SECTION 11.02. Amendment and Modification; Extension; Waiver. This Agreement may be amended, modified or supplemented only by an instrument in writing signed on behalf of each of the Parties. Any agreement on the part of a Party to any extension or waiver in respect of this Agreement shall be valid only if set forth in an instrument in writing signed on behalf of such Party. The failure of a Party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
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| SECTION 11.03. Survival of Representations or Warranties. The representations and warranties contained in Article IV (other than the first sentence of Section 4.11) and Article V (other than Section 5.04) survive for 6 months from the Closing Date and each and every other representation and warranty contained in this Agreement shall expire with, and be terminated and extinguished by Closing and no such representation or warranty shall survive Closing. From and after Closing, none of Seller, Buyer or any officer, director, trustee or Affiliate of any of them shall have any liability whatsoever with respect to any such representation or warranty that does not survive Closing.
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| The expiration of the representations and warranties contained in Article IV (other than the first sentence of Section 4.11) and Article V (other than Section 5.04) shall not affect the Parties' obligations under Article IX if the Indemnitee provided the Indemnifying Party with proper notice of the claim or event for which indemnification is sought prior to such expiration.
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| SECTION 11.04. Notices. All notices and other communications hereunder shall be in writing and shall be
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| [NYCorp;1173312.1: 4738W: 11/14/00-11: 45a]
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| 96 deemed given (as of the time of delivery or, in the case of a telecopied communication, of confirmation) if delivered personally, telecopied (which is confirmed) or sent by overnight courier (providing proof of delivery) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
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| if to Seller, to:
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| Consolidated Edison Company of New York, Inc.
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| 4 Irving Place New York, NY 10003 Telecopy No.: (212) 677-0601 Attention: General Counsel with a copy on or prior to the Closing Date to:
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| Cravath, Swaine & Moore 825 Eighth Avenue New York, NY 10019 Telecopy No.: (212) 474-3700 Attention: George W. Bilicic, Jr., Esq.
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| if to Buyer, to:
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| Entergy Nuclear Indian Point 2, LLC 440 Hamilton Avenue White Plains, NY 10601 Telecopy No.: (914) 272-3406 Attention: Chief Operating Officer with a copy on or prior to the Closing Date to:
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| c/o Entergy Nuclear, Inc.
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| P.O. Box 31995 Jackson, MS 39286-1995 Telecopy No.: (601) 368-5694 Attention: Assistant Secretary SECTION 11.05. Assignment; No Third Party Beneficiaries. (a) This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party, including by operation of law, without the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed. Notwithstanding the foregoing but subject to all legal requirements, (i) Seller may assign or pledge its rights (A) to an Affiliate of Seller or a third party in connection with the transfer of
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 97 the Transmission System to such Affiliate or third party or (B) to a lending institution or trustee in connection with a pledge or granting of a security interest in all or any part of the Transmission System and/or this Agreement and (ii)
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| Buyer may assign or pledge its rights (A) to an Affiliate of Buyer or (B) to a lending institution or trustee in connection with a pledge or granting of a security interest in the Auctioned Assets and/or this Agreement; provided, however, that (i) with respect to an assignment or transfer of rights or obligations by Seller, no such assignment or transfer shall relieve Seller from the full liabilities and the full financial responsibility, as provided for under this Agreement, unless and until the transferee or assignee shall agree in writing to assume such obligations and duties and Buyer has consented in writing to such assumption, and (ii) with respect to an assignment or transfer of rights or obligations by Buyer, no such assignment or transfer (A) may be consummated unless the assignee or transferee expressly agrees in writing and in a form satisfactory to Seller to be jointly and severally liable with Buyer for all of the liabilities and obligations of Buyer under this Agreement and (B) shall relieve Buyer from the full liabilities and the full financial responsibility as provided for under this Agreement; provided, that, in the event of a subsequent transfer pursuant to this clause (ii), if such subsequent transferee shall agree to be jointly and severally liable with Buyer for all of the liabilities and obligations of Buyer under this Agreement, then the prior transferee shall be relieved of its liability upon such transfer. Any assignment in contravention of this Section 11.05 shall be null and void and without legal effect.
| |
| (b) Nothing in this Agreement is intended to confer upon any other person except the Parties any rights or remedies hereunder or shall create any third party beneficiary rights in any person, including, with respect to continued or resumed employment, any employee or former employee of Seller (including any beneficiary or dependent thereof). No provision of this Agreement shall create any rights in any such persons in respect of any benefits that may be provided, directly or indirectly, under any employee benefit plan or arrangement.
| |
| (c) Buyer may request (i) upon not less than 30 days' prior written notice to Seller, that Seller transfer the Buyer Real Estate and personal property constituting the Toddville Training Center and (ii) upon not less than 90 days' prior written notice to Seller, that Seller assign the lease and personal property relating to 1 Park Place, Peekskill, New York set forth in Schedule 4.06 to an Affiliate of Buyer at Closing. Seller shall not INYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| 98 unreasonably deny such requests; provided, that (i) no such transfer shall be made unless the transferee expressly agrees in writing and in a form satisfactory to Seller to be jointly and severally liable with Buyer for all of the liabilities and obligations arising from or relating primarily to the use, ownership, lease, operation, maintenance or control of such Auctioned Assets and (ii) no such transfer shall relieve Buyer from any liabilities or obligations provided for under this Agreement.
| |
| SECTION 11.06. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable principles of conflicts of law).
| |
| SECTION 11.07. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
| |
| SECTION 11.08. Interpretation. When a reference is made in this Agreement to an Article, Section, Schedule or Exhibit, such reference shall be to an Article or Section of, or Schedule or Exhibit to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words "include", "includes" or "including" are used in this Agreement, they shall be deemed to be followed by the words "without limitation" or equivalent words. The words "hereof", "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in the Ancillary Agreements and any certificate or other document made or delivered pursuant hereto or thereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or Law defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or Law as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of Laws) by succession of comparable Laws and references to all attachments thereto and instruments incorporated therein. References to a person are also to
| |
| [NYCorp;1173312.1:4738W :11/14/00-11:45a)
| |
| | |
| 99 its permitted successors and assigns.
| |
| SECTION 11.09. Jurisdiction and Enforcement.
| |
| (a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of the State of New York, New York County and (ii) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. Each of the Parties agrees to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or, if such suit, action or proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County.
| |
| Each of the Parties further agrees that service of process, summons, notice or document by hand delivery or U.S.
| |
| registered mail at the address specified for such Party in Section 11.04 (or such other address specified by such Party from time to time pursuant to Section 11.04) shall be effective service of process for any action, suit or proceeding brought against such Party in any such court.
| |
| Each of the Parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
| |
| (b) The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement or any Ancillary Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement or any Ancillary Agreement and to enforce specifically the terms and provisions of this Agreement or any Ancillary Agreement, this being in addition to any other remedy to which they are entitled at law or in equity.
| |
| SECTION 11.10. Entire Agreement. This Agreement, the Confidentiality Agreement and the Ancillary Agreements including the Exhibits, Schedules, documents, certificates and instruments referred to herein or therein and other contracts, agreements and instruments contemplated hereby or
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45a3
| |
| | |
| 100 thereby, embody the entire agreement and understanding of the Parties in respect of the transactions contemplated by this Agreement. There are no restrictions, promises, representations, warranties, covenants or undertakings other than those expressly set forth or referred to herein or therein. This Agreement and the Ancillary Agreements supersede all prior agreements and understandings between the Parties with respect to the transactions contemplated by this Agreement other than the Confidentiality Agreement.
| |
| SECTION 11.11. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
| |
| SECTION 11.12. Conflicts. Except as expressly otherwise provided herein or therein, in the event of any conflict or inconsistency between the terms of this Agreement and the terms of any Ancillary Agreement, the terms of this Agreement shall prevail.
