Edgar Filing: ENTERGY ARKANSAS INC

a06211.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, 2011
	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 the registrants 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 registrant was required to submit and post such files). Yes þ 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 31, 2011
Entergy Corporation	($0.01 par value)	176,116,403

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, 2010 and the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011, filed by the individual registrants with the SEC, and should be read in conjunction therewith.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2011

	Page Number

Forward-looking information	iv
Definitions	vi
Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	1
Liquidity and Capital Resources	10
Rate, Cost-recovery, and Other Regulation	15
Market and Credit Risk Sensitive Instruments	16
Nuclear Matters	18
Critical Accounting Estimates	18
New Accounting Pronouncements	18
Consolidated Statements of Income	21
Consolidated Statements of Cash Flows	22
Consolidated Balance Sheets	24
Consolidated Statements of Changes in Equity and Comprehensive Income	26
Selected Operating Results	27
Notes to Financial Statements	28
Part 1. Item 4. Controls and Procedures	73
Entergy Arkansas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	74
Liquidity and Capital Resources	76
State and Local Rate Regulation	78
Federal Regulation	78
Nuclear Matters	79
Environmental Risks	79
Critical Accounting Estimates	79
Consolidated Income Statements	80
Consolidated Statements of Cash Flows	81
Consolidated Balance Sheets	82
Consolidated Statements of Changes in Common Equity	84
Selected Operating Results	85
Entergy Gulf States Louisiana, L.L.C.
Management’s Financial Discussion and Analysis
Results of Operations	86
Liquidity and Capital Resources	88
State and Local Rate Regulation	91
Federal Regulation	92
Nuclear Matters	92
Environmental Risks	92
Critical Accounting Estimates	92
Income Statements	93
Statements of Cash Flows	95
Balance Sheets	96
Statements of Changes in Equity and Comprehensive Income	98
Selected Operating Results	99

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2011

	Page Number

Entergy Louisiana, LLC and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	100
Liquidity and Capital Resources	102
State and Local Rate Regulation	105
Federal Regulation	106
Nuclear Matters	106
Environmental Risks	106
Critical Accounting Estimates	106
Consolidated Income Statements	107
Consolidated Statements of Cash Flows	109
Consolidated Balance Sheets	110
Consolidated Statements of Changes in Equity and Comprehensive Income	112
Selected Operating Results	113
Entergy Mississippi, Inc.
Management’s Financial Discussion and Analysis
Results of Operations	114
Liquidity and Capital Resources	116
State and Local Rate Regulation	119
Federal Regulation	119
Critical Accounting Estimates	119
Income Statements	120
Statements of Cash Flows	121
Balance Sheets	122
Statements of Changes in Common Equity	124
Selected Operating Results	125
Entergy New Orleans, Inc.
Management’s Financial Discussion and Analysis
Results of Operations	126
Liquidity and Capital Resources	128
State and Local Rate Regulation	130
Federal Regulation	130
Environmental Risks	130
Critical Accounting Estimates	130
Income Statements	131
Statements of Cash Flows	133
Balance Sheets	134
Statements of Changes in Common Equity	136
Selected Operating Results	137

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES

INDEX TO QUARTERLY REPORT ON FORM 10-Q

September 30, 2011

	Page Number

Entergy Texas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	138
Liquidity and Capital Resources	141
State and Local Rate Regulation	143
Federal Regulation	143
Environmental Risks	143
Critical Accounting Estimates	143
Consolidated Income Statements	144
Consolidated Statements of Cash Flows	145
Consolidated Balance Sheets	146
Consolidated Statements of Changes in Common Equity	148
Selected Operating Results	149
System Energy Resources, Inc.
Management’s Financial Discussion and Analysis
Results of Operations	150
Liquidity and Capital Resources	150
Nuclear Matters	152
Environmental Risks	152
Critical Accounting Estimates	152
Income Statements	153
Statements of Cash Flows	155
Balance Sheets	156
Statements of Changes in Common Equity	158
Part II. Other Information
Item 1. Legal Proceedings	159
Item 1A. Risk Factors	159
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	159
Item 5. Other Information	160
Item 6. Exhibits	164
Signature	167

iii

Table of Contents

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 or any successor agreement or arrangement, 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 transition to a successor or alternative arrangement, including possible participation in a regional transmission organization, 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 Entergy Wholesale Commodities business, and the effects of new or existing safety concerns regarding nuclear power plants and nuclear fuel

