Edgar Filing: ENTERGY ARKANSAS INC

a10q.htm

__________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Quarterly Period Ended September 30, 2010
	OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ____________ to ____________

Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.	Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.
1-11299	ENTERGY CORPORATION (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000 72-1229752	1-31508	ENTERGY MISSISSIPPI, INC. (a Mississippi corporation) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 368-5000 64-0205830


1-10764	ENTERGY ARKANSAS, INC. (an Arkansas corporation) 425 West Capitol Avenue Little Rock, Arkansas 72201 Telephone (501) 377-4000 71-0005900	0-05807	ENTERGY NEW ORLEANS, INC. (a Louisiana corporation) 1600 Perdido Street New Orleans, Louisiana 70112 Telephone (504) 670-3700 72-0273040


0-20371	ENTERGY GULF STATES LOUISIANA, L.L.C. (a Louisiana limited liability company) 446 North Boulevard Baton Rouge, Louisiana 70802 Telephone (800) 368-3749 74-0662730	1-34360	ENTERGY TEXAS, INC. (a Texas corporation) 350 Pine Street Beaumont, Texas 77701 Telephone (409) 981-2000 61-1435798


1-32718	ENTERGY LOUISIANA, LLC (a Texas limited liability company) 446 North Boulevard Baton Rouge, Louisiana 70802 Telephone (800) 368-3749 75-3206126	1-09067	SYSTEM ENERGY RESOURCES, INC. (an Arkansas corporation) Echelon One 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000 72-0752777

__________________________________________________________________________________________

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 þ No o

Indicate by check mark whether Entergy Corporation has submitted electronically and posted on Entergy's corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy Resources have submitted electronically and posted on Entergy's corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Securities Exchange Act of 1934.

	Large accelerated filer	Accelerated filer	Non- accelerated filer	Smaller reporting company
Entergy Corporation	Ö
Entergy Arkansas, Inc.			Ö
Entergy Gulf States Louisiana, L.L.C.			Ö
Entergy Louisiana, LLC			Ö
Entergy Mississippi, Inc.			Ö
Entergy New Orleans, Inc.			Ö
Entergy Texas, Inc.			Ö
System Energy Resources, Inc.			Ö

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Common Stock Outstanding		Outstanding at October 29, 2010
Entergy Corporation	($0.01 par value)	180,915,164

Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., Entergy Texas, Inc., and System Energy Resources, Inc. separately file this combined Quarterly Report on Form 10-Q. Information contained herein relating to any individual company is filed by such company on its own behalf. Each company reports herein only as to itself and makes no other representations whatsoever as to any other company. This combined Quarterly Report on Form 10-Q supplements and updates the Annual Report on Form 10-K for the calendar year ended December 31, 2009 and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010 and June 30, 2010, filed by the individual registrants with the SEC, and should be read in conjunction therewith.

ENTERGY CORPORATION AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2010

	Page Number

Forward-looking information	iv
Definitions	vi
Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis
Plan to Pursue Separation of Non-Utility Nuclear	1
Results of Operations	2
Liquidity and Capital Resources	10
Rate, Cost-recovery, and Other Regulation	15
Market and Credit Risk Sensitive Instruments	19
Critical Accounting Estimates	21
Consolidated Statements of Income	23
Consolidated Statements of Cash Flows	24
Consolidated Balance Sheets	26
Consolidated Statements of Changes in Equity and Comprehensive Income	28
Selected Operating Results	29
Notes to Financial Statements	30
Part 1. Item 4. Controls and Procedures	80
Entergy Arkansas, Inc. and Subsidiaries
Management's Financial Discussion and Analysis
Results of Operations	81
Liquidity and Capital Resources	84
State and Local Rate Regulation	87
Federal Regulation	88
Nuclear Matters	88
Environmental Risks	88
Critical Accounting Estimates	88
Consolidated Income Statements	89
Consolidated Statements of Cash Flows	91
Consolidated Balance Sheets	92
Consolidated Statements of Changes in Equity	94
Selected Operating Results	95
Entergy Gulf States Louisiana, L.L.C.
Management's Financial Discussion and Analysis
Results of Operations	96
Liquidity and Capital Resources	99
State and Local Rate Regulation	102
Federal Regulation	103
Nuclear Matters	103
Environmental Risks	103
Critical Accounting Estimates	104
Income Statements	105
Statements of Cash Flows	107
Balance Sheets	108
Statements of Changes in Equity and Comprehensive Income	110
Selected Operating Results	111

ENTERGY CORPORATION AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2010

	Page Number

Entergy Louisiana, LLC
Management's Financial Discussion and Analysis
Results of Operations	112
Liquidity and Capital Resources	115
State and Local Rate Regulation	119
Federal Regulation	120
Nuclear Matters	120
Environmental Risks	120
Critical Accounting Estimates	120
Income Statements	121
Statements of Cash Flows	123
Balance Sheets	124
Statements of Changes in Equity and Comprehensive Income	126
Selected Operating Results	127
Entergy Mississippi, Inc.
Management's Financial Discussion and Analysis
Results of Operations	128
Liquidity and Capital Resources	130
State and Local Rate Regulation	132
Federal Regulation	133
Critical Accounting Estimates	133
Income Statements	134
Statements of Cash Flows	135
Balance Sheets	136
Statements of Changes in Equity	138
Selected Operating Results	139
Entergy New Orleans, Inc.
Management's Financial Discussion and Analysis
Results of Operations	140
Liquidity and Capital Resources	142
State and Local Rate Regulation	144
Federal Regulation	144
Environmental Risks	145
Critical Accounting Estimates	145
Income Statements	146
Statements of Cash Flows	147
Balance Sheets	148
Statements of Changes in Equity	150
Selected Operating Results	151

ENTERGY CORPORATION AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2010

	Page Number

Entergy Texas, Inc. and Subsidiaries
Management's Financial Discussion and Analysis
Results of Operations	152
Liquidity and Capital Resources	155
State and Local Rate Regulation	157
Federal Regulation	158
Environmental Risks	159
Critical Accounting Estimates	159
Consolidated Income Statements	160
Consolidated Statements of Cash Flows	161
Consolidated Balance Sheets	162
Consolidated Statements of Changes in Equity	164
Selected Operating Results	165
System Energy Resources, Inc.
Management's Financial Discussion and Analysis
Results of Operations	166
Liquidity and Capital Resources	166
Nuclear Matters	168
Environmental Risks	168
Critical Accounting Estimates	168
Income Statements	169
Statements of Cash Flows	171
Balance Sheets	172
Statements of Changes in Equity	174
Part II. Other Information
Item 1. Legal Proceedings	175
Item 1A. Risk Factors	175
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	176
Item 5. Other Information	176
Item 6. Exhibits	183
Signature	186

iii

FORWARD-LOOKING INFORMATION

In this combined report and from time to time, Entergy Corporation and the Registrant Subsidiaries each makes statements as a registrant concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "may," "will," "could," "project," "believe," "anticipate," "intend," "expect," "estimate," "continue," "potential," "plan," "predict," "forecast," and other similar words or expressions are intended to identify forward-looking statements but are not the only means to identify these statements. Although each of these registrants believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Any forward-looking statement is based on information current as of the date of this combined report and speaks only as of the date on which such statement is made. Except to the extent required by the federal securities laws, these registrants undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Forward-looking statements involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including those factors discussed or incorporated by reference in (a) Item 1A. Risk Factors in the Form 10-K, (b) Management's Financial Discussion and Analysis in the Form 10-K and in this report, and (c) the following factors (in addition to others described elsewhere in this combined report and in subsequent securities filings):

resolution of pending and future rate cases and negotiations, including various performance-based rate discussions, and other regulatory proceedings, including those related to Entergy's System Agreement, Entergy's utility supply plan, recovery of storm costs, and recovery of fuel and purchased power costs

changes in utility regulation, including the beginning or end of retail and wholesale competition, the ability to recover net utility assets and other potential stranded costs, the operations of the independent coordinator of transmission for Entergy's utility service territory, and the application of more stringent transmission reliability requirements or market power criteria by the FERC

·	changes in regulation of nuclear generating facilities and nuclear materials and fuel, including possible shutdown of nuclear generating facilities, particularly those owned or operated by the Non-Utility Nuclear business

·	resolution of pending or future applications for license renewals or modifications of nuclear generating facilities

·	the performance of and deliverability of power from Entergy's generation resources, including the capacity factors at its nuclear generating facilities

·	Entergy's ability to develop and execute on a point of view regarding future prices of electricity, natural gas, and other energy-related commodities

prices for power generated by Entergy's merchant generating facilities, the ability to hedge, sell power forward or otherwise reduce the market price risk associated with those facilities, including the Non-Utility Nuclear plants, and the prices and availability of fuel and power Entergy must purchase for its Utility customers, and Entergy's ability to meet credit support requirements for fuel and power supply contracts

·	volatility and changes in markets for electricity, natural gas, uranium, and other energy-related commodities

·	changes in law resulting from federal or state energy legislation or legislation subjecting energy derivatives used in hedging and risk management transactions to governmental regulation

·	changes in environmental, tax, and other laws, including requirements for reduced emissions of sulfur, nitrogen, carbon, mercury, and other substances, and changes in costs of compliance with environmental and other laws and regulations

·	uncertainty regarding the establishment of interim or permanent sites for spent nuclear fuel and nuclear waste storage and disposal

FORWARD-LOOKING INFORMATION (Concluded)

variations in weather and the occurrence of hurricanes and other storms and disasters, including uncertainties associated with efforts to remediate the effects of hurricanes and ice storms and the recovery of costs associated with restoration, including accessing funded storm reserves, federal and local cost recovery mechanisms, securitization, and insurance

·	effects of climate change

·	Entergy's ability to manage its capital projects and operation and maintenance costs

·	Entergy's ability to purchase and sell assets at attractive prices and on other attractive terms

·	the economic climate, and particularly economic conditions in Entergy's Utility service territory and the Northeast United States and events that could influence economic conditions in those areas

·	the effects of Entergy's strategies to reduce tax payments

·	changes in the financial markets, particularly those affecting the availability of capital and Entergy's ability to refinance existing debt, execute share repurchase programs, and fund investments and acquisitions

·	actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in general corporate ratings, and changes in the rating agencies' ratings criteria

·	changes in inflation and interest rates

·	the effect of litigation and government investigations or proceedings

·	advances in technology

·	the potential effects of threatened or actual terrorism and war or a catastrophic event such as a nuclear accident or a natural gas pipeline explosion

·	the effects of new or existing safety concerns regarding nuclear power plants and nuclear fuel

·	Entergy's ability to attract and retain talented management and directors

·	changes in accounting standards and corporate governance

·	declines in the market prices of marketable securities and resulting funding requirements for Entergy's defined benefit pension and other postretirement benefit plans

·	changes in decommissioning trust fund values or earnings or in the timing of or cost to decommission nuclear plant sites

·	the ability to successfully complete merger, acquisition, or divestiture plans, regulatory or other limitations imposed as a result of merger, acquisition, or divestiture, and the success of the business following a merger, acquisition, or divestiture

·	risks and uncertainties associated with unwinding the business infrastructure associated with the contemplated Non-Utility Nuclear spin-off, joint venture, and related transactions.