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45aJ
| |
| | |
| 101 IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written.
| |
| CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
| |
| by
| |
| /s/ Kevin Burke Name: Kevin Burke
| |
| | |
| ==Title:==
| |
| President ENTERGY NUCLEAR INDIAN POINT 2, LLC, by
| |
| /s/ Michael R. Kansler Name: Michael R. Kansler
| |
| | |
| ==Title:==
| |
| Senior Vice President and Chief Operating Officer PROVISIONS OF ARTICLE VIII ACCEPTED AND AGREED TO BY COUNTERSIGNING BELOW:
| |
| ENTERGY NUCLEAR OPERATIONS, INC.,
| |
| by
| |
| /s/ Michael R. Kansler Name: Michael R. Kansler
| |
| | |
| ==Title:==
| |
| Senior Vice President and Chief Operating Officer (NYCorp;1173312.1:4738w:11/14/00-11:45a]
| |
| | |
| 12/12/00 TUE 13:46 FAX 12128138973 GOODWIN,PROCTER & HOAR o003 IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written.
| |
| CONSOLIDATED EDISON COMPANY OF NEW YORK, INC-,
| |
| by Name:
| |
| | |
| ==Title:==
| |
| seniorjliýe President and Chief Operating Officer PROVISIONS OF ARTICLE VIII ACCEPTED AND AGREED TO flY COUNTERSIGNING BELOW:
| |
| !e President Operating Officer
| |
| [ryC~orp;ll70591.1:473BW:1./09/00-0I S2a]
| |
| | |
| 12/12/00 TUE 13:46 FAX 12128138973 G00DWIN,PROCTER & HOAR IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written.
| |
| CONSOLIDATED F[ ISON CO04PANY OF 21 NEW YORK, NC Name: Kevin Burke Title : President ENTERGY NUCLEAR INDIAN POINT 2, LLC, by Name:
| |
| | |
| ==Title:==
| |
| PROVISIONS OF ARTICLE VIII ACCEPTED AND AGREED TO BY COUNTERSIGNING BELOW:
| |
| ENTERGY NUCLEAR OPERATIONS, INC.,
| |
| by Name:
| |
| | |
| ==Title:==
| |
| [NyCorp;1170S91.1;473$W:11/09/00-1 34a]
| |
| | |
| EXHIBITS TO GENERATING PLANT AND GAS TURBINE ASSET PURCHASE AND SALE AGREEMENT FOR INDIAN POINT GENERATING STATION UNITS 1 AND 2 AND GAS TURBINE UNITS 1, 2 AND 3 AND TODDVILLE TRAINING CENTER, LOCATED AT VILLAGE OF BUCHANAN, WESTCHESTER COUNTY, NEW YORK INYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| EXHIBIT A-I FORM OF DEED OF CONVEYANCE FOR WESTCHESTER COUNTY
| |
| [LAND AND IMPROVEMENTS]
| |
| THIS INDENTURE, made the
| |
| * day of , two thousand BETWEEN Consolidated Edison Company of New York, Inc., a New York corporation, having a principal place of business at No. 4 Irving Place, New York, NY 10003 party of the first part, and
| |
| , a , having a principal place of business at party of the second part, WITNESSETH, that the party of the first part, in consideration of ten dollars and other valuable consideration paid by the party of the second part, does hereby grant and release unto the party of the second part, the heirs or successors and assigns of the party of the second part forever, ALL those certain plots, pieces or parcels of land and land under water, with the buildings and improvements thereon erected, situate, lying and being in the Village of Buchanan and/or the Town of Cortlandt in the County of Westchester and State of New York and more particularly described on Schedule A attached hereto and made a part hereof ("said premises").
| |
| Said premises are subject to all covenants, conditions, easements, agreements and restrictions of record including, but not limited to, provisions of letters patent and water grants, zoning and building regulations, and any state of facts that an accurate survey and personal inspection may reveal.
| |
| TOGETHER with, and SUBJECT to, all covenants, conditions, easements, agreements, restrictions and other interests granted, reserved and/or imposed in that certain Indenture made as of the 30th day of December, 1975 by Consolidated Edison Company of New York Inc. to Power Authority of the State of New York (the "PASNY Deed")
| |
| recorded in Liber 7306, Page 736 in the Westchester County Clerk's Office (the "Clerk's Office") on December 31, 1975
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| 2 and/or shown on Map Numbers 18702 and 18703 on file in the Clerk's Office (the "PASNY Maps"), including without limitation, the pre-emptive rights to purchase certain undivided or tenancy in common interests and the waiver of partition or sale for division with respect to such undivided interests set forth on pages 28 and 29 of the PASNY Deed, but EXCLUDING the 345KV transmission line easement described in paragraph 1 on page 7 of the PASNY Deed and delineated and designated "CE-4" on the PASNY Maps, TOGETHER with, and SUBJECT to, all of the grants, rights, reservations and obligations more particularly described in the Declaration of Easements Agreement dated of even date herewith between the party of the first part and the party of the second part, which shall be recorded herewith and being and intended to be part of this conveyance of said premises, and in particular to the retention by the party of the first part of title to the "Seller Facilities", as such term is defined therein, TOGETHER with all right, title and interest, if any, of the party of the first part in and to any streets and roads abutting the above described premises to the center lines thereof; TOGETHER with the appurtenances and all the estate and rights of the party of the first part in and to said premises; TO HAVE AND TO HOLD the premises herein granted unto the party of the second part, the heirs or successors and assigns of the party of the second part forever.
| |
| This conveyance is made in the ordinary course of business and does not constitute all of the assets of the party of the first part.
| |
| AND the party of the first part, in compliance with Section 13 of the Lien Law, covenants that the party of the first part will receive the consideration for this conveyance and will hold the right to receive such consideration as a trust fund to be applied first for the purpose of paying the cost of the improvements and will apply the same first to the payment of the cost of the improvements before using any part of the total of the same for any other purpose.
| |
| The word "party" shall be construed as if it read "parties" whenever the sense of this indenture so requires.