·	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 and the ability to hedge, sell power forward or otherwise reduce the market price risk associated with those facilities, including the Entergy Wholesale Commodities nuclear plants

·	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

Table of Contents

FORWARD-LOOKING INFORMATION (Concluded)

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

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, cyber attacks or data security breaches, and war or a catastrophic event such as a nuclear accident or a natural gas pipeline explosion

·	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

·	factors that could lead to impairment of long-lived assets

·	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

Table of Contents

DEFINITIONS

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

Abbreviation or Acronym	Term
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
ASU	Accounting Standards Update issued by the FASB
Board	Board of Directors of Entergy Corporation
bundled energy and capacity contract	A contract for the sale of installed capacity and related energy, priced per megawatt-hour sold
capacity contract	A contract for the sale of the installed capacity product in regional markets managed by ISO New England and the New York Independent System Operator
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
D.C. Circuit	U.S. Court of Appeals for the District of Columbia
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.
Entergy Wholesale Commodities (EWC)	Entergy’s non-utility business segment primarily comprised of the ownership and operation of six nuclear power plants, the ownership of interests in non-nuclear power plants, and the sale of the electric power produced by those plants to wholesale customers
EPA	United States Environmental Protection Agency
ERCOT	Electric Reliability Council of Texas
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
firm LD	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
FitzPatrick	James A. FitzPatrick Nuclear Power Plant (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Form 10-K	Annual Report on Form 10-K for the calendar year ended December 31, 2010 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

Table of Contents

DEFINITIONS (Continued)

Abbreviation or Acronym	Term
Indian Point 2	Unit 2 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Indian Point 3	Unit 3 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business 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
MISO	Midwest Independent Transmission System Operator, Inc., a regional transmission organization
MMBtu	One million British Thermal Units
MPSC	Mississippi Public Service Commission
MW	Megawatt(s), which equals one thousand kilowatts
MWh	Megawatt-hour(s)
Net MW in operation	Installed capacity owned and operated
NRC	Nuclear Regulatory Commission
NYPA	New York Power Authority
Offsetting positions	Transactions for the purchase of energy, generally to offset a firm LD transaction
Palisades	Palisades Power Plant (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Pilgrim	Pilgrim Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
percent of capacity sold forward	Percent of planned qualified capacity sold to mitigate price uncertainty under physical or financial transactions
percent of planned generation sold forward	Percent of planned generation output sold or purchased forward under contracts, forward physical contracts, forward financial contracts or options that mitigate price uncertainty that may or may not require regulatory approval
planned net MW in operation	Amount of capacity to be available to generate power and/or sell capacity considering uprates planned to be completed during the year
PPA	Purchased power agreement or power purchase agreement
PUCT	Public Utility Commission of Texas
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
SPP	Southwest Power Pool
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-contingent	Transaction under which power is supplied from a specific generation asset; if the asset is not operating, the seller is generally not liable to the buyer for any damages

vii

Table of Contents

DEFINITIONS (Concluded)

Abbreviation or Acronym	Term
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 Entergy Wholesale Commodities business 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

viii

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Entergy operates primarily through its two, reportable, operating segments: Utility and Entergy Wholesale Commodities.

·	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.

The Entergy Wholesale Commodities business segment includes the ownership and operation of six nuclear power plants located in the northern United States and the sale of the electric power produced by those plants to wholesale customers. This business also provides services to other nuclear power plant owners. Entergy Wholesale Commodities also owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers.

In the fourth quarter 2010, Entergy finished integrating its former Non-Utility Nuclear business segment and its non-nuclear wholesale asset business into the new Entergy Wholesale Commodities business in an internal reorganization. The prior period financial information in this Form 10-Q has been restated to reflect the change in reportable segments.