DEFINITIONS

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

Abbreviation or Acronym	Term
AEEC	Arkansas Electric Energy Consumers
AFUDC	Allowance for Funds Used During Construction
ALJ	Administrative Law Judge
ANO 1 and 2	Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy Arkansas
APSC	Arkansas Public Service Commission
ASC	FASB Accounting Standards Codification
ASU	FASB Accounting Standards Update
Board	Board of Directors of Entergy Corporation
capacity factor	Actual plant output divided by maximum potential plant output for the period
City Council or Council	Council of the City of New Orleans, Louisiana
Entergy	Entergy Corporation and its direct and indirect subsidiaries
Entergy Corporation	Entergy Corporation, a Delaware corporation
Entergy Gulf States, Inc.	Predecessor company for financial reporting purposes to Entergy Gulf States Louisiana that included the assets and business operations of both Entergy Gulf States Louisiana and Entergy Texas
Entergy Gulf States Louisiana	Entergy Gulf States Louisiana, L.L.C., a company created in connection with the jurisdictional separation of Entergy Gulf States, Inc. and the successor company to Entergy Gulf States, Inc. for financial reporting purposes. The term is also used to refer to the Louisiana jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Entergy Texas	Entergy Texas, Inc., a company created in connection with the jurisdictional separation of Entergy Gulf States, Inc. The term is also used to refer to the Texas jurisdictional business of Entergy Gulf States, Inc., as the context requires.
EPA	United States Environmental Protection Agency
ERCOT	Electric Reliability Council of Texas
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FitzPatrick	James A. FitzPatrick Nuclear Power Plant (nuclear), owned by an Entergy subsidiary in the Non-Utility Nuclear segment
Form 10-K	Annual Report on Form 10-K for the calendar year ended December 31, 2009 filed with the SEC by Entergy Corporation and its Registrant Subsidiaries
Grand Gulf	Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System Energy
GWh	Gigawatt-hour(s), which equals one million kilowatt-hours
Independence	Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by Entergy Mississippi, and 7% by Entergy Power
Indian Point 2	Unit 2 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Non-Utility Nuclear segment
Indian Point 3	Unit 3 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Non-Utility Nuclear segment
IRS	Internal Revenue Service
ISO	Independent System Operator
kW	Kilowatt, which equals one thousand watts
kWh	Kilowatt-hour(s)
LPSC	Louisiana Public Service Commission
MMBtu	One million British Thermal Units

DEFINITIONS (Continued)

Abbreviation or Acronym	Term
MPSC	Mississippi Public Service Commission
MW	Megawatt(s), which equals one thousand kilowatts
MWh	Megawatt-hour(s)
Net MW in operation	Installed capacity owned or operated
Non-Utility Nuclear	Entergy's business segment that owns and operates six nuclear power plants and sells electric power produced by those plants to wholesale customers
NRC	Nuclear Regulatory Commission
NYPA	New York Power Authority
Palisades	Palisades Power Plant (nuclear), owned by an Entergy subsidiary in the Non-Utility Nuclear segment
Pilgrim	Pilgrim Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Non-Utility Nuclear segment
PPA	Purchased power agreement
PUCT	Public Utility Commission of Texas
PUHCA 1935	Public Utility Holding Company Act of 1935, as amended
PUHCA 2005	Public Utility Holding Company Act of 2005, which repealed PUHCA 1935, among other things
Registrant Subsidiaries	Entergy Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., Entergy Texas, Inc., and System Energy Resources, Inc.
River Bend	River Bend Station (nuclear), owned by Entergy Gulf States Louisiana
RTO	Regional transmission organization
SEC	Securities and Exchange Commission
System Agreement	Agreement, effective January 1, 1983, as modified, among the Utility operating companies relating to the sharing of generating capacity and other power resources
System Energy	System Energy Resources, Inc.
TWh	Terawatt-hour(s), which equals one billion kilowatt-hours
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
Utility	Entergy's business segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution
Utility operating companies	Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas
Vermont Yankee	Vermont Yankee Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Non-Utility Nuclear segment
Waterford 3	Unit No. 3 (nuclear) of the Waterford Steam Electric Station, 100% owned or leased by Entergy Louisiana
weather-adjusted usage	Electric usage excluding the effects of deviations from normal weather

vii

ENTERGY CORPORATION AND SUBSIDIARIES

MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS

Entergy operates primarily through its two, reportable, operating segments: Utility and Non-Utility Nuclear.

·	Utility generates, transmits, distributes, and sells electric power in service territories in four states that include portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and operates a small natural gas distribution business.

·	Non-Utility Nuclear owns and operates six nuclear power plants located in the northern United States and sells the electric power produced by those plants primarily to wholesale customers. This business also provides services to other nuclear power plant owners.

In addition to its two primary, reportable, operating segments, Entergy also operates the non-nuclear wholesale assets business. The non-nuclear wholesale assets business sells to wholesale customers the electric power produced by power plants that it owns while it focuses on improving operating and financial performance for its plants, consistent with Entergy’s market-based point of view.

In June 2010, Entergy announced that it plans to integrate the Non-Utility Nuclear and non-nuclear wholesale assets businesses into a new organization called Entergy Wholesale Commodities.

Plan to Pursue Separation of Non-Utility Nuclear

See the Form 10-K for a discussion of the Board-approved plan to pursue a tax-free spin-off of the Non-Utility Nuclear business to Entergy shareholders. On March 2, 2010, Entergy proposed conditions for review by the New York Public Service Commission (NYPSC), including an incremental $500 million reduction in Enexus's long-term debt, restrictions on Enexus's ability to make dividend payments and returns of capital to shareholders until certain conditions are met, and the potential for disbursements to New York's energy efficiency funds if power prices exceed certain levels. At its hearing held on March 4, 2010, the NYPSC discussed Entergy's petition and proposed conditions and, after that meeting, issued a notice soliciting comments "on a set of conditions that could potentially be developed" regarding Entergy's planned spin-off transaction. At its hearing held on March 25, 2010, the NYPSC voted 5-0 to reject Entergy's planned spin-off transaction.

On April 5, 2010, Entergy announced that, effective immediately, it planned to unwind the business infrastructure associated with the proposed separate Non-Utility Nuclear generation (Enexus) and nuclear services (EquaGen) companies while it evaluates and works to preserve its legal rights. Entergy also declared its next quarterly dividend on its common shares of $0.83 per share, an increase from the previous $0.75 per share, and announced that it expected to execute on the $750 million share repurchase program authorized by the Board in the fourth quarter 2009. The amount of repurchases may vary as a result of material changes in business results or capital spending or new investment opportunities. As a result of the plan to unwind the business infrastructure, Entergy recorded expenses for the write-off of certain capitalized costs incurred in connection with the planned spin-off transaction. These costs are discussed in more detail throughout the "Results of Operations" section below. Entergy expects that it will incur approximately $15 million, after-tax, in additional expenses in unwinding this business, primarily through the remainder of 2010, including additional write-offs, dis-synergies, and certain other costs.

In June 2010 the Vermont Public Service Board denied Entergy's spin-off transaction petition.

In July 2010, Entergy withdrew its spin-off transaction petition that was filed with the NYPSC. In August 2010 the NYPSC issued an order closing the proceeding. In the order, the NYPSC also instituted a new proceeding directing Entergy and its subsidiaries with New York nuclear operations (Entergy Corporation, Entergy Nuclear FitzPatrick, LLC, Entergy Nuclear Indian Point 2, LLC, Entergy Nuclear Indian Point 3, LLC, and Entergy

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Nuclear Operations, Inc., together, the "Entergy Owners") to show cause why they should not be required to give notice to the NYPSC at least 60 days prior to "any contemplated transactions which could jeopardize the financial strength of any or all of the Entergy New York nuclear subsidiaries." The facilities to which the order relates are the James A. FitzPatrick Nuclear Station and the Indian Point Energy Center (New York facilities).

The order states that the intent of the NYPSC is not to impose "an overly broad application" of this notice requirement, and that the NYPSC is "not concerned about transactions that would not jeopardize the financial integrity of New York entities." By way of example, the order states that the NYPSC is not suggesting that notice be provided "whenever Entergy or an intermediate parent of the New York facilities issues debt, as is often the case, without restrictions being placed on the financial capacity of its New York subsidiaries to borrow or to support debt needed to finance capital projects at the New York facilities." The order states, however, that the NYPSC may consider an advance notice requirement for any transaction "that would reduce the credit quality of the Entergy Owners below a credit rating of 'BBB-' or the equivalent or, in connection with the transaction and in order to provide credit support to a corporate parent, that would restrict a New York facility from issuing its own debt or otherwise require the facility to provide dividend income to its parent, when, in light of the facility's capital needs, the issuance of such dividends would be inappropriate."

In September 2010, Entergy filed a response to the NYPSC's order, which raised a number of concerns with regard to the NYPSC's jurisdiction to impose the proposed notice requirement and the practical difficulties with implementing such a requirement. In October 2010 the New York Attorney General's Office filed a response to Entergy's filing addressing the NYPSC's jurisdiction to impose the proposed notice requirement, to which Entergy filed a reply.