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
| |
| | |
| 3 IN WITNESS WHEREOF, the party of the first part has duly executed this deed the day and year first above written.
| |
| (Corporate Seal)
| |
| ATTEST: CONSOLIDATED EDISON COMPANY OF Secretary NEW YORK, INC.
| |
| (Corporate Seal)
| |
| ATTEST:
| |
| Secretary (NYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| SCHEDULE A Description of Land
| |
| [From Schedule 2.02(a) (i) (A) and Schedule 2.02(a) (i) (C)]
| |
| [NYCorp;1173312.1:4738W:11/14/OO-11:45aJ
| |
| | |
| EXHIBIT A-2 FORM OF DEED OF CONVEYANCE FOR WESTCHESTER COUNTY
| |
| [IMPROVEMENTS ON GT SITE]
| |
| THIS INDENTURE, made the
| |
| * day of ', two thousand BETWEEN Consolidated Edison Company of New York, Inc., a New York corporation, having a principal place of business at No. 4 Irving Place, New York, NY 10003 party of the first part, and
| |
| , a , having a principal place of business at party of the second part, WITNESSETH, that the party of the first part, in consideration of ten dollars and other valuable consideration paid by the party of the second part, does hereby grant and release unto the party of the second part, the heirs or successors and assigns of the party of the second part forever, ALL buildings and improvements ("said improvements") erected on those certain plots, pieces or parcels of land situate, lying and being in the Village of Buchanan, Town of Cortlandt, County of Westchester and State of New York and more particularly described on Schedule A attached hereto and made a part hereof, EXCEPTING THEREFROM the land on which said improvements stand.
| |
| Said improvements are subject to all covenants, conditions, easements, agreements and restrictions of record including, but not limited to, provisions of letters patent and water grants, zoning and building regulations, and any state of facts that an accurate survey and personal inspection may reveal.
| |
| TOGETHER with, and SUBJECT to, all of the grants, rights, reservations and obligations more particularly described in the Declarations of Easements Agreement and the GT Site Ground Lease, both dated of even date herewith, between the party of the first part and the party of the second part, both of which shall be recorded herewith, and in particular to the retention by the party of the first part of title to the "Seller Facilities", as such term is defined in the Declaration of Easements Agreement
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| 2 TOGETHER with all the estate and rights of the party of the first part in and to said improvements; TO HAVE AND TO HOLD the improvements herein granted unto the party of the second part, the heirs or successors and assigns of the party of the second part forever.
| |
| This conveyance is made in the ordinary course of business and does not constitute all of the assets of the party of the first part.
| |
| AND the party of the first part, in compliance with Section 13 of the Lien Law, covenants that the party of the first part will receive the consideration for this conveyance and will hold the right to receive such consideration as a trust fund to be applied first for the purpose of paying the cost of the improvements and will apply the same first to the payment of the cost of the improvements before using any part of the total of the same for any other purpose.
| |
| The word "party" shall be construed as if it read "parties" whenever the sense of this indenture so requires.
| |
| IN WITNESS WHEREOF, the party of the first part has duly executed this deed the day and year first above written.
| |
| (Corporate Seal)
| |
| ATTEST: CONSOLIDATED EDISON COMPANY OF Secretary NEW YORK, INC.
| |
| (Corporate Seal) S ATTEST:
| |
| Secretary
| |
| * S
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
| |
| | |
| SCHEDULE A Description of Land
| |
| [From Schedule 2.02(a) (i) (B)]
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
| |
| | |
| EXHIBIT A-3 FORM OF GT SITE GROUND LEASE
| |
| [provided separately]
| |
| [NYCorp;1173312.1:4738W: 11/14/00- 11:45aI
| |
| | |
| EXHIBIT A-4 FORM OF DECLARATION OF EASEMENTS AGREEMENT
| |
| [provided separately]
| |
| [NYCorp;1173312.1:4738W: 11/14/00- 11:45aJ
| |
| | |
| EXHIBIT B CERTIFICATION OF NON-FOREIGN STATUS Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), provides that a transferee of a U.S. real property interest must withhold Tax if the transferor is a foreign person. To inform Entergy Nuclear Indian Point 2, LLC ("Buyer"), that a withholding of Tax is not required upon the disposition of a U.S. real property interest by Consolidated Edison Company of New York, Inc., a New York corporation ("Seller"), the undersigned hereby certifies the following on behalf of Seller:
| |
| : 1. Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Code and Income Tax Regulations);
| |
| : 2. Seller's employer identification number is 13-5009340;
| |
| : 3. Seller's office address is 4 Irving Place, New York, NY 10003.
| |
| Seller and the undersigned understand that this certificate may be disclosed to the Internal Revenue Service by Buyer and that any false statement contained herein could be punished by fine, imprisonment or both.
| |
| Under penalty of perjury, I declare that I have examined this certificate and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Seller.
| |
| Date: [ ], 2001 By:
| |
| Name:
| |
| | |
| ==Title:==
| |
| [NYCorp;1173312. :4738W:11/14/00-11:45a]
| |
| | |
| EXHIBIT C FORM OF OPINION OF GENERAL COUNSEL OF SELLER
| |
| ], 2001 Entergy Nuclear Indian Point 2, LLC 440 Hamilton Avenue White Plains, NY 10601 Consolidated Edison Company of New York, Inc.
| |
| Generating Plant and Gas Turbine Asset Purchase and Sale Agreement Ladies and Gentlemen:
| |
| I am General Counsel of Consolidated Edison Company of New York, Inc., a New York corporation ("Seller"), and have acted for Seller in connection with the Generating Plant and Gas Turbine Asset Purchase and Sale Agreement (the "Asset Purchase and Sale Agreement") dated as of November 9, 2000, between Seller and Entergy Nuclear Indian Point 2, LLC, a Delaware limited liability company ("Buyer") and the Ancillary Agreements (collectively, the "Agreements") and the transactions contemplated thereby. Capitalized terms used but not defined herein have the meanings assigned to them in the Asset Purchase and Sale Agreement.
| |
| In that connection, I have examined originals, or copies certified or otherwise identified to my satisfaction, of such documents, corporate records and other instruments as I have deemed necessary or appropriate for the purposes of this opinion, including: (a) the Agreements, (b) the Certificate of Incorporation of Seller, (c) the By-laws of Seller and (d) resolutions of the Board of Trustees of Seller.
| |
| In rendering my opinion, I have assumed the due authorization, execution and delivery of each Agreement by each party thereto other than Seller.
| |
| Based upon the foregoing and subject to the qualifications hereinafter set forth, I am of the opinion as follows:
| |
| : 1. Based solely on a certificate from the Secretary of State of the State of New York, Seller is a corporation validly existing and in good standing under the laws of the State of New York. Seller has all necessary corporate power and authority to execute and deliver each Agreement and to consummate the transactions contemplated thereby; and the execution and delivery by Seller of each Agreement and the
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
| |
| | |
| 2 consummation by Seller of the transactions contemplated thereby have been duly and validly authorized by all necessary corporate action on the part of Seller.
| |
| : 2. Each of Seller's Qualified Decommissioning Fund and Nonqualified Decommissioning Fund is a trust validly existing and in good standing under the laws of the State of New York.
| |
| : 3. Each Agreement has been duly executed and delivered by Seller, and assuming that such Agreement constitutes a valid and binding obligation of each other party thereto, such Agreement constitutes a valid and binding obligation of Seller, enforceable against Seller in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law).
| |
| With respect to the foregoing opinion, (i) insofar as provisions contained in the Agreements provide for indemnification, the enforceability thereof may be limited by public policy considerations and (ii) the availability of a decree for specific performance or an injunction is subject to the discretion of the court requested to issue any such decree or injunction.
| |
| : 4. Subject to obtaining the Seller Required Regulatory Approvals and the Buyer Required Regulatory Approvals, neither the execution and delivery of the Agreements by Seller nor the consummation of the transaction contemplated thereby, including the sale by Seller of the Auctioned Assets pursuant to the Asset Purchase and Sale Agreement will (i) conflict with or result in any breach of any provision of the Certificate of Incorporation or By-laws of Seller, (ii) except as set forth in Schedule 4.03(a) to the Asset Purchase and Sale Agreement, result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Seller is a party or by which Seller, or any of the Auctioned Assets may be bound or (iii) violate any Law applicable to Seller, or the Auctioned Assets, except in the case of clauses (ii) and (iii) for such failures to obtain a necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
| |
| [NYCorp;1173312.1:4738W:11/14/00-11:45aI
| |
| | |
| 3
| |
| : 5. Except for the Seller Required Regulatory Approvals, no declaration, filing or registration with, or notice to, or authorization, consent or approval of any United States federal or New York State Governmental Authority is necessary for the consummation by Seller of the transactions contemplated by the Agreements, other than (A) such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not obtained or made, would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect, (B) any certificate of occupancy, consent or similar approval to authorize the change in occupancy of the Buyer Real Estate contemplated by the Asset Purchase and Sale Agreement and required pursuant to the Code of the Village of Buchanan, including specifically Section 211.49 thereof and (C) any consent of the Commissioner of General Services of the State of New York required for the assignment from Seller to Buyer of the right to install and maintain a fish return pipeline in an area in the Hudson River approximately 30 feet wide and 330 feet long.