Results of Operations

Third Quarter 2011 Compared to Third Quarter 2010

Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing the third quarter 2011 to the third quarter 2010 showing how much the line item increased or (decreased) in comparison to the prior period:

	Utility	Entergy Wholesale Commodities	Parent & Other (1)	Entergy
	(In Thousands)

3rd Qtr 2010 Consolidated Net Income	$337,941	$143,721	$16,239	$497,901

Net revenue (operating revenue less fuel expense, purchased power, and other regulatory charges/credits)	(203,858)	(32,623)	2,436	(234,045)
Other operation and maintenance expenses	(37,748)	(70,511)	8,392	(99,867)
Taxes other than income taxes	9,022	4,791	14	13,827
Depreciation and amortization	15,570	3,448	(58)	18,960
Other income	593	(7,858)	8,861	1,596
Interest expense	(6,197)	(636)	7,295	462
Other expenses	833	1,935	-	2,768
Income taxes (benefit)	(375,263)	33,351	38,145	(303,767)

3rd Qtr 2011 Consolidated Net Income	$528,459	$130,862	($26,252)	$633,069

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

Table of Contents

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 income for Utility in the third quarter 2011 was significantly affected by a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts, which resulted in a reduction in income tax expense. The net income effect was partially offset by a regulatory charge, which reduced net revenue, because a portion of the benefits will be shared with customers. See Note 10 to the financial statements for additional discussion of the settlement and benefit sharing.

Net Revenue

Utility

Following is an analysis of the change in net revenue comparing the third quarter 2011 to the third quarter 2010.

		Amount
		(In Millions)

2010 net revenue		$1,522
Mark-to-market tax settlement sharing		(199)
Volume/weather		(10)
Retail electric price		5
Other		1
2011 net revenue		$1,319

The mark-to-market tax settlement sharing variance results from a regulatory charge because a portion of the benefits of a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts will be shared with customers. See Note 10 to the financial statements for additional discussion of the settlement and benefit sharing.

The volume/weather variance is primarily due to milder weather compared to the same period in the prior year. Despite favorable weather in the third quarter 2011, the weather effect declined compared to the even warmer weather experienced in the third quarter 2010. This was offset by an increase of 785 GWh in weather-adjusted usage, primarily in the industrial sector. Entergy’s service territory continues to benefit from expansions as well as competitive industries and facilities located within the region.

The retail electric price variance is primarily due to:

·	rate actions at Entergy Texas, including a base rate increase effective August 2010 and an additional increase beginning May 2011; and

·	a formula rate plan increase at Entergy Louisiana effective May 2011.

These were partially offset by a formula rate plan decrease at Entergy New Orleans effective October 2010. See Note 2 to the financial statements in the Form 10-K and herein for further discussion of these proceedings.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Wholesale Commodities

Following is an analysis of the change in net revenue comparing the third quarter 2011 to the third quarter 2010.

		Amount
		(In Millions)

2010 net revenue		$574
Realized price changes		(43)
Harrison County		(9)
Fuel expenses		(9)
Volume		41
Other		(12)
2011 net revenue		$542

As shown in the table above, net revenue for Entergy Wholesale Commodities decreased by $32 million, or 6%, in the third quarter 2011 compared to the third quarter 2010 primarily due to:

·	lower pricing in its contracts to sell power;

·	the absence of the Harrison County plant, which was sold in December 2010; and

·	higher fuel expenses at the nuclear plants.

These factors were substantially offset by higher volume resulting from fewer planned and unplanned outage days in 2011 compared to the same period in 2010.

Following are key performance measures for Entergy Wholesale Commodities’ nuclear plants for the third quarter 2011 and 2010:

	2011	2010

Net MW in operation at September 30	4,998	4,998
Average realized revenue per MWh	$56.07	$61.41
GWh billed	10,645	9,888
Capacity factor	98%	91%
Refueling outage days:
FitzPatrick	-	18

Overall, including its non-nuclear plants, Entergy Wholesale Commodities billed 11,284 GWh in the third quarter 2011 and 10,736 GWh in the third quarter 2010, with average realized revenue per MWh of $55.87 in the third quarter 2011 and $61.51 in the third quarter 2010.