Results of Operations

Third Quarter 2010 Compared to Third Quarter 2009

Following are income statement variances for Utility, Non-Utility Nuclear, Parent & Other, and Entergy comparing the third quarter 2010 to the third quarter 2009 showing how much the line item increased or (decreased) in comparison to the prior period:

	Utility	Non-Utility Nuclear	Parent & Other (1)	Entergy
	(In Thousands)

3rd Qtr 2009 Consolidated Net Income	$299,090	$200,432	($39,355)	$460,167

Net revenue (operating revenue less fuel expense, purchased power, and other regulatory charges/credits)	146,810	(63,306)	14,047	97,551
Other operation and maintenance expenses	58,417	70,301	(1,606)	127,112
Taxes other than income taxes	8,973	2,056	(1,663)	9,366
Depreciation and amortization	(19,216)	2,732	464	(16,020)
Other income	(21,901)	(5,823)	(18,037)	(45,761)
Interest charges	(694)	(12,445)	(4,240)	(17,379)
Other expenses	2,042	4,712	1	6,755
Income taxes	36,536	(69,916)	(62,398)	(95,778)

3rd Qtr 2010 Consolidated Net Income	$337,941	$133,863	$26,097	$497,901

(1)	Parent & Other includes eliminations, which are primarily intersegment activity.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Refer to "ENTERGY CORPORATION AND SUBSIDIARIES - SELECTED OPERATING RESULTS" for further information with respect to operating statistics.

Net Revenue

Utility

Following is an analysis of the change in net revenue comparing the third quarter 2010 to the third quarter 2009.

		Amount
		(In Millions)

2009 net revenue		$1,376
Volume/weather		99
Retail electric price		56
Other		(9)
2010 net revenue		$1,522

The volume/weather variance is primarily due to an increase of 2,502 GWh, or 8%, in billed electricity usage in all sectors. The effect of warmer-than-normal weather was the primary driver of the increase in residential and commercial sales. The industrial sector reflected strong sales growth on continuing signs of economic recovery. The improvement in this sector was primarily driven by inventory restocking and strong exports with the chemicals, refining, and miscellaneous manufacturing sectors leading the improvement.

The retail electric price variance is primarily due to:

·	increases in the formula rate plan riders at Entergy Gulf States Louisiana effective January 2010 and November 2009 and at Entergy Louisiana effective November 2009;

·	a base rate increase at Entergy Arkansas effective July 2010;

·	rate actions at Entergy Texas, including a base rate increase effective August 2010;

·	a formula rate plan provision of $16.6 million recorded in the third quarter 2009 for refunds that were made to customers in accordance with settlements approved by the LPSC; and

·	the recovery in 2009 by Entergy Arkansas of 2008 extraordinary storm costs, as approved by the APSC, which ceased in January 2010. The recovery of storm costs is offset in other operation and maintenance expenses.

See Note 2 to the financial statements herein and in the Form 10-K for further discussion of the proceedings referred to above.

Non-Utility Nuclear

Following is an analysis of the change in net revenue comparing the third quarter 2010 to the third quarter 2009.

		Amount
		(In Millions)

2009 net revenue		$622
Volume		(55)
Realized price changes		(10)
Other		1
2010 net revenue		$558

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

As shown in the table above, net revenue for Non-Utility Nuclear decreased by $64 million, or 10%, in the third quarter 2010 compared to the third quarter 2009 primarily due to lower volume resulting from more refueling and unplanned outage days in 2010 and lower pricing in its contracts to sell power. Included in net revenue is $12 million and $13 million of amortization of the Palisades purchased power agreement in the third quarters 2010 and 2009, respectively, which is non-cash revenue and is discussed in Note 15 to the financial statements in the Form 10-K. Following are key performance measures for Non-Utility Nuclear for the third quarter 2010 and 2009:

	2010	2009

Net MW in operation at September 30	4,998	4,998
Average realized price per MWh	$61.41	$61.70
GWh billed	9,888	10,876
Capacity factor	91%	100%
Refueling Outage Days:
FitzPatrick	18	-

The FitzPatrick refueling outage continued for 17 days into the fourth quarter 2010.

Realized Price per MWh

See the Form 10-K for a discussion of Non-Utility Nuclear's realized price per MWh, including the factors that influence it and the increase in the annual average realized price per MWh from $39.40 for 2003 to $61.07 for 2009. Non-Utility Nuclear is almost certain to experience a decrease in realized price per MWh in 2010 and then again in 2011, however, because the realized price for the first nine months of 2010 was $59.27 and, as shown in the contracted sale of energy table in "Market and Credit Risk Sensitive Instruments," Non-Utility Nuclear has sold forward 90% of its planned energy output for the remainder of 2010 for an average contracted energy price of $57 per MWh and has sold forward 95% of its planned energy output for 2011 for an average contracted energy price of $53 per MWh.

Other Income Statement Items

Utility

Other operation and maintenance expenses increased from $457 million for the third quarter 2009 to $516 million for the third quarter 2010 primarily due to an increase of $41 million in compensation and benefits costs, resulting from decreasing discount rates, the amortization of asset losses, and an increase in the accrual for incentive-based compensation. See Note 11 to the financial statements in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs. Also contributing to the increase was an increase of $8 million in fossil expenses resulting from higher outage costs.

Depreciation and amortization expenses decreased primarily due to a decrease in depreciation rates at Entergy Arkansas as a result of the rate case settlement agreement approved by the APSC in June 2010.

Other income decreased primarily due to carrying charges of $18 million recorded in 2009 on Hurricane Gustav and Hurricane Ike storm restoration costs and a gain of $16 million recorded in 2009 on the sale of undeveloped real estate by Entergy Louisiana Properties, LLC. The decrease was partially offset by an increase of distributions of $7 million earned by Entergy Louisiana and $4 million earned by Entergy Gulf States Louisiana on investments in preferred membership interests of Entergy Holdings Company. The distributions on preferred membership interests are eliminated in consolidation and have no effect on net income because the investment is in another Entergy subsidiary. See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Hurricane Gustav and Hurricane Ike" for discussion of these investments in preferred membership interests.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Non-Utility Nuclear

Other operation and maintenance expenses increased from $212 million for the third quarter 2009 to $282 million for the third quarter 2010 primarily due to:

·	the write-off of $25 million of capital costs, primarily for software that will not be utilized, and $11 million of additional costs incurred in connection with Entergy's decision to unwind the infrastructure created for the planned Non-Utility Nuclear spin-off transaction;

an increase of $23 million in compensation and benefits costs, resulting from decreasing discount rates, the amortization of asset losses, and an increase in the accrual for incentive-based compensation. See Note 11 to the financial statements in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs;

·	the write-off of $10 million of capitalized engineering costs associated with a potential uprate project; and

·	spending of $3 million related to tritium remediation work at the Vermont Yankee site.

Parent & Other

Other income decreased primarily due to:

·	increases in the elimination for consolidation purposes of distributions earned of $7 million by Entergy Louisiana and $4 million by Entergy Gulf States Louisiana on investments in preferred membership interests of Entergy Holdings Company, as discussed above; and

·	an increase in the elimination for consolidation purposes of $6 million of interest income from Entergy subsidiaries.

Income Taxes

The effective income tax rate for the third quarter 2010 was 27.1%. The difference in the effective income tax rate versus the statutory rate of 35% for the third quarter 2010 was primarily due to:

a favorable Tax Court decision holding that the U.K. Windfall Tax can be used as a credit for purposes of computing the U.S. foreign tax credit, which allows Entergy to reverse a previously established partial tax reserve of $43 million, included in Parent and Other, on the issue. See Note 3 to the financial statements in the Form 10-K and Note 10 to the financial statements herein for further discussion of this tax litigation;

·	the recognition of a $14 million Louisiana state income tax benefit related to storm cost financing; and

·	the reversal of a reserve of $13 million with respect to restructuring of business operations within the Non-Utility Nuclear segment.

Partially offsetting the decreased effective income tax rate were state income taxes and certain book and tax differences for Utility plant items.

The effective income tax rate for the third quarter 2009 was 37.9%. The difference in the effective income tax rate versus the statutory rate of 35% for the third quarter 2009 was primarily due to state income taxes and certain book and tax differences for utility plant items.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Nine Months Ended September 30, 2010 Compared to Nine Months Ended September 30, 2009

Following are income statement variances for Utility, Non-Utility Nuclear, Parent & Other, and Entergy comparing the nine months ended September 30, 2010 to the nine months ended September 30, 2009 showing how much the line item increased or (decreased) in comparison to the prior period:

	Utility	Non-Utility Nuclear	Parent & Other (1)	Entergy
	(In Thousands)

2009 Consolidated Net Income	$566,634	$461,524	($95,848)	$932,310

Net revenue (operating revenue less fuel expense, purchased power, and other regulatory charges/credits)	369,384	(78,644)	18,854	309,594
Other operation and maintenance expenses	60,056	148,156	(18,292)	189,920
Taxes other than income taxes	15,296	922	(1,270)	14,948
Depreciation and amortization	(17,620)	7,098	731	(9,791)
Other income	(39,239)	91,421	(27,573)	24,609
Interest charges	31,316	5,815	(27,065)	10,066
Other expenses	7,257	14,984	4	22,245
Income taxes	89,389	(50,263)	(37,000)	2,126

2010 Consolidated Net Income	$711,085	$347,589	($21,675)	$1,036,999

(1)	Parent & Other includes eliminations, which are primarily intersegment activity.

Refer to "ENTERGY CORPORATION AND SUBSIDIARIES - SELECTED OPERATING RESULTS" for further information with respect to operating statistics.

Net Revenue

Utility

Following is an analysis of the change in net revenue comparing the nine months ended September 30, 2010 to the nine months ended September 30, 2009.

		Amount
		(In Millions)

2009 net revenue		$3,576
Volume/weather		222
Retail electric price		111
Other		36
2010 net revenue		$3,945

The volume/weather variance is primarily due to an increase of 7,123 GWh, or 9%, in billed electricity usage in all sectors, including the effect on the residential sector of colder-than-normal weather in the first quarter 2010 and warmer-than-normal weather in the second and third quarters 2010. The industrial sector reflected strong sales growth on continuing signs of economic recovery. The improvement in this sector was primarily driven by inventory restocking and strong exports with the chemicals, refining, and miscellaneous manufacturing sectors leading the improvement.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

The retail electric price variance is primarily due to:

·	increases in the formula rate plan riders at Entergy Gulf States Louisiana effective January 2010 and November 2009, at Entergy Louisiana effective November 2009, and at Entergy Mississippi effective July 2009;

·	a base rate increase at Entergy Arkansas effective July 2010;

·	rate actions at Entergy Texas, including a base rate increase effective August 2010;

·	a formula rate plan provision of $16.6 million recorded in the third quarter 2009 for refunds that were made to customers in accordance with settlements approved by the LPSC;

·	the recovery in 2009 by Entergy Arkansas of 2008 extraordinary storm costs, as approved by the APSC, which ceased in January 2010. The recovery of storm costs is offset in other operation and maintenance expenses; and

·	a base rate decrease at Entergy New Orleans effective June 2009.