| |
| The opinions expressed herein are subject to the qualification that I express no opinion regarding the applicability of, or compliance with, any bulk sales, bulk transfer or similar laws in connection with the transfer of the Auctioned Assets pursuant to the Asset Purchase and Sale Agreement. I express no opinion herein as to (i) the provisions of the Agreements insofar as such provisions relate to the subject matter jurisdiction of the United States District Court for the Southern District of New York to adjudicate any controversy related thereto and (ii) the waiver of an inconvenient forum set forth in the provisions of the Agreements.
| |
| I am admitted to practice in the State of New York, and I express no opinion as to matters governed by any laws other than the laws of the State of New York and the Federal laws of the United States of America.
| |
| I am furnishing this opinion to you pursuant to Section 7.02(e) of the Asset Purchase and Sale Agreement, solely for your benefit in connection with the transactions contemplated by the Asset Purchase and Sale Agreement. This opinion may not be relied upon by any other person or for any other purpose or used, circulated, quoted or otherwise referred to for any other purpose.
| |
| Very truly yours, INYCorp;1173312.1:4738W:11/14/00-11:45aJ
| |
| | |
| EXHIBIT D FORM OF AFFIDAVIT STATE OF NEW YORK,
| |
| ) ss.
| |
| COUNTY OF NEW YORK,)
| |
| The undersigned, on behalf of Consolidated Edison Company of New York, Inc., a New York corporation (the "Owner"), in consideration of [
| |
| I (the "Title Company") issuing its Owner's Policy pursuant to its Certificate of Title No. [
| |
| ] (the "Commitment"), and being first duly sworn on oath, deposes and states that:
| |
| : 1. Owner is the owner of the real estate described in Schedule A to the Commitment (the "Premises") but does not warrant the accuracy of such description or the acreage thereof.
| |
| : 2. All New York State Franchise Taxes, Gross Receipts Taxes and Excise Taxes imposed on Owner under Articles 9 and 9(A) of the Tax Law and which are currently due have been paid in full.
| |
| : 3. Except for and as provided in that certain Generating Plant and Gas Turbine Asset Purchase and Sale Agreement dated November 9, 2000 (the "APSA") between Owner and Entergy Nuclear Indian Point 2, LLC, a Delaware limited liability company (the "Purchaser"), the Owner is not a party to any outstanding contracts of sale, deeds, mortgages, easements or other conveyances affecting the Premises which are not disclosed by the public records as of [ ] or described in the Commitment and will not execute any such conveyances after the date hereof except in accordance with the terms of the APSA. [Note:
| |
| THE MUTUAL WAIVER OF THE POWER AUTHORITY OF THE STATE OF NEW YORK ("PASNY")/OWNER ROFR, THE WATER AND SEWER LINE EASEMENTS TO BE GRANTED BY OWNER TO PASNY, THE WATER SUPPLY AND ACCESS ROADS EASEMENT BETWEEN PASNY AND OWNER AND THE DECLARATION OF EASEMENTS TO BE EXECUTED PURSUANT TO THE APSA ARE DESCRIBED IN THE COMMITMENT PROVIDED TO PURCHASER BY OWNER AND MUST BE RECORDED/DESCRIBED IN ANY FUTURE COMMITMENT.]
| |
| : 4. There are no tenants in the Premises except I.
| |
| Affiant makes this Affidavit solely in his capacity as
| |
| [TITLE] of the Owner, and recourse (if any) hereunder shall be solely against the Owner and not against Affiant personally.
| |
| INYCorp;1173312.1: 4738W: 11/14/00-11:45aJ
| |
| | |
| 2 CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
| |
| by Name:
| |
| | |
| ==Title:==
| |
| Sworn to before me this day of [ I.
| |
| Notary Public 7
| |
| [NYCorp;1173312.1:4 38W:11/14/OO-11:45a)
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| EXHIBIT E FORM OF OPINION OF GENERAL COUNSEL OF BUYER AND ENTERGY NUCLEAR, INC.
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| ], 2001 Consolidated Edison Company of New York, Inc.
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| 4 Irving Place New York, NY 10003 Generating Plant and Gas Turbine Asset Purchase and Sale Agreement Ladies and Gentlemen:
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| I am General Counsel of Entergy Nuclear Indian Point 2, LLC, a Delaware limited liability company ("Buyer")
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| and Entergy Nuclear, Inc. and have acted for Buyer in connection with the Generating Plant and Gas Turbine Asset Purchase and Sale Agreement (the "Asset Purchase and Sale Agreement") dated as of November 9, 2000, between Buyer and Consolidated Edison Company of New York, Inc., a New York corporation ("Seller") and the Ancillary Agreements (collectively, the "Agreements") and the transactions contemplated thereby. Capitalized terms used but not defined herein have the meanings assigned to them in the Asset Purchase and Sale Agreement.
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| In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including: (a) the Agreements, (b) the Certificate of Incorporation and By-laws (or other similar governing documents) of Buyer and (c) resolutions of the Board of Directors of Buyer.
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| In rendering our opinion, we have assumed the due authorization, execution and delivery of each Agreement by each party thereto other than Buyer.
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| Based upon the foregoing and subject to the qualifications hereinafter set forth, we are of the opinion as follows:
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| : 1. Buyer is a limited liability company validly existing and in good standing under the laws of the State of (NYCorp;1173312.1:4738W:11/14/00-11:45aJ
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| 2 Delaware. Buyer has all necessary limited liability company power and authority to execute and deliver each Agreement and to consummate the transactions contemplated thereby; and the execution and delivery by Buyer of each Agreement and the consummation by Buyer of the transactions contemplated thereby have been duly and validly authorized by all necessary limited liability company action on the part of Buyer.
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| : 2. Each Agreement has been duly executed and delivered by Buyer, and assuming that such Agreement constitutes a valid and binding obligation of each other party thereto, such Agreement constitutes a valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law). With respect to the foregoing opinion, (i) insofar as provisions contained in the Agreements provide for indemnification, the enforceability thereof may be limited by public policy considerations and (ii) the availability of a decree for specific performance or an injunction is subject to the discretion of the court requested to issue any such decree or injunction.
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| : 3. Subject to obtaining the Buyer Required Regulatory Approvals and the Seller Required Regulatory Approvals, neither the execution and delivery of the Agreements nor the consummation of the transactions contemplated thereby, including the purchase by Buyer of the Auctioned Assets pursuant to the Asset Purchase and Sale Agreement will (i) conflict with or result in any breach of any provision of the Certificate of Formation or Operating Agreement (or other similar governing documents) of Buyer, (ii) result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Buyer or any of its subsidiaries is a party or by which any of their respective assets may be bound or (iii) violate any Law applicable to Buyer, or any of its assets, except in the case of clauses (ii) and (iii) for such failures to obtain a necessary consent, defaults (or rights) and violations which would not, individually or in the aggregate, be reasonably expected to have a Buyer Material Adverse Effect.