Realized Price per MWh

See the Form 10-K for a discussion of Entergy Wholesale Commodities nuclear business’s realized price per MWh, including the factors that influence it and the decrease in the annual average realized price per MWh to $59.16 in 2010 from $61.07 for 2009. Entergy Wholesale Commodities’ nuclear business is almost certain to experience a decrease again in 2011 because, as shown in the contracted sale of energy table "Market and Credit Risk Sensitive Instruments," Entergy Wholesale Commodities has sold forward 94% of its planned nuclear energy output for the remainder of 2011 for an average contracted energy price of $52 per MWh. In addition, Entergy Wholesale Commodities has sold forward 89% of its planned nuclear energy output for 2012 for an average contracted energy price of $49 per MWh.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Other Income Statement Items

Utility

Other operation and maintenance expenses decreased from $516 million for the third quarter 2010 to $478 million for the third quarter 2011 primarily due to:

·	a decrease of $24 million in compensation and benefits costs primarily resulting from an increase in the accrual for incentive-based compensation in 2010;

the deferral in 2011 of $13.4 million of 2010 Michoud plant maintenance costs pursuant to the settlement of Entergy New Orleans’ 2010 test year formula rate plan filing approved by the City Council in September 2011. See Note 2 to the financial statements for further discussion of the 2010 test year formula rate plan filing and settlement; and

·	the amortization of $11 million of Entergy Texas rate case expenses in 2010. See Note 2 to the financial statements in the Form 10-K for further discussion of the Entergy Texas rate case settlement.

These decreases were partially offset by an increase of $7 million in nuclear expenses primarily due to higher labor costs.

Depreciation and amortization expense increased primarily due to an increase in plant in service.

Entergy Wholesale Commodities

Other operation and maintenance expenses decreased from $299 million for the third quarter 2010 to $229 million for the third quarter 2011 primarily due to:

·	the write-off of $25 million of capital costs in 2010, primarily for software that would not be utilized, and $11 million of additional costs incurred in 2010 in connection with Entergy's decision to unwind the infrastructure created for the planned spin-off of its non-utility nuclear business;

·	a decrease in compensation and benefits costs resulting from an increase of $12 million in the accrual for incentive-based compensation in 2010;

·	the write-off of $10 million of capitalized engineering costs in 2010 associated with a potential uprate project; and

·	a decrease of $9 million due to the absence of expenses from the Harrison County plant, which was sold in December 2010.

Income Taxes

The effective income tax rates for the third quarters 2011 and 2010 were (23.2)% and 27.1%, respectively. The difference in the effective income tax rate versus the statutory rate of 35% for the third quarter 2011 is primarily due to a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts, which resulted in a reduction in income tax expense of $422 million. See Note 10 to the financial statements herein for further discussion of the settlement. 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 for further discussion of this tax litigation;

·	the recognition of a $14 million Louisiana state income tax benefit related to Act 55 storm cost financing; and

·	the reversal of a reserve of $13 million with respect to restructuring of business operations within the non-utility nuclear business.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

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

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing the nine months ended September 30, 2011 to the nine months ended September 30, 2010 showing how much the line item increased or (decreased) in comparison to the prior period:

	Utility	Entergy Wholesale Commodities	Parent & Other (1)	Entergy
	(In Thousands)

2010 Consolidated Net Income	$711,085	$338,820	($12,906)	$1,036,999

Net revenue (operating revenue less fuel expense, purchased power, and other regulatory charges/credits)	(173,625)	(128,423)	3,778	(298,270)
Other operation and maintenance expenses	(11,046)	(140,361)	17,091	(134,316)
Taxes other than income taxes	7,276	(1,117)	(263)	5,896
Depreciation and amortization	11,177	12,149	(46)	23,280
Other income	10,851	(35,617)	3,923	(20,843)
Interest expense	(32,679)	(52,428)	31,014	(54,093)
Other expenses	770	9,158	-	9,928
Income taxes (benefit)	(377,041)	27,728	9,158	(340,155)