See Note 2 to the financial statements herein and in the Form 10-K for further discussion of the proceedings referred to above.

Non-Utility Nuclear

Following is an analysis of the change in net revenue comparing the nine months ended September 30, 2010 to the nine months ended September 30, 2009.

		Amount
		(In Millions)

2009 net revenue		$1,716
Realized price changes		(87)
Volume		20
Other		(11)
2010 net revenue		$1,638

As shown in the table above, net revenue for Non-Utility Nuclear decreased by $78 million, or 5%, in the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 primarily due to lower pricing in its contracts to sell power, partially offset by higher volume resulting from more refueling outage days in 2009. Included in net revenue is $35 million and $39 million of amortization of the Palisades purchased power agreement in the nine months ended September 30, 2010 and 2009, respectively, which is non-cash revenue and is discussed in Note 15 to the financial statements in the Form 10-K. Following are key performance measures for Non-Utility Nuclear for the nine months ended September 30, 2010 and 2009:

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

	2010	2009

Net MW in operation at September 30	4,998	4,998
Average realized price per MWh	$59.27	$61.68
GWh billed	30,011	29,929
Capacity factor	92%	91%
Refueling Outage Days:
FitzPatrick	18	-
Indian Point 2	33	-
Indian Point 3	-	36
Palisades	-	41
Pilgrim	-	31
Vermont Yankee	29	-

The FitzPatrick refueling outage continued for 17 days into the fourth quarter 2010.

Other Income Statement Items

Utility

Other operation and maintenance expenses increased from $1,361 million for the nine months ended September 30, 2009 to $1,422 million for the nine months ended September 30, 2010 primarily due to:

an increase of $56 million in compensation and benefits costs, resulting from decreasing discount rates, the amortization of asset losses, and an increase in the accrual for incentive-based compensation. See Note 11 to the financial statements in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs;

·	an increase of $15 million in fossil expenses resulting from higher outage costs; and

·	an increase of $12.5 million due to the capitalization in 2009 of Ouachita Plant service charges previously expensed.

The increase was partially offset by decreases of $14 million due to higher write-offs of uncollectible customer accounts in 2009 and $10 million due to 2008 storm costs at Entergy Arkansas which were deferred per an APSC order and were recovered through revenues in 2009.

Other income decreased primarily due to a decrease of $42 million in carrying charges on storm restoration costs and a gain of $16 million recorded in 2009 on the sale of undeveloped real estate by Entergy Louisiana Properties, LLC. The decrease was partially offset by an increase of $13 million resulting from higher earnings on decommissioning trust funds and an increase of distributions of $7 million earned by Entergy Louisiana and $4 million earned by Entergy Gulf States Louisiana on investments in preferred membership interests of Entergy Holdings Company. The distributions on preferred membership interests are eliminated in consolidation and have no effect on net income because the investment is in another Entergy subsidiary. See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Hurricane Gustav and Hurricane Ike " for discussion of these investments in preferred membership interests.

Interest charges increased primarily due to an increase in long-term debt outstanding resulting from net debt issuances by certain of the Utility operating companies in the second half of 2009 and in 2010.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Non-Utility Nuclear

Other operation and maintenance expenses increased from $615 million for the nine months ended September 30, 2009 to $763 million for the nine months ended September 30, 2010 primarily due to:

·	the write-off of $58 million of capital costs, primarily for software that will not be utilized, and $12 million of additional costs incurred in connection with Entergy's decision to unwind the infrastructure created for the planned Non-Utility Nuclear spin-off transaction;

an increase of $39 million in compensation and benefits costs, resulting from decreasing discount rates, the amortization of asset losses, and an increase in the accrual for incentive-based compensation. See Note 11 to the financial statements in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs;

·	spending of $14 million related to tritium remediation work at the Vermont Yankee site; and

·	the write-off of $10 million of capitalized engineering costs associated with a potential uprate project.

Other income increased primarily due to $85 million in charges in 2009 resulting from the recognition of impairments that are not considered temporary of certain equity securities held in Non-Utility Nuclear's decommissioning trust funds, increases in realized earnings on the decommissioning trust funds, and interest income from loans to Entergy subsidiaries.

Interest charges increased primarily due to the write-off of $39 million of debt financing costs, primarily incurred for Enexus's $1.2 billion credit facility, in connection with Entergy's decision to unwind the infrastructure created for the planned Non-Utility Nuclear spin-off transaction. Partially offsetting the increase was a decrease in fees paid to Entergy Corporation for providing collateral in the form of guarantees in connection with some of Non-Utility Nuclear's agreements to sell power. The guarantee fees paid are intercompany transactions and are eliminated in consolidation.

Parent & Other

Other income decreased primarily due to:

·	an increase in the elimination for consolidation purposes of $17 million of interest income from Entergy subsidiaries; and

·	increases in the elimination for consolidation purposes of distributions earned of $7 million by Entergy Louisiana and $4 million by Entergy Gulf States Louisiana on investments in preferred membership interests of Entergy Holdings Company, as discussed above.

Interest charges decreased primarily due to lower borrowings, including the redemption of $267 million of notes payable in December 2009, as well as lower interest rates on borrowings under Entergy Corporation's revolving credit facility.

Income Taxes

The effective income tax rate for the nine months ended September 30, 2010 was 34.1%. The difference in the effective income tax rate versus the statutory rate of 35% for the nine months ended September 30, 2010 was primarily due to:

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

·	a $19 million tax benefit recorded in connection with Entergy's decision to unwind the infrastructure created for the planned Non-Utility Nuclear spin-off transaction resulting from implementation expenses that previously were not deductible for tax purposes;

·	the recognition of a $14 million Louisiana state income tax benefit related to storm cost financing; and

·	the reversal of a reserve of $13 million with respect to restructuring of business operations within the Non-Utility Nuclear segment.

Partially offsetting the decreased effective income tax rate was a charge of $16 million resulting from a change in tax law associated with the recently enacted federal healthcare legislation, as discussed below in "Critical Accounting Estimates" and state income taxes and certain book and tax differences for Utility plant items.

The effective income tax rate for the nine months ended September 30, 2009 was 36.4%. The difference in the effective income tax rate versus the statutory rate of 35% for the nine months ended September 30, 2009 was primarily due to increases related to state income taxes at the Utility operating companies and book and tax differences for utility plant items. These increases were partially offset by reductions related to:

·	an adjustment to state income taxes for Non-Utility Nuclear to reflect the effect of a change in the methodology of computing Massachusetts state income taxes as required by that state's taxing authority;

·	the recognition of state loss carryovers by the parent company, Entergy Corporation, that had been subject to a valuation allowance;

·	the recognition of a federal capital loss carryover by Entergy Asset Management, Inc. that had been subject to a valuation allowance; and

·	an additional deferred tax benefit associated with writedowns on nuclear decommissioning qualified trust securities.

Liquidity and Capital Resources

See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy's capital structure, capital expenditure plans and other uses of capital, and sources of capital. Following are updates to that discussion.

Capital Structure

Entergy's capitalization is balanced between equity and debt, as shown in the following table.

	September 30, 2010	December 31, 2009

Debt to capital	57.5%	57.4%
Effect of excluding the Arkansas and Texas securitization bonds	(1.9)%	(1.8)%
Debt to capital, excluding the securitization bonds (1)	55.6%	55.6%
Effect of subtracting cash from debt	(4.7)%	(4.1)%
Net debt to net capital, excluding the securitization bonds (1)	50.9%	51.5%

(1)	Calculation excludes the Arkansas and Texas securitization bonds, which are non-recourse to Entergy Arkansas and Entergy Texas, respectively.

Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable, capital lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt, common shareholders' equity, and subsidiaries' preferred stock without sinking fund. Net capital consists of capital less cash and cash equivalents. Entergy uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy's financial condition.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

As discussed in the Form 10-K, Entergy Corporation has in place a revolving credit facility that expires in August 2012. Entergy Corporation has the ability to issue letters of credit against the total borrowing capacity of the facility. As of September 30, 2010, the capacity and amounts outstanding under the credit facility are:

Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)

$3,472	$1,775	$25	$1,672

Entergy Corporation's credit facility requires it to maintain a consolidated debt ratio of 65% or less of its total capitalization. The calculation of this debt ratio under Entergy Corporation's credit facility and in the indenture governing the Entergy Corporation senior notes is different than the calculation of the debt to capital ratio above. Entergy is currently in compliance with this covenant. If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Utility operating companies (except Entergy New Orleans) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the facility's maturity date may occur, and there may be an acceleration of amounts due under Entergy Corporation's senior notes.

See Note 4 to the financial statements herein for additional discussion of the Entergy Corporation credit facility and discussion of the Registrant Subsidiaries' credit facilities.

Capital Expenditure Plans and Other Uses of Capital

See the table and discussion in the Form 10-K under "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Capital Expenditure Plans and Other Uses of Capital," that sets forth the amounts of planned construction and other capital investments by operating segment for 2010 through 2012. See Part II, Item 5 in this report for an update regarding Entergy Arkansas’s White Bluff project. Following are additional updates to the discussion in the Form 10-K.

Entergy is developing its capital plan for 2011 through 2013 and currently anticipates that the Utility will make $6.3 billion in capital investments during that period, including approximately $2.7 billion for maintenance of existing assets, and that Entergy Wholesale Commodities, which includes Non-Utility Nuclear, will make $1.1 billion in capital investments during that period, including approximately $0.3 billion for maintenance of existing assets. The remaining $3.6 billion of Utility investments is associated with specific investments such as the utility's portfolio transformation strategy including the Acadia Unit 2 purchase and three resources identified in the Summer 2009 Request for Proposal, including a self-build option at Entergy Louisiana's Ninemile site, replacement of the Waterford 3 steam generators, environmental compliance spending, an approximate 178 MW uprate project at Grand Gulf, transmission upgrades, and spending to comply with NERC transmission planning rules. The remaining $0.8 billion of Entergy Wholesale Commodities investments is associated with specific investments such as dry cask storage, nuclear license renewal efforts, component replacement across the fleet, NYPA value sharing, wedgewire screens at Indian Point, and spending in response to the Indian Point Independent Safety Evaluation.