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| INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 3
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| : 4. Except for the Buyer Required Regulatory Approvals, no declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary for the consummation by Buyer of the transactions contemplated by the Agreements, other than (A) such declarations, filings, registrations, notices, authorizations, consents or approvals which, if not obtained or made, would not, individually or in the aggregate, be reasonably expected to create a Material Adverse Effect.
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| We express no opinion herein as to (i) the provisions of the Agreements insofar as such provisions relate to the subject matter jurisdiction of the United States District Court for the Southern District of New York to adjudicate any controversy related thereto and (ii) the waiver of an inconvenient forum set forth in the provisions of the Agreements.
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| We are furnishing this opinion to you pursuant to Section 7.03(d) of the Asset Purchase and Sale Agreement, solely for your benefit in connection with the transactions contemplated by the Asset Purchase and Sale Agreement. This opinion may not be relied upon by any other person or for any other purpose or used, circulated, quoted or otherwise referred to for any other purpose.
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| Very truly yours,
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| EXHIBIT F GUARANTEE AGREEMENT dated as of
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| ], 2001, between ENTERGY INTERNATIONAL HOLDINGS LTD LLC, a Delaware limited liability company
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| ("Guarantor"), and CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New York corporation (the "Seller" and, collectively with Guarantor, the "Parties").
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| WHEREAS Buyer (as defined below) and Seller have entered into a Generating Plant and Gas Turbine Asset Purchase and Sale Agreement dated as of November 9, 2000 (the "Sale Agreement"), pursuant to which Buyer has agreed to purchase and Seller has agreed to sell certain nuclear generating assets, as more particularly set forth therein, and each of Buyer and Seller undertook certain duties, responsibilities and obligations as set forth in the Sale Agreement and the Ancillary Agreements (as defined in the Sale Agreement);
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| WHEREAS Guarantor has agreed, as limited herein, to guarantee payment and performance of Buyer's covenants, agreements, obligations, liabilities, representations and warranties under the Sale Agreement and under each Ancillary Agreement; and WHEREAS Guarantor will benefit from the transactions contemplated by the Sale Agreement.
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| NOW, THEREFORE, the Parties agree as follows:
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| SECTION 1. Definitions. Capitalized terms used herein shall have the meanings assigned to them herein or, if not defined herein, then such terms shall have the meanings assigned to them in the Sale Agreement. For the purpose of this Agreement, "Buyer" shall mean Entergy Nuclear Indian Point 2, LLC, a Delaware limited liability company, and any successors and assigns under the Sale Agreement or any Ancillary Agreement.
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| SECTION 2. Guarantee. Guarantor absolutely, irrevocably and unconditionally guarantees, as limited herein, as a primary obligor and not merely as a surety, (a) the due and punctual payment of (i) each payment required to be made by Buyer under the Sale Agreement or any Ancillary Agreement, when and as due, including payments in respect of reimbursement of disbursements and interest thereon and (ii) all other monetary obligations, including indemnities, fees, costs and expenses, whether primary, secondary, direct, contingent, fixed or otherwise (including INYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 2 monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of Buyer under the Sale Agreement or any Ancillary Agreement (all such obligations referred to in the clause (a) being collectively referred to as the "Monetary Obligations") and (b) the due and punctual performance and observance of, and compliance with, all covenants, agreements, obligations, liabilities, representations and warranties of Buyer under or pursuant to the Sale Agreement or any Ancillary Agreement (all such obligations referred to in the preceding clauses (a) and (b) being collectively referred to as the "Obligations"). Guarantor further agrees that the Obligations may be amended or modified in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any amendment or modification of any Obligation.
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| Notwithstanding anything to the contrary contained herein, Guarantor shall not be required to pay or otherwise make out-of-pocket expenditures in excess of $10,000,000 in the aggregate hereunder in respect of the Obligations.
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| SECTION 3. Obligations Not Waived. To the fullest extent permitted by applicable Law, Guarantor waives presentment to, demand of payment from and protest to Buyer of any of the Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable Law, the obligations of Guarantor hereunder shall not be affected by (a) the failure of Seller to assert any claim or cause of action or demand or to enforce or exercise any right or remedy against Buyer in respect of the Obligations or otherwise under the provisions of the Sale Agreement and any Ancillary Agreement or otherwise or, in each case, any delay in connection therewith, or (b) any rescission, waiver, amendment or modification of, or any release from any of the terms or provisions of, this Agreement, the Sale Agreement, any Ancillary Agreement or any other agreement or instrument.
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| SECTION 4. Continuing Guarantee of Payment and Performance. Guarantor further agrees that its guarantee constitutes a continuing guarantee of payment and performance when due and not of collection, and waives any right to require that any resort be had by Seller to any security.
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| SECTION 5. No Discharge or Diminishment of Guarantee. (a) Subject to the last sentence of Section 2, the obligations of Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination, or
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| {NYCorp;1173312, :4738W:11/14/00-11:45aJ
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| 3 be subject to any defense or setoff (except as provided in clause (c) below), counterclaim, recoupment or, subject to Section 10, termination whatsoever, or otherwise be affected, for any reason (other than (1) the performance in full of all Obligations, including the indefeasible payment in full of all Monetary Obligations, and the termination and satisfaction of all the Obligations or (2) the failure of Seller to perform an obligation of Seller under the Sale Agreement that affects Buyer's performance of its obligations under the Sale Agreement), including:
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| (i) any claim of waiver, release, surrender, alteration or compromise of any of the Obligations; (ii) the invalidity, illegality or unenforceability of the Obligations; (iii) the occurrence or continuance of any event of bankruptcy, reorganization, insolvency, receivership or other similar proceeding with respect to Buyer or any other person (for purposes hereof, "person" means any individual, partnership, limited liability company, joint venture, corporation, trust, unincorporated organization or Governmental Authority), or the dissolution, liquidation or winding up of Buyer or any other person; (iv) any permitted assignment or other transfer of this Agreement by Seller or any permitted assignment or other transfer of the Sale Agreement or any Ancillary Agreement or any other agreement or instrument in whole or in part; (v) any sale, transfer or other disposition by Guarantor of any direct or indirect interest it may have in Buyer or any other change in ownership or control of Buyer; or (vi) the absence of any notice to, or knowledge on behalf of, Guarantor of the existence or occurrence of any of the matters or events set forth in the foregoing clauses.
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| (b) Without limiting the generality of the foregoing, the obligations of Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of Seller to assert any claim or cause of action or demand or to enforce any remedy under the Sale Agreement, any Ancillary Agreement or any other agreement or instru ment, by any waiver or modification of any provision thereof, by any default, failure or delay, wilful or INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| 4 otherwise, in the performance of the Obligations, or by any other act or omission that may or might in any manner or to any extent vary the risk of Guarantor or that would other wise operate as a discharge of Guarantor as a matter of law or equity (other than the performance in full of all Obligations, including the indefeasible payment in full in cash of all Monetary Obligations, and the termination and satisfaction of all the Obligations).
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| (c) Guarantor shall be entitled to set off claims that Buyer may have against Seller under the Sale Agreement or any Ancillary Agreement.
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| SECTION 6. Defenses of Buyer Waived. To the fullest extent permitted by applicable law, Guarantor waives any defense based on or arising out of any defense of Buyer or the unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of Buyer (other than (1) the performance in full of all Obligations, including the indefeasible payment in full in cash of all Monetary Obligations, and the termination and satisfaction of all the Obligations or (2) the failure of Seller to perform an obligation of Seller under the Sale Agreement that affects Buyer's performance of its obligations under the Sale Agreement). Seller may compromise or adjust any part of the Obligations, make any other accommodation with Buyer or exercise any other right or remedy available to it against Buyer, without affecting or impairing in any way the liability of Guarantor hereunder except to the extent all the Obligations have been fully and finally performed, including the indefeasible payment in full in cash of all Monetary Obligations, and terminated.
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| To the fullest extent permitted by applicable Law, Guarantor waives any defense arising out of any such election even though such election operates, pursuant to applicable Law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of Guarantor against Buyer or any security.
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| SECTION 7. Representations and Warranties of Guarantor. Guarantor represents and warrants to Seller as follows:
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| (a) Orqanization. Guarantor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to own, lease and operate its properties and to carry on its business as is now being conducted.
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| INYCorp;1173312.1:4738W:11/14/OO-11:45a)
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| 5 (b) Authority Relative to this Agreement.
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| Guarantor has all necessary limited liability company power and authority to execute and deliver this Agreement and to perform its obligations hereunder.
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| The execution and delivery by Guarantor of this Agreement and performance by Guarantor of its obligations hereunder have been duly and validly authorized by the Board of Directors (or equivalent governing body) of Guarantor and no other proceedings on the part of Guarantor are necessary to authorize this Agreement or performance by Guarantor of its obligations hereunder. This Agreement has been duly and validly executed and delivered by Guarantor and this Agreement constitutes a valid and binding agreement of Guarantor, enforceable against Guarantor in accordance with its terms.
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| (c) Consents and Approvals; No Violation.
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| (i) Neither the execution and delivery of this Agreement by Guarantor nor performance by Guarantor of its obligations hereunder will (A) conflict with or result in any breach of any provision of the Certifi cate of Formation or Operating Agreement of Guarantor, (B) result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Guarantor or any of its subsidiaries is a party or by which any of their respective assets may be bound or (C) violate any Law applicable to Guarantor, or any of its assets, except in the case of clauses (B) and (C) for such failures to obtain a necessary consent, defaults and violations which would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the ability of Guarantor to discharge its obligations under this Agreement.
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| (ii) No declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary for performance by Guarantor of its obligations hereunder.
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| SECTION 8. Agreement to Perform and Pay. In furtherance of the foregoing and not in limitation of any other right that Seller has at law or in equity against Guarantor by virtue hereof, upon the failure of Buyer to perform or pay any Obligation when and as the same shall become due, Guarantor hereby promises to and will forthwith, as the case may be, (a) perform, or cause to be performed, such unperformed Obligations and (b) pay, or cause to be
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a)
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| 6 paid, to Seller in cash the amount of such unpaid Obligations.
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| SECTION 9. Information. Guarantor assumes all responsibility for being and keeping itself informed of Buyer's financial condition and assets, and of all other circumstances bearing upon the risk of nonperformance of the Obligations (including the nonpayment of Monetary Obliga tions) and the nature, scope and extent of the risks that Guarantor assumes and incurs hereunder, and agrees that Seller will not have any duty to advise Guarantor of information known to it regarding such circumstances or risks.
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| SECTION 10. Termination and Reinstatement. The guarantee made hereunder (a) shall terminate when all the Obligations have been (i) performed in full, including the indefeasible payment in full of the Monetary Obligations and (ii) terminated and satisfied and (b) shall continue to be effective or be reinstated, as the case may be, if at any time any payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by Seller upon the bankruptcy or reorganization of Buyer or Guarantor or for any other reason.
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| SECTION 11. Assignment; No Third Party Benefici aries. This Agreement and all of the provisions hereunder shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests and obligations hereunder shall be assigned by Guarantor, including by operation of Law, without the prior written consent of Seller; provided, however, that Guarantor shall have the right to assign this Agreement and its rights, interests and obligations hereunder to Entergy Corporation or its successors.
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| SECTION 12. Amendment and Modification; Exten sion; Waiver. This Agreement may be amended, modified or supplemented only by an instrument in writing signed on behalf of each of the Parties. Any agreement on the part of a Party to any extension or waiver in respect of this Agreement shall be valid only if set forth in an instrument in writing signed on behalf of such Party. The failure of a Party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.
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| SECTION 13. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might INYCorp;1173312.1:4738W:11/14/00-11: 45aI
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| 7 otherwise govern under applicable principles of conflicts of law).
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| SECTION 14. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given (as of the time of delivery or, in the case of a telecopied communication, of confirmation) if delivered personally, telecopied (which is confirmed) or sent by overnight courier (providing proof of delivery) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):
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| if to Guarantor, to:
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| Entergy International Holdings Ltd LLC 639 Loyola Avenue New Orleans, LA 70161 Telecopy No.: (504) 576-4009 Attention: Chief Financial Officer with a copy on or prior to the Closing Date to:
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| c/o Entergy Nuclear, Inc.
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| P.O. Box 31995 Jackson, MS 39286-1995 Telecopy No.: (601) 368-5694 Attention: Assistant Secretary if to Seller, to:
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| Consolidated Edison Company of New York, Inc.
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| 4 Irving Place New York, NY 10003 Telecopy No.: (212) 677-0601 Attention: General Counsel with a copy on or prior to the Closing Date to:
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| Cravath, Swaine & Moore 825 Eighth Avenue New York, NY 10019 Telecopy No.: (212) 474-3700 Attention: George W. Bilicic, Jr., Esq.
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| SECTION 15. Jurisdiction and Enforcement.
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| (a) Each of the Parties irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of the State of New York, New York County and (ii) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated
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| [NYCorp;1173312.1:4738W:11/14/00-11:45a]
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| 8 hereby. Each of the Parties agrees to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or, if such suit, action or proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. Each of the Parties further agrees that service of process, summons, notice or document by hand delivery or U.S. registered mail at the address specified for such Party in Section 14 (or such other address specified by such Party from time to time pursuant to Section 14) shall be effective service of process for any action, suit or proceeding brought against such Party in any such court. Each of the Parties irrevo cably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevo cably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
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| (b) The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accor dingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provi sions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity.
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| SECTION 16. Survival of Agreement. All cove nants, agreements, representations and warranties made by Guarantor herein shall be considered to have been relied upon by Seller and shall survive the consummation of the transactions contemplated by the Sale Agreement regardless of any investigation made by Seller or on its behalf, and shall continue in full force and effect as long as any Obligations remain outstanding.
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| SECTION 17. Effectiveness; Counterparts. This Agreement shall become effective when executed by Guarantor and Seller. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
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| SECTION 18. Rules of Interpretation. The rules
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| [NYCorp;1173312.i:4738W:11/14/00-11:45a]
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| 9 of interpretation specified in Section 11.08 of the Sale Agreement shall be applicable to this Agreement.
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| SECTION 19. Severability. (a) If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agree ment shall nevertheless remain in full force and effect.
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| Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
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| (b) In the event that the provisions of this Agreement are claimed or held to be inconsistent with any other agreement or instrument evidencing the Obligations, the terms of this Agreement shall remain fully valid and effective.
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| SECTION 20. Entire Agreement. This Agreement embodies the entire agreement and understanding of the Parties in respect of the matters contemplated hereby.