Acadia Unit 2 Purchase Agreement

As discussed more fully in the Form 10-K, in October 2009, Entergy Louisiana announced that it has signed an agreement to acquire Unit 2 of the Acadia Energy Center, a 580 MW generating unit located near Eunice, La., from Acadia Power Partners, LLC, an independent power producer. Entergy Louisiana and Acadia Power Partners also have entered into two purchase power agreements that are intended to provide access to the capacity and energy output of the unit during the period before the acquisition closes. The initial purchase power agreement was a call option agreement that commenced on June 1, 2010 and terminated on September 30, 2010. Beginning October 1, 2010, Entergy Louisiana began purchasing 100 percent of the output of Acadia Unit 2 under a tolling agreement. The LPSC has approved both purchase power agreements. Entergy Louisiana's purchase of the plant is contingent upon, among other things, obtaining necessary approvals, including full cost recovery, from various federal and state regulatory and permitting agencies. The parties have agreed to a procedural schedule for review of the acquisition that includes a hearing before the ALJ in December 2010. Currently the closing is expected to occur in early 2011.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Little Gypsy Repowering Project

See the Form 10-K for a discussion of the Little Gypsy repowering project. In October 2009, Entergy Louisiana made a filing with the LPSC seeking permission to cancel the project and seeking recovery over a five-year period of the project costs. In June 2010 and August 2010, the LPSC Staff and Intervenors filed testimony. The LPSC Staff (1) agreed that it was prudent to move the project from long-term suspension to cancellation and that the timing of the decision to suspend on a longer-term basis was not imprudent; (2) indicated that, except for $0.8 million in compensation-related costs, the costs incurred should be deemed prudent; (3) recommended recovery from customers over ten years but stated that the LPSC may want to consider 15 years; (4) allowed for recovery of carrying costs and earning a return on project costs, but at a reduced rate approximating the cost of debt, while also acknowledging that the LPSC may consider ordering no return; and (5) indicated that Entergy Louisiana should be directed to securitize project costs, if legally feasible and in the public interest. In the third quarter 2010, in accordance with accounting standards, Entergy Louisiana determined that it is probable that the Little Gypsy repowering project will be abandoned and accordingly has reclassified $199.8 million of project costs from construction work in progress to a regulatory asset. This accounting reclassification does not modify Entergy Louisiana’s requested relief pending before the LPSC. The procedural schedule calls for hearings to begin in November 2010.

There currently is pending before the LPSC an appeal by the LPSC Staff of a decision by the ALJ relating to a dispute between the LPSC Staff and industrial customer intervenors relating to positions regarding the allocation of the project costs among customers. The LPSC is expected to review this appeal at its November 10, 2010 meeting. The ALJ has determined that the hearings in the underlying case will begin on the date currently scheduled and that all issues other than cost allocation will be heard at that time. A status conference will be held on November 12, 2010 to determine the hearing schedule for the cost allocation issue. The record from the original hearing will be held open until the conclusion of the hearing on cost allocation.

Dividends and Stock Repurchases

In the fourth quarter 2009 the Board granted authority for a $750 million share repurchase program. As discussed above, at the same time that it announced its plans to unwind the business infrastructure associated with the proposed spin-off of the Non-Utility Nuclear business, Entergy also announced in April 2010 that it expected to execute on the $750 million share repurchase program and also declared that its next quarterly dividend on its common shares would be $0.83 per share, an increase from the previous $0.75 per share. The amount of repurchases may vary as a result of material changes in business results or capital spending or new investment opportunities. Entergy expects to complete the $750 million share repurchase program by the end of 2010.

In October 2010 the Board granted authority for an additional $500 million share repurchase program.

Sources of Capital

Entergy Arkansas January 2009 Ice Storm

As discussed in the Form 10-K, in January 2009 a severe ice storm caused significant damage to Entergy Arkansas's transmission and distribution lines, equipment, poles, and other facilities. A law was enacted in April 2009 in Arkansas that authorizes securitization of storm damage restoration costs. In June 2010 the APSC issued a financing order authorizing the issuance of storm cost recovery bonds, including carrying costs of $11.5 million and $4.6 million of up-front financing costs. See Note 4 to the financial statements herein for a discussion of the August 2010 issuance of the securitization bonds.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Hurricane Gustav and Hurricane Ike

As discussed in the Form 10-K, in September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to Entergy's service territory. Entergy Gulf States Louisiana and Entergy Louisiana filed their Hurricane Gustav and Hurricane Ike storm cost recovery case with the LPSC in May 2009. In September 2009, Entergy Gulf States Louisiana and Entergy Louisiana and the Louisiana Utilities Restoration Corporation (LURC), an instrumentality of the State of Louisiana, filed with the LPSC an application requesting that the LPSC grant financing orders authorizing the financing of Entergy Gulf States Louisiana’s and Entergy Louisiana’s storm costs, storm reserves, and issuance costs pursuant to Act 55 of the Louisiana Regular Session of 2007 (Act 55 financings). Entergy Gulf States Louisiana’s and Entergy Louisiana’s Hurricane Katrina and Hurricane Rita storm costs were financed primarily by Act 55 financings, as discussed in the Form 10-K. Entergy Gulf States Louisiana and Entergy Louisiana also filed an application requesting LPSC approval for ancillary issues including the mechanism to flow charges and Act 55 financing savings to customers via a Storm Cost Offset rider. On December 30, 2009, Entergy Gulf States Louisiana and Entergy Louisiana entered into a stipulation agreement with the LPSC Staff that provides for total recoverable costs of approximately $234 million for Entergy Gulf States Louisiana and $394 million for Entergy Louisiana, including carrying costs. Under this stipulation, Entergy Gulf States Louisiana agrees not to recover $4.4 million and Entergy Louisiana agrees not to recover $7.2 million of their storm restoration spending. The stipulation also permits replenishing Entergy Gulf States Louisiana's storm reserve in the amount of $90 million and Entergy Louisiana's storm reserve in the amount of $200 million when the Act 55 financings are accomplished. In March and April 2010, Entergy Gulf States Louisiana, Entergy Louisiana, and other parties to the proceeding filed with the LPSC an uncontested stipulated settlement that includes these terms and also includes Entergy Gulf States Louisiana’s and Entergy Louisiana's proposals under the Act 55 financings, which includes a commitment to pass on to customers a minimum of $15.5 million and $27.75 million of customer benefits, respectively, through prospective annual rate reductions of $3.1 million and $5.55 million, respectively, for five years. A stipulation hearing was held before the ALJ on April 13, 2010. On April 21, 2010, the LPSC approved the settlement and subsequently issued two financing orders and one ratemaking order intended to facilitate the implementation of the Act 55 financings. In June 2010 the Louisiana State Bond Commission approved the Act 55 financings.

On July 22, 2010, the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) issued $468.9 million in bonds under Act 55. From the $462.4 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $200 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $262.4 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana used $262.4 million to acquire 2,624,297.11 Class B preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2010, and the membership interests have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion.

On July 22, 2010, the LCDA issued another $244.1 million in bonds under Act 55. From the $240.3 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $90 million in a restricted escrow account as a storm damage reserve for Entergy Gulf States Louisiana and transferred $150.3 million directly to Entergy Gulf States Louisiana. From the bond proceeds received by Entergy Gulf States Louisiana from the LURC, Entergy Gulf States Louisiana used $150.3 million to acquire 1,502,643.04 Class B preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2010, and the membership interests have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana do not report the bonds on their balance sheets because the bonds are the obligation of the LCDA, and there is no recourse against Entergy, Entergy Gulf States Louisiana or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Gulf States Louisiana and Entergy Louisiana collect a system restoration charge on behalf of the LURC, and remit the collections to the bond indenture trustee. Entergy Gulf States Louisiana and Entergy Louisiana do not report the collections as revenue because they are merely acting as the billing and collection agents for the state.

Harrison County Plant

Entergy's non-nuclear wholesale assets business intends to sell for $219 million its 60.9% undivided ownership interest in the 550MW Harrison County plant to two Texas electric cooperatives that currently own the minority share of the plant. The sale is subject to FERC and other regulatory approvals, in addition to certain other conditions.

Cash Flow Activity

As shown in Entergy's Consolidated Statements of Cash Flows, cash flows for the nine months ended September 30, 2010 and 2009 were as follows:

	2010	2009
	(In Millions)

Cash and cash equivalents at beginning of period	$1,710	$1,920

Cash flow provided by (used in):
Operating activities	3,165	2,009
Investing activities	(1,995)	(1,447)
Financing activities	(949)	(1,351)
Net increase (decrease) in cash and cash equivalents	221	(789)

Cash and cash equivalents at end of period	$1,931	$1,131

Operating Activities

Entergy's cash flow provided by operating activities increased by $1,156 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, primarily due to the receipt in July 2010 of $703 million from the Louisiana Utilities Restoration Corporation as a result of the Louisiana Act 55 storm cost financings for Hurricane Gustav and Hurricane Ike. The Act 55 storm cost financings are discussed in more detail above and also in Note 2 to the financial statements herein. In addition, the absence of the Hurricane Gustav, Hurricane Ike, and Arkansas ice storm restoration spending that occurred in 2009 and an increase in Utility net revenue in 2010 also contributed to the increase. These increases were partially offset by decreased collection of fuel costs in 2010 due to the increase in the overall fuel and purchased power prices outpacing changes in Entergy's fuel rates, along with an $87.8 million fuel cost refund made by Entergy Texas in the first quarter 2010 that is discussed further in Note 2 to the financial statements in the Form 10-K. The change in operating cash flow provided by the Non-Utility Nuclear business was relatively flat.

Investing Activities

Net cash used in investing activities increased by $548 million for nine months ended September 30, 2010 compared to the nine months ended September 30, 2009, primarily due to:

·	an increase in nuclear fuel purchases, which was caused by the consolidation of the nuclear fuel company variable interest entities that is discussed in Note 12 to the financial statements herein;

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

·	the investment of a total of $290 million in Entergy Gulf States Louisiana's and Entergy Louisiana's storm reserve escrow accounts as a result of their Act 55 storm cost financings, which are discussed in Note 2 to the financial statements herein; and

an increase in construction expenditures, primarily in the Non-Utility Nuclear business, as decreases for the Utility resulting from Hurricane Gustav, Hurricane Ike, and Arkansas ice storm restoration spending in 2009 were offset by spending on various projects. Entergy's construction spending plans for 2010 through 2012 were discussed in the Form 10-K.

The effect of this activity was partially offset by a net amount of $114 million of collateral deposits received from Non-Utility Nuclear counterparties during 2010. Non-Utility Nuclear's forward sales contracts are discussed in the Market and Credit Risk Sensitive Instruments section below.

Financing Activities

Net cash used in financing activities decreased by $402 million for the nine months ended September 30, 2010 compared to the nine months ended September 30, 2009 primarily because long-term debt activity provided approximately $158 million of cash in 2010 and used approximately $303 million of cash in 2009. For details of Entergy's long-term debt activity in 2010 see Note 4 to the financial statements herein.

Rate, Cost-recovery, and Other Regulation

See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Rate, Cost-recovery, and Other Regulation" in the Form 10-K for discussions of rate regulation, federal regulation, and related regulatory proceedings.

State and Local Rate Regulation and Fuel-Cost Recovery

See Note 2 to the financial statements herein for updates to the discussion in the Form 10-K regarding these proceedings.

Federal Regulation

See the Form 10-K for a discussion of federal regulatory proceedings. Following are updates to that discussion.

System Agreement Proceedings

Rough Production Cost Equalization Rates

2010 Rate Filing Based on Calendar Year 2009 Production Costs

In May 2010, Entergy filed with the FERC the 2010 rates in accordance with the FERC's orders in the System Agreement proceeding. The filing, as supplemented in September 2010, shows the following payments/receipts among the Utility operating companies for 2010, based on calendar year 2009 production costs, commencing for service in June 2010, are necessary to achieve rough production cost equalization under the FERC's orders:

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$41.6
Entergy Gulf States Louisiana	$-
Entergy Louisiana	($22.2)
Entergy Mississippi	($19.4)
Entergy New Orleans	$-
Entergy Texas	$-

Several parties intervened in the proceeding at the FERC, including the LPSC and the City Council, which have also filed protests. In July 2010 the FERC accepted Entergy's proposed rates for filing, effective June 1, 2010, subject to refund, and set the proceeding for hearing and settlement procedures. Settlement procedures have been terminated, and the ALJ scheduled hearings to begin in March 2011, with an initial decision scheduled for July 2011.

2009 Rate Filing Based on Calendar Year 2008 Production Costs

Several parties intervened in the 2009 rate proceeding at the FERC, including the LPSC and Ameren, which have also filed protests. In July 2009 the FERC accepted Entergy's proposed rates for filing, effective June 1, 2009, subject to refund, and set the proceeding for hearing and settlement procedures. Settlement procedures were terminated and a hearing before the ALJ was held in April 2010. In August 2010 the ALJ issued an initial decision. The initial decision substantially affirms Entergy's position in the filing, except for one issue that may result in some reallocation of costs among the Utility operating companies. The LPSC, the FERC trial staff, and Entergy have submitted briefs on exceptions in the proceeding.

Interruptible Load Proceeding

As discussed in more detail in the Form 10-K, in April 2007 the U.S. Court of Appeals for the D.C. Circuit issued its opinion in the LPSC's appeal of the FERC's March 2004 and April 2005 orders related to the treatment under the System Agreement of the Utility operating companies' interruptible loads. The D.C. Circuit remanded the matter to the FERC for a more considered determination on the issue of refunds. The FERC issued its order on remand in September 2007, in which it directed Entergy to make a compliance filing removing all interruptible load from the computation of peak load responsibility commencing April 1, 2004 and to issue any necessary refunds to reflect this change. In addition, the order directed the Utility operating companies to make refunds for the period May 1995 through July 1996. In November 2007 the Utility operating companies filed a refund report describing the refunds to be issued pursuant to the FERC's orders. The LPSC filed a protest to the refund report in December 2007, and the Utility operating companies filed an answer to the protest in January 2008. The refunds have been made by the Utility operating companies that owed refunds to the Utility operating companies that were due a refund under the decision.

Following the filing of petitioners' initial briefs, the FERC filed a motion requesting the D.C. Circuit hold the appeal of the FERC's decisions ordering refunds in the interruptible load proceeding in abeyance and remand the record to the FERC. The D.C. Circuit granted the FERC's unopposed motion on June 24, 2009, and directed the FERC to file status reports at 60-day intervals beginning August 24, 2009. The D.C. Circuit also directed the parties to file motions to govern future proceedings in the case within 30 days of the completion of the FERC proceedings. In December 2009 the FERC established a paper hearing to determine whether the FERC had the authority and, if so, whether it would be appropriate to order refunds resulting from changes in the treatment of interruptible load in the allocation of capacity costs by the Utility operating companies. In August 2010 the FERC issued an order stating that it has the authority and refunds are appropriate. The APSC, MPSC, and Entergy have requested rehearing of the FERC's decision. In September 2010, the FERC set for hearing and settlement judge procedures the Utility operating companies' calculation of the refunds for the 15-month refund period of May 14, 1995 through August 13, 1996, as contained in the November 2007 refund report. The purpose of the hearing is to determine whether the refund amounts for such period were calculated in a just and reasonable manner.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Entergy Arkansas and Entergy Mississippi Notices of Termination of System Agreement Participation and Related APSC Investigation

In February 2010 the APSC issued an order announcing a refocus of its ongoing investigation of Entergy Arkansas's post-System Agreement operation. The order describes the APSC's "stated purpose in opening this inquiry to conduct an investigation regarding the prudence of [Entergy Arkansas] entering into a successor ESA [Entergy System Agreement] as opposed to becoming a stand-alone utility upon its exit from the ESA, and whether [Entergy Arkansas], as a standalone utility, should join the SPP RTO. It is the [APSC's] intention to render a decision regarding the prudence of [Entergy Arkansas] entering into a successor ESA as opposed to becoming a stand-alone utility upon its exit from the ESA, as well as [Entergy Arkansas'] RTO participation by the end of calendar year 2010. In parallel with this Docket, the [APSC] will be actively involved and will be closely watching to see if any meaningful enhancement will be made to a new Enhanced Independent Coordinator of Transmission (“E-ICT") Agreement through the efforts of the [Entergy Transmission System] stakeholders, Entergy, and the newly formed and federally-recognized [Entergy Regional State Committee] in 2010." Later, in April 2010, the APSC issued an order that directs Entergy Arkansas also to consider joining the Midwest ISO RTO as a stand-alone utility.

Entergy Arkansas filed testimony and participated in a March 2010 evidentiary hearing in the proceeding. Entergy Arkansas noted in its testimony that it is not reasonable to complete a comprehensive evaluation of strategic options by the end of 2010 and that forcing a decision would place parties in the untenable position of making critical decisions based on insufficient information. Entergy Arkansas outlined three options for post-System Agreement operation of its electrical system: 1) Entergy Arkansas self providing its generation planning and operating functions as a stand-alone company; 2) Entergy Arkansas plus new coordination agreements with third parties in which Entergy Arkansas self provides some planning and operations functions, but also enters into one or more coordinating or pooling agreements with third parties; and 3) Successor Arrangements under which Entergy Arkansas plans for its own generation resources but enters into a new generation commitment and dispatch agreement with other Utility operating companies under a successor agreement intended to avoid the litigation previously experienced. Entergy Arkansas’s plan is expected to lead to a decision in late 2011 regarding which option to implement; however, Entergy Arkansas anticipates pursuing in 2010-2011 several elements that are common to all options. In an attempt to reach understanding of complex issues, Entergy Arkansas proposed to hold a series of technical conferences targeting specific subjects. The first three technical conferences were held in May, July, and September 2010. Another evidentiary hearing in the proceeding was held in August 2010 during which the APSC directed the parties to work together to reach an agreement on a proposed procedural schedule for the proceeding.

On August 31, 2010, the APSC issued an order rejecting the procedural schedule agreed upon by the parties and substituting a procedural schedule that, among other things: (1) requires Entergy Arkansas to file its final assessment and recommendations regarding each of the viable strategic reorganization options by April 22, 2011; and (2) would result in a final order issued by the APSC resolving all issues raised by the parties on or about October 7, 2011. Entergy Arkansas has sought clarification of certain aspects of the order. Since issuance of the order, Entergy Arkansas provided the APSC with an initial draft of successor arrangements on September 16, 2010. Additional technical conferences are scheduled in November 2010 and January 2011, and a hearing is scheduled to commence in August 2011.

In early April 2010, Entergy Corporation and the Utility operating companies determined in connection with their decision-making process that it is appropriate to agree and commit that no Utility operating company will enter voluntarily into successor arrangements with the other Utility operating companies if its retail regulator finds successor arrangements are not in the public interest. Hugh McDonald, chief executive officer of Entergy Arkansas, notified the APSC of this decision, and explained the decision and commitment, in a letter filed with the APSC on April 26, 2010.

The Utility operating companies continue to meet with various interested parties to discuss a proposed framework for successor arrangements to the current System Agreement, which is being pursued in parallel with evaluation by the Entergy Regional State Committee of the Southwest Power Pool RTO, Midwest ISO RTO, and modified ICT alternatives, which are discussed below. An initial draft of the successor arrangements was provided to state regulators on September 16, 2010.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

June 2009 LPSC Complaint Proceeding

See the Form 10-K for a discussion of the complaint that the LPSC filed in June 2009 requesting that the FERC determine that certain of Entergy Arkansas's sales of electric energy to third parties: (a) violated the provisions of the System Agreement that allocate the energy generated by Entergy System resources, (b) imprudently denied the Entergy System and its ultimate consumers the benefits of low-cost Entergy System generating capacity, and (c) violated the provision of the System Agreement that prohibits sales to third parties by individual companies absent an offer of a right-of-first-refusal to other Utility operating companies. In April 2010 the LPSC filed direct testimony in the proceeding alleging, among other things, (1) that Entergy violated the System Agreement by permitting Entergy Arkansas to make non-requirements sales to non-affiliated third parties rather than making such energy available to the other Utility operating companies’ customers; and (2) that over the period 2000 – 2009, these non-requirements sales caused harm to the Utility operating companies’ customers of $144.4 million and these customers should be compensated for this harm by Entergy’s shareholders. The Utility operating companies believe the LPSC's allegations are without merit. A hearing in the matter was held in August 2010.