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| There are no restrictions, promises, representations, warranties, covenants or undertakings other than those expressly set forth or referred to herein or therein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to the matters contemplated hereby.
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| [NYCorp;1173312.1:'4738W: 11/14/00- 11:45a]
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| IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective duly authorized officers as of the date first above written as of the day and year first above written.
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| ENTERGY INTERNATIONAL HOLDINGS LTD LLC, by Name:
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| ==Title:==
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| CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.,
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| by Name:
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| ==Title:==
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| (NYCorp;1173312.1:4738W:11/14/00-11:45aj
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| EXHIBIT G FORM OF OPINION OF COUNSEL TO GUARANTOR
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| ], 2001 Consolidated Edison Company of New York, Inc.
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| 4 Irving Place New York, NY 10003 Guarantee Agreement Ladies and Gentlemen:
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| We have acted as counsel to Entergy International Holdings Ltd LLC, a Delaware limited liability company
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| ("Guarantor"), in connection with the Guarantee Agreement (the "Guarantee") dated as of [ ], 2001, between Guarantor and Consolidated Edison Company of New York, Inc.,
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| a New York corporation ("Seller"). Capitalized terms used but not defined herein have the meanings assigned to them in the Guarantee.
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| In that connection, we have examined originals, or copies certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or appropriate for the purposes of this opinion, including: (a) the Guarantee, (b) the Certificate of Incorporation and By-laws (or other similar governing documents) of Guarantor, (c) resolutions of the Board of Directors of Guarantor and (d) the Generating Plant and Gas Turbine Asset Purchase and Sale Agreement dated as of November 9, 2000, between Entergy Nuclear Indian Point 2, LLC, a Delaware limited liability company, and Seller (the "Sale Agreement") and the Ancillary Agreements (as defined in the Sale Agreement).
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| In rendering our opinion, we have assumed the due authorization, execution and delivery of the Guarantee by Seller.
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| Based upon the foregoing and subject to the qualifications hereinafter set forth, we are of the opinion as follows:
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| : 1. Guarantor is a limited liability company validly existing and in good standing under the laws of the State of Delaware. Guarantor has all necessary limited 7
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| INYCorp;1173312.1:4 38W:11/14/00-11:45a)
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| 2 liability company power and authority to execute and deliver the Guarantee and to consummate the transactions contemplated thereby; and the execution and delivery by Guarantor of the Guarantee and the performance by Guarantor of its obligations thereunder have been duly and validly authorized by all necessary limited liability company action on the part of Guarantor.
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| : 2. The Guarantee has been duly executed and delivered by Guarantor, and assuming that the Guarantee constitutes a valid and binding obligation of Seller, the Guarantee constitutes a valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms (subject to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights generally from time to time in effect and to general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, regardless of whether considered in a proceeding in equity or at law).
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| With respect to the foregoing opinion, the availability of a decree for specific performance or an injunction is subject to the discretion of the court requested to issue any such decree or injunction.
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| : 3. Subject to obtaining Guarantor Required Regulatory Approvals, neither the execution and delivery of the Guarantee nor the performance by Guarantor of its obligations thereunder will (i) conflict with or result in any breach of any provision of the Certificate of Formation or Operating Agreement (or other similar governing documents) of Guarantor, (ii) result in a default (or give rise to any right of termination, cancelation or acceleration) under any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, agreement, lease or other instrument or obligation to which Guarantor or any of its subsidiaries is a party or by which any of their respective assets may be bound or (iii) violate any Law applicable to Guarantor, or any of its assets, except in the case of clauses (ii) and (iii) for such failures to obtain a necessary consent, defaults and violations which would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the ability of Guarantor to discharge its obligations under the Guarantee.
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| : 4. No declaration, filing or registration with, or notice to, or authorization, consent or approval of any Governmental Authority is necessary for performance by Guarantor of its obligations under the Guarantee.
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| I NYCorp;1173312.1:4738W: 11/14/00-11:45aI
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| 3 We express no opinion herein as to (i) the provisions of the Guarantee insofar as such provisions relate to the subject matter jurisdiction of the United States District Court for the Southern District of New York to adjudicate any controversy related thereto and (ii) the waiver of an inconvenient forum set forth in the provisions of the Guarantee.
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| We are furnishing this opinion to you pursuant to Section 7.03(g) of the Sale Agreement, solely for your benefit in connection with the transactions contemplated by the Guarantee and the Sale Agreement. This opinion may not be relied upon by any other person or for any other purpose or used, circulated, quoted or otherwise referred to for any other purpose.
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| Very truly yours, 7
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| [NYCorp;1173312.1:4 38W: 11/14/00-11 :45aI
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| EXHIBIT H FORM OF BILL OF SALE BILL OF SALE, made, executed and delivered on
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| ], 2001, by CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., a New York corporation ("Seller") and ENTERGY NUCLEAR INDIAN POINT 2, LLC, a Delaware limited liability company ("Buyer").
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| W I T N E S S E T H:
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| WHEREAS, Seller and Buyer are parties to a Generating Plant and Gas Turbine Asset Purchase and Sale Agreement dated as of November 9, 2000 (the "Agreement"); capitalized terms which are used in this Bill of Sale but are not defined herein shall have the meaning ascribed to such terms in the Agreement; and NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the terms and conditions of the Agreement, Seller does hereby sell, assign, convey, transfer and deliver to Buyer, subject to the terms of the Agreement, the Auctioned Assets that constitute personal property, including the items of personal property set forth in Schedule 2.02(a) (iii) to the Agreement.
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| This Bill of Sale and Assignment is subject to the terms and conditions of the Agreement, and the representations, agreements and obligations of Seller and Buyer contained in the Agreement are incorporated herein by reference and constitute an integral part of this Bill of Sale.
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| This instrument shall be binding upon and shall inure to the benefit of the respective successors and assigns of Seller and Buyer.
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| This Bill of Sale shall be construed and enforced in accordance with the laws (other than the conflict of law rules) of the State of New York.
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| This Bill of Sale may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.
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| INYCorp;1173312.1:4738W: 11/14/00- 11:45aI
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| 2 IN WITNESS WHEREOF, Seller has duly executed this Bill of Sale on the Date first above written.
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| CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
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| By:
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| Name:
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| ==Title:==
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| Agreed and accepted:
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| ENTERGY NUCLEAR INDIAN POINT 2, LLC By:
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| Name:
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| ==Title:==
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| INYCorp;1173312.1:4738W:11/14/00-11:45aI
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| EXHIBIT I APPLICATION FOR SERVICE FOR NON-RESIDENTIAL CUSTOMERS
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| [provided separately]
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| 7
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| [NYCorp;1173312.1:4 38W: 11/14/00-11:45aI
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| EXHIBIT J DIRECT RETAIL CUSTOMER OPERATING AND TRANSMISSION SERVICE AGREEMENT
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| [provided separately]
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| [NYCorp;1173312.1:4738W:11/14/OO-11:45a]
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| EXHIBIT K DIRECT CUSTOMER OPERATING AGREEMENT
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| [provided separately]
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| (NYCorp;1173312.1: 4738W:11/14/00-11 :45a I
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| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
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| ENCLOSURE 5 Proposed Operating Agreement Between Entergy Nuclear Indian Point 2, LLC And Entergy Nuclear Operations, Inc.