Independent Coordinator of Transmission (ICT)

See the Form 10-K for a discussion of Entergy's ICT and transmission issues. As discussed in the Form 10-K, the Entergy Regional State Committee (E-RSC), which is comprised of representatives from all of the Utility operating companies' retail regulators, has been formed to consider several of these issues related to Entergy's transmission system. Among other things, the E-RSC in concert with the FERC plan to conduct a cost/benefit analysis comparing the ICT arrangement and a proposal under which Entergy would join the Southwest Power Pool RTO. The scope of the study was expanded in July 2010 to consider Entergy joining the Midwest ISO RTO as another alternative. The E-RSC is also considering proposed modifications to the ICT arrangement that could be implemented commencing November 2010, when the initial term of the ICT ends.

In September 2010, as modified in October 2010, the Utility operating companies filed a request for a two-year interim extension, with certain modifications, of the ICT arrangement, which currently expires on November 17, 2010. The filing stated that, if approved by the E-RSC during its October 20-21, 2010 meeting, the Utility operating companies will make a subsequent filing with the FERC to provide the E-RSC with the authority to, upon unanimous approval of all E-RSC members, (1) propose modifications to cost allocation methodology for transmission projects and (2) add transmission projects to the construction plan. On October 13, 2010, the LPSC issued an order approving proposals filed by Entergy Louisiana and Entergy Gulf States Louisiana to modify the current ICT arrangement and to give the E-RSC authority in the two areas as described above. On October 20, 2010, the E-RSC unanimously voted in favor of the proposal granting the E-RSC authority in the two areas described above. The Utility operating companies have filed the necessary revisions to the Entergy OATT to implement the E-RSC's new authority.

On September 30, 2010, the consultant presented its cost/benefit analysis of the Entergy and Cleco regions joining the SPP RTO. The cost/benefit analysis indicates that the Entergy region, including entities beyond the Utility operating companies, would realize a net cost of $438 million to a net benefit of $387 million, primarily depending upon transmission cost allocation issues. Addendum studies, including studies related to Entergy Arkansas and the Utility operating companies joining the Midwest ISO, are due to be completed by the end of first quarter 2011.

FERC Audit

The Division of Audits in the Office of Enforcement and the Division of Compliance in the Office of Reliability of the FERC jointly commenced an audit of Entergy Services, Inc. on October 1, 2009. The audit evaluated Entergy Services': (1) practices related to Bulk Electric System planning and operations; (2) compliance with the requirements contained within its Open Access Transmission Tariff; and (3) other obligations and responsibilities as

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

approved by the FERC. The audit covered the period from April 1, 2006 to July 19, 2010. The FERC Division of Audits issued its audit report on October 29, 2010, in which it finds instances of non-compliance primarily related to the use of secondary network service and reporting requirements applicable to available flowgate capacity errors. Although Entergy Services does not agree with a number of the report's factual findings, Entergy Services and the FERC audit staff reached agreement on the recommendations in the audit report and Entergy Services will work to implement them. The Energy Policy Act of 2005 provides the FERC with authority to impose civil penalties for violations of the Federal Power Act and FERC regulations, but the audit report did not recommend the imposition of civil penalties.

U.S. Department of Justice Investigation

Entergy is cooperating with the U.S. Department of Justice on a civil investigation of competitive issues concerning certain practices and policies of the Utility operating companies. Entergy became aware of the investigation during the required Hart-Scott-Rodino antitrust review of Entergy Louisiana's pending purchase of Unit 2 of the Acadia Energy Center. Although the U.S. Department of Justice recently informed Entergy Louisiana that it will allow the relevant Hart-Scott-Rodino waiting period to expire without action (and that period has since expired), the U.S. Department of Justice also informed Entergy that it has opened a civil investigation of competitive issues concerning certain generation procurement, dispatch, and transmission system practices and policies of the Utility operating companies. The U.S. Department of Justice's present inquiry has no effect on the Hart-Scott-Rodino clearance of the Acadia acquisition.

Market and Credit Risk Sensitive Instruments

Commodity Price Risk

Power Generation

As discussed more fully in the Form 10-K, the sale of electricity from the power generation plants owned by Entergy's Non-Utility Nuclear business, unless otherwise contracted, is subject to the fluctuation of market power prices. Following is an updated summary of the amount of the Non-Utility Nuclear business's output that is currently sold forward under physical or financial contracts (2010 represents the remainder of the year):

	2010	2011	2012	2013	2014	2015
Non-Utility Nuclear:
Percent of planned generation sold forward:
Unit-contingent (1)	57%	78%	50%	25%	14%	12%
Unit-contingent with availability guarantees (2)	33%	17%	14%	6%	3%	3%
Firm LD (3)	0%	3%	14%	0%	8%	0%
Offsetting positions (4)	0%	(3)%	(2)%	0%	0%	0%
Total (net)	90%	95%	76%	31%	25%	15%
Planned generation (TWh) (5)	10	41	41	40	41	41
Average contracted price per MWh (6)	$57	$53	$50	$49	$51	$51

(1)	Unit-contingent is a transaction under which power is supplied from a specific generation asset; if the asset is not operating, seller is generally not liable to buyer for any damages.
(2)	Unit-contingent with availability guarantees is a transaction under which power is supplied from a specific generation asset; if the asset is not operating, seller is generally not liable to buyer for any damages, unless the actual availability over a specified period of time is below an availability threshold specified in the contract.

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

(3)	Firm LD is a transaction that requires receipt or delivery of energy at a specified delivery point (usually at a market hub not associated with a specific asset) or settles financially on notional quantities; if a party fails to deliver or receive energy, the defaulting party must compensate the other party as specified in the contract.
(4)	Offsetting positions are transactions for the purchase of energy, generally to offset a Firm LD transaction that was used as a placeholder until a unit-contingent transaction could be originated and executed.
(5)	Assumes successful license renewal for all plants.
(6)	The Vermont Yankee acquisition included a PPA under which the former owners will buy most of the power produced by the plant through the expiration in 2012 of the current operating license for the plant. The PPA includes an adjustment clause under which the prices specified in the PPA will be adjusted downward monthly if twelve month rolling average power market prices drop below prices specified in the PPA, which has not happened thus far.

Some of the agreements to sell the power produced by Entergy's Non-Utility Nuclear power plants contain provisions that require an Entergy subsidiary to provide collateral to secure its obligations under the agreements. The Entergy subsidiary is required to provide collateral based upon the difference between the current market and contracted power prices in the regions where Non-Utility Nuclear sells power. The primary form of collateral to satisfy these requirements is an Entergy Corporation guaranty. Cash and letters of credit are also acceptable forms of collateral. At September 30, 2010, based on power prices at that time, Entergy had credit exposure of $1 million under the guarantees in place supporting Entergy Nuclear Power Marketing (a Non-Utility Nuclear subsidiary) transactions, $20 million of guarantees that support letters of credit, and $3 million of posted cash collateral. As of September 30, 2010, the credit exposure associated with Non-Utility Nuclear assurance requirements would increase by $17 million for a $1 per MMBtu increase in gas prices in both the short-and long-term markets. In the event of a decrease in Entergy Corporation's credit rating to below investment grade, based on power prices as of September 30, 2010, Entergy would have been required to provide approximately $65 million of additional cash or letters of credit under some of the agreements.

As of September 30, 2010, the counterparties or their guarantors for 99.6% of the planned energy output under contract for Non-Utility Nuclear through 2014 have public investment grade credit ratings and 0.4% is with load-serving entities without public credit ratings.

In addition to selling the power produced by its plants, Non-Utility Nuclear sells unforced capacity that is used to meet requirements placed on load-serving distribution companies by the ISO in their area. Following is a summary of the amount of Non-Utility Nuclear's unforced capacity that is currently sold forward, and the blended amount of Non-Utility Nuclear's planned generation output and unforced capacity that is currently sold forward (2010 represents the remainder of the year):

	2010	2011	2012	2013	2014	2015
Non-Utility Nuclear:
Percent of capacity sold forward (net):
Bundled capacity and energy contracts	27%	26%	18%	16%	16%	16%
Capacity contracts	57%	31%	29%	26%	10%	0%
Total	84%	57%	47%	42%	26%	16%
Planned net MW in operation	4,998	4,998	4,998	4,998	4,998	4,998
Average capacity contract price per kW per month	$2.4	$3.0	$3.0	$2.8	$2.7	$-
Blended Capacity and Energy (based on revenues)
% of planned generation and capacity sold forward	93%	95%	77%	33%	26%	14%
Average contract revenue per MWh	$59	$55	$52	$52	$53	$51

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Critical Accounting Estimates

See "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy's accounting for nuclear decommissioning costs, unbilled revenue, impairment of long-lived assets and trust fund investments, qualified pension and other postretirement benefits, and other contingencies. Following is an update to that discussion. For an update regarding the impairment of long-lived assets discussion concerning Vermont Yankee see Note 11 to the financial statements herein.

Federal Healthcare Legislation

The Patient Protection and Affordable Care Act (PPACA) became federal law on March 23, 2010, and, on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 became federal law and amended certain provisions of the PPACA. These new federal laws change the law governing employer-sponsored group health plans, like Entergy's plans. All of the effects of these changes are not yet determinable because technical guidance regarding application must still be issued, and Entergy will monitor these developments.

One provision of the new law that is effective in 2013 eliminates the federal income tax deduction for prescription drug expenses of Medicare beneficiaries for which the plan sponsor also receives the retiree drug subsidy under Part D. Entergy receives subsidy payments under the Medicare Part D plan and therefore in the first quarter 2010 recorded a reduction to the deferred tax asset related to the unfunded other postretirement benefit obligation. The offset was recorded as a $16 million charge to income tax expense or, for the Utility, including each Registrant Subsidiary, as a regulatory asset, as detailed in Note 2 to the financial statements herein.