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| NOTE:
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| ENCLOSURE 5 REDACTED
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| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
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| ENCLOSURE 6 Organizational Chart of Entergy Non-Regulated Nuclear Organization And Resumes of:
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| Jerry Yelverton and Michael Kansler
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| ENTERGY NUCLEAR ORGANIZATIONAL CHART Entergy's Non-regulated Nuclear Organization December 1, 2000 ENI ENOI ENIP2 ENIP3 ENF ENGC President and CEO Jerry W. Yelverton ENOI ENIP2 ENIP3 ENF ENGC Sr. Vice President & COO Mike R. Kansler ENOI ENGC ENIP3 ENIP2 VP, Operations-Pilgrim VP, Operations- Indian Nuclear Point 3 VP, Engineering-Northeast Michael M. Bellamy Robert Barrett Danny R. Pace ENF ENOI ENIP2 VP, Operations - VP, Operations Support VP, Operations - Indian FitzPatrick James Knubel &2 Ted Sullivan John Groth ENI Entergy Nuclear Incorporated ENOI Entergy Nuclear Operations, Inc.
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| ENIP2 Entergy Nuclear Indian Point 2, LLC ENIP3 Entergy Nuclear Indian Point 3, LLC ENF Entergy Nuclear FitzPatrick, LLC ENGC Entergy Nuclear Generating Company
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| CONFIDENTIAL Entergy's Non-Regulated Nuclear Organization Modified 11-29-2000 Entergy Nuclear Entergy Nuclear Entergy Nuclear Entergy Nuclear New York New York Generation Co. Operations, Inc.
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| Investment Co.I Investment Co. II Entergy Nuclear Entergy Nuclear FitzPatrick, LLC IP3, LLC (FitzPatrick) (Indian Point 3)
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| Exempt Wholesale Generator (EWG)
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| Operations and Maintenance (O&M)
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| -% Entergy Jerry Yelverton Chairman & CEO Entergy's Nuclear Businesses.
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| Yelverton is chairman and chief executive officer for Entergy's nuclear businesses.
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| Entergy, through subsidiary Entergy Operations, Inc., operates five nuclear units in its retail electric service area: two-units at Arkansas Nuclear One and single units at Grand Gulf Nuclear Station, River Bend Station, and Waterford 3. Entergy, through subsidiaries Entergy Nuclear Indian Point 3, Entergy Nuclear FitzPatrick, and Entergy Nuclear Operations, Inc., owns and operates the Indian Point 3 and James A.
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| FitzPatrick Nuclear Plants in New York, and through subsidiary Entergy Nuclear Generation Company, Entergy owns and operates the Pilgrim Nuclear Station in Massachusetts. Through subsidiary Entergy Nuclear, Inc., Entergy is aggressively pursuing nuclear plant acquisitions and offering decommissioning and other Jerry Yelverton management services.
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| Chairman & CEO of Entergy's Nuclear Yelverton oversaw the first completed purchase of a nuclear plant in the U.S. when Businesses the Pilgrim Station transaction was completed in July 1999, only eight months after the agreement to purchase was signed. Under his leadership, in March 2000 Entergy Nuclear reached an agreement to purchase the Indian Point 3 and James A.
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| FitzPatrick plants from the New York Power Authority, and completed the purchases in November, 2000. Yelverton is also responsible for contracts for managing decommissioning at Maine Yankee and Millstone 1, which clearly establish the company as the industry expert in that cycle of nuclear plant life.
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| In addition to leading all of Entergy's nuclear subsidiaries, Yelverton is also executive vice president and chief nuclear officer of Entergy Services, Inc.
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| Yelverton is an active alumnus of Texas A&M University, where he earned his bachelor of science degree in nuclear engineering. He is currently a member of the Department of Nuclear Engineering Advisory Council.
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| Yelverton began his utility career in 1973 with Bechtel Power Corporation, serving in various quality assurance positions at Grand Gulf during the plant's construction phase. He joined the Entergy system in 1979 as nuclear site quality assurance manager at Grand Gulf. He held a number of management positions there, including manager of plant operations, refueling outage director, and manager of support. In 1990 he was named general manager at Arkansas Nuclear One and in 1992 was promoted to vice president, operations at ANO. Under his leadership, ANO improved from a marginal performer to one of the top plants in the U.S. in both cost and production, while improving the regulatory performance and INPO ratings. In 1996 he was promoted to executive vice president and chief operating officer for Entergy Operations. 1999 presented a steady progression of executive title expansions, culminating in the role of chairman and CEO for all of Entergy's nuclear businesses.
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| Yelverton is a Fall 1998 graduate of the three-month advanced management program at Harvard Business School. He serves as a member of NEI's Nuclear Strategic Issues Advisory Committee and Executive Steering Group, and has served as chairman of the INPO E&A IRG and as a member of EPRI's Research Advisory Committee. In 1983, he earned a senior reactor operator license at Grand Gulf.
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| go-Entergy Michael R. Kansler Mike Kansler, a 22-year veteran of nuclear power plant management, was named senior vice president and chief operating officer of Entergy's nuclear operations in New York state and the Northeast in January 2000 As Senior Vice President and Chief Operating Officer -Northeast of Entergy Nuclear Operations, Inc., he has operating responsibility for the Pilgrim Nuclear Station in Plymouth, MA and the Indian Point 3 and James A. FitzPatrick plants in NY.
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| Kansler previously served as vice president of operations support for all five of Entergy's nuclear power units in Arkansas, Mississippi and Louisiana. Functions reporting to him included Nuclear Support; Security; Materials, Purchasing and Contracts; Nuclear Safety and Licensing; and Corporate Assessments.
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| Michael R. Kansler In 1998, Kansler came to Entergy from Virginia Power, where he was Vice President, Chief Operating Officer, Nuclear Operations. He held responsibilities for managing the overall operation and Entergy Nuclear, Inc. maintenance of two twin unit nuclear power stations there. During his tenure, both a subsidiary of Entergy stations maintained high safety and operating performance records.
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| Corp Kansler began his professional career as an assistant engineer in 1977 at the Surry Nuclear Station. He participated in the company on-loan program of the Institute of Nuclear Power Operations in Atlanta, GA, in 1985. Kansler became superintendent of maintenance at the North Anna Station in 1986 and station manager at Surry in 1988 before moving to corporate management at Virginia Power as vice president of nuclear services in 1995. At the corporate level, Kansler chaired the nuclear Management Safety Review Committee.
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| Kansler earned a mechanical engineering degree from Virginia Polytechnic Institute and State University in 1976 and completed the Executive Management Program at Penn State University in 1991. He has held a Senior Reactor Operator license from the U.S. Nuclear Regulatory Commission and is a professional member of the American Society of Mechanical Engineers.
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| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
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| ENCLOSURE 7 Inter-Company Credit Agreements Between Entergy International Ltd. LLC, Entergy Global Investments, Inc.
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| And Entergy Nuclear IP2, LLC
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| NOTE:
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| ENCLOSURE 7 REDACTED
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| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
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| ENCLOSURE 8 Financial Statements For:
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| Entergy International Ltd. LLC and Entergy Global Investments, Inc.
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| 194544.1
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| NOTE:
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| ENCLOSURE 8 REDACTED
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| Consolidated Edison Co. of New York, Inc. Docket Nos. 50-003 and 50-247 Entergy Nuclear Indian Point 2, LLC License Nos. DPR-5 and DPR- 26 Entergy Nuclear Operations, Inc.
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| ENCLOSURE 9 Financial Statement For:
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| Entergy Nuclear IP2 194544.1
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| NOTE:
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| ENCLOSURE 9 REDACTED}}
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