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 2010 and 2009
(Unaudited)

	Three Months Ended						Nine Months Ended
	2010			2009			2010			2009
	(In Thousands, Except Share Data)

OPERATING REVENUES
Electric	$	2,638,752		$	2,195,461		$	6,859,791		$	6,140,823
Natural gas		27,263			24,030			154,426			126,914
Competitive businesses		666,161			717,604			1,940,256			1,979,259
TOTAL		3,332,176			2,937,095			8,954,473			8,246,996

OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		748,863			559,129			1,939,077			1,927,692
Purchased power		484,694			388,308			1,376,055			1,034,483
Nuclear refueling outage expenses		64,885			61,441			191,395			178,454
Other operation and maintenance		808,688			681,576			2,211,382			2,021,462
Decommissioning		53,380			50,069			157,423			148,119
Taxes other than income taxes		138,217			128,851			400,597			385,649
Depreciation and amortization		264,621			280,641			789,392			799,183
Other regulatory charges (credits) - net		(1,814	)		(13,224	)		15,555			(29,371	)
TOTAL		2,561,534			2,136,791			7,080,876			6,465,671

OPERATING INCOME		770,642			800,304			1,873,597			1,781,325

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction		15,064			14,770			45,990			47,499
Interest and dividend income		38,911			64,730			123,124			170,007
Other than temporary impairment losses		(206	)		(457	)		(1,255	)		(85,396	)
Miscellaneous - net		(14,748	)		5,739			(32,050	)		(20,910	)
TOTAL		39,021			84,782			135,809			111,200

INTEREST AND OTHER CHARGES
Interest on long-term debt		126,078			130,132			420,314			383,255
Other interest - net		9,997			22,625			43,140			69,406
Allowance for borrowed funds used during construction		(8,949	)		(8,252	)		(27,274	)		(26,547	)
TOTAL		127,126			144,505			436,180			426,114

INCOME BEFORE INCOME TAXES		682,537			740,581			1,573,226			1,466,411

Income taxes		184,636			280,414			536,227			534,101

CONSOLIDATED NET INCOME		497,901			460,167			1,036,999			932,310

Preferred dividend requirements of subsidiaries		5,015			4,998			15,048			14,993

NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION	$	492,886		$	455,169		$	1,021,951		$	917,317


Earnings per average common share:
Basic	$	2.65		$	2.35		$	5.44		$	4.73
Diluted	$	2.62		$	2.32		$	5.38		$	4.66
Dividends declared per common share	$	0.83		$	0.75		$	2.41		$	2.25

Basic average number of common shares outstanding		185,962,431			193,424,904			187,968,582			194,044,214
Diluted average number of common shares outstanding		187,777,172			195,875,241			189,914,439			197,382,562

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)

	2010			2009
	(In Thousands)

OPERATING ACTIVITIES
Consolidated net income	$	1,036,999		$	932,310
Adjustments to reconcile consolidated net income to net cash flow
provided by operating activities:
Reserve for regulatory adjustments		360			(1,080	)
Other regulatory charges (credits) - net		15,555			(29,371	)
Depreciation, amortization, and decommissioning, including nuclear fuel amortization		1,259,543			1,076,115
Deferred income taxes, investment tax credits, and non-current taxes accrued		524,359			512,795
Changes in working capital:
Receivables		(243,326	)		14,856
Fuel inventory		3,328			9,830
Accounts payable		44,348			(189,586	)
Taxes accrued		-			46,931
Interest accrued		(10,982	)		(12,176	)
Deferred fuel		(65,655	)		196,111
Other working capital accounts		(117,086	)		(117,671	)
Provision for estimated losses and reserves		258,962			(10,326	)
Changes in other regulatory assets		482,960			(332,547	)
Changes in pensions and other postretirement liabilities		(142,420	)		(52,714	)
Other		118,144			(34,146	)
Net cash flow provided by operating activities		3,165,089			2,009,331

INVESTING ACTIVITIES
Construction/capital expenditures		(1,410,708	)		(1,342,840	)
Allowance for equity funds used during construction		45,990			47,499
Nuclear fuel purchases		(315,780	)		(291,721	)
Proceeds from sale/leaseback of nuclear fuel		-			197,706
Proceeds from sale of assets and businesses		9,675			39,054
Insurance proceeds received for property damages		7,894			32,914
Changes in transition charge account		(23,182	)		(8,359	)
NYPA value sharing payment		(72,000	)		(72,000	)
Payments to storm reserve escrow account		(294,901	)		(5,262	)
Receipts from storm reserve escrow account		9,925			-
Decrease in other investments		117,696			29,567
Proceeds from nuclear decommissioning trust fund sales		1,974,008			1,733,370
Investment in nuclear decommissioning trust funds		(2,043,361	)		(1,807,589	)
Net cash flow used in investing activities		(1,994,744	)		(1,447,661	)

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2010 and 2009
(Unaudited)

	2010			2009
	(In Thousands)

FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt		2,272,224			781,497
Common stock and treasury stock		45,763			17,215
Retirement of long-term debt		(2,113,927	)		(1,084,732	)
Repurchase of common stock		(665,624	)		(613,125	)
Redemption of preferred stock		-			(1,847	)
Changes in credit line borrowings - net		(18,932	)		-
Dividends paid:
Common stock		(453,683	)		(435,178	)
Preferred stock		(15,048	)		(14,993	)
Net cash flow used in financing activities		(949,227	)		(1,351,163	)

Effect of exchange rates on cash and cash equivalents		250			(218	)

Net increase (decrease) in cash and cash equivalents		221,368			(789,711	)

Cash and cash equivalents at beginning of period		1,709,551			1,920,491

Cash and cash equivalents at end of period	$	1,930,919		$	1,130,780



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$	426,461		$	442,345
Income taxes	$	32,964		$	18,915

Noncash financing activities:
Long-term debt retired (equity unit notes)		-		$	(500,000	)
Common stock issued in settlement of equity unit purchase contracts		-		$	500,000
Proceeds from long-term debt issued for the purpose of refunding prior long-term debt	$	150,000			-
Long-term debt refunded with proceeds from long-term debt issued in prior period	$	(150,000	)		-

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2010 and December 31, 2009
(Unaudited)

	2010			2009
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	87,617		$	85,861
Temporary cash investments		1,843,302			1,623,690
Total cash and cash equivalents		1,930,919			1,709,551
Securitization recovery trust account		36,280			13,098
Accounts receivable:
Customer		740,212			553,692
Allowance for doubtful accounts		(32,995	)		(27,631	)
Other		159,675			152,303
Accrued unbilled revenues		350,313			302,463
Total accounts receivable		1,217,205			980,827
Deferred fuel costs		66,071			126,798
Accumulated deferred income taxes		4,508			-
Fuel inventory - at average cost		193,526			196,855
Materials and supplies - at average cost		852,192			825,702
Deferred nuclear refueling outage costs		220,496			225,290
System agreement cost equalization		25,976			70,000
Prepayments and other		500,290			386,040
TOTAL		5,047,463			4,534,161

OTHER PROPERTY AND INVESTMENTS
Investment in affiliates - at equity		38,058			39,580
Decommissioning trust funds		3,421,626			3,211,183
Non-utility property - at cost (less accumulated depreciation)		253,290			247,664
Other		404,284			120,273
TOTAL		4,117,258			3,618,700

PROPERTY, PLANT AND EQUIPMENT
Electric		36,893,624			36,343,772
Property under capital lease		793,241			783,096
Natural gas		321,094			314,256
Construction work in progress		1,643,580			1,547,319
Nuclear fuel under capital lease		-			527,521
Nuclear fuel		1,267,551			739,827
TOTAL PROPERTY, PLANT AND EQUIPMENT		40,919,090			40,255,791
Less - accumulated depreciation and amortization		17,348,634			16,866,389
PROPERTY, PLANT AND EQUIPMENT - NET		23,570,456			23,389,402

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		592,355			619,500
Other regulatory assets (includes securitization property of $895,506 as of September 30, 2010)		3,688,785			3,647,154
Deferred fuel costs		172,202			172,202
Goodwill		377,172			377,172
Accumulated deferred income taxes		74,703			-
Other		1,027,813			1,006,306
TOTAL		5,933,030			5,822,334

TOTAL ASSETS	$	38,668,207		$	37,364,597

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2010 and December 31, 2009
(Unaudited)

	2010		2009
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	588,783	$	711,957
Notes payable		167,915		30,031
Accounts payable		1,009,194		998,228
Customer deposits		330,293		323,342
Accumulated deferred income taxes		86,562		48,584
Interest accrued		189,052		192,283
Deferred fuel costs		93,257		219,639
Obligations under capital leases		3,352		212,496
Pension and other postretirement liabilities		41,965		55,031
System agreement cost equalization		25,931		187,204
Other		377,882		215,202
TOTAL		2,914,186		3,193,997

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		8,146,036		7,422,319
Accumulated deferred investment tax credits		296,100		308,395
Obligations under capital leases		42,873		354,233
Other regulatory liabilities		555,240		421,985
Decommissioning and asset retirement cost liabilities		3,094,833		2,939,539
Accumulated provisions		388,532		141,315
Pension and other postretirement liabilities		2,111,685		2,241,039
Long-term debt (includes securitization bonds of $940,153 as of September 30, 2010)		11,444,513		10,705,738
Other		631,721		711,334
TOTAL		26,711,533		25,245,897

Commitments and Contingencies

Subsidiaries' preferred stock without sinking fund		216,736		217,343

EQUITY
Common Shareholders' Equity:
Common stock, $.01 par value, authorized 500,000,000 shares;
issued 254,752,788 shares in 2010 and in 2009		2,548		2,548
Paid-in capital		5,367,091		5,370,042
Retained earnings		8,611,081		8,043,122
Accumulated other comprehensive income (loss)		72,566		(75,185	)
Less - treasury stock, at cost (73,229,902 shares in 2010 and
65,634,580 shares in 2009)		5,321,534		4,727,167
Total common shareholders' equity		8,731,752		8,613,360
Subsidiaries' preferred stock without sinking fund		94,000		94,000
TOTAL		8,825,752		8,707,360

TOTAL LIABILITIES AND EQUITY	$	38,668,207	$	37,364,597

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2010 and 2009
(Unaudited) (In Thousands)

			Common Shareholders' Equity
	Subsidiaries' Preferred Stock		Common Stock		Treasury Stock			Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2008	$	94,000	$	2,482	$	(4,175,214	)	$	4,869,303	$	7,382,719	$	(112,698	)	$	8,060,592

Consolidated net income (a)		14,993		-		-			-		917,317		-			932,310
Other comprehensive income:
Cash flow hedges net unrealized gain (net of tax expense of $6,529)		-		-		-			-		-		4,547			4,547
Pension and other postretirement liabilities (net of tax benefit of $883)		-		-		-			-		-		558			558
Net unrealized investment gains (net of tax expense of $95,830)		-		-		-			-		-		96,179			96,179