2011 Consolidated Net Income	$949,854	$319,651	($62,159)	$1,207,346

(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 income for Utility for the nine months ended September 30, 2011 was significantly affected by a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts, which resulted in a reduction in income tax expense. The net income effect was partially offset by a regulatory charge, which reduced net revenue, because a portion of the benefits will be shared with customers. See Note 10 to the financial statements for additional discussion of the settlement and benefit sharing.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Net Revenue

Utility

Following is an analysis of the change in net revenue comparing the nine months ended September 30, 2011 to the nine months ended September 30, 2010.

		Amount
		(In Millions)

2010 net revenue		$3,945
Mark-to-market tax settlement sharing		(199)
Net wholesale revenue		(15)
Purchased power capacity		(14)
Volume/weather		21
Retail electric price		31
Other		3
2011 net revenue		$3,772

The net wholesale revenue variance is primarily due to lower margins on co-owner contracts and higher wholesale energy costs.

The purchased power capacity variance is primarily due to price increases for ongoing purchased power capacity and additional capacity purchases.

The volume/weather variance is primarily due to an increase of 1,986 GWh in weather-adjusted usage across all sectors. Weather-adjusted residential retail sales growth reflected an increase in the number of customers. Industrial sales growth has continued since the beginning of 2010. Entergy’s service territory has benefited from the national manufacturing economy and exports, as well as industrial facility expansions. Increases have been offset to some extent by declines in the paper, wood products, and pipeline segments. The weather effect variance was relatively flat as favorable weather experienced in 2011 was comparable to that experienced in 2010.

The retail electric price variance is primarily due to:

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

·	rate actions at Entergy Texas, including a base rate increase effective August 2010 and an additional increase beginning May 2011; and

·	a formula rate plan increase at Entergy Louisiana effective May 2011.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Wholesale Commodities

Following is an analysis of the change in net revenue comparing the nine months ended September 30, 2011 to the nine months ended September 30, 2010.

		Amount
		(In Millions)

2010 net revenue		$1,669
Realized price changes		(102)
Harrison County		(20)
Fuel expenses		(17)
Volume		22
Other		(11)
2011 net revenue		$1,541

As shown in the table above, net revenue for Entergy Wholesale Commodities decreased by $128 million, or 8%, in the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to:

·	lower pricing in its contracts to sell power;

·	the absence of the Harrison County plant, which was sold in December 2010; and

·	higher fuel expenses at the nuclear plants.

These factors were substantially offset by higher volume resulting from fewer planned and unplanned outage days in 2011 compared to the same period in 2010.

Following are key performance measures for Entergy Wholesale Commodities’ nuclear plants for the nine months ended September 30, 2011 and 2010:

	2011	2010

Net MW in operation at September 30	4,998	4,998
Average realized revenue per MWh	$55.31	$59.27
GWh billed	30,551	30,011
Capacity factor	93%	92%
Refueling outage days:
FitzPatrick	-	18
Indian Point 2	-	33
Indian Point 3	30	-
Pilgrim	25	-
Vermont Yankee	-	29

Overall, including its non-nuclear plants, Entergy Wholesale Commodities billed 32,455 GWh in the nine months ended September 30, 2011 and 32,362 GWh in the nine months ended September 30, 2010, with average realized revenue per MWh of $55.07 in the nine months ended September 30, 2011 and $59.32 in the nine months ended September 30, 2010. See also the discussion in “Realized Price per MWh” in the Third Quarter 2011 Compared to Third Quarter 2010 section.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Other Income Statement Items

Utility

Other operation and maintenance expenses decreased from $1,422 million for the nine months ended September 30, 2010 to $1,411 million for the nine months ended September 30, 2011 primarily due to:

·	a decrease of $31 million in compensation and benefits costs primarily resulting from an increase in the accrual for incentive-based compensation in 2010;

·	a decrease of $15 million in fossil expenses resulting from more outages in the first half of 2010; and

·	the amortization of $11 million of Entergy Texas rate case expenses in 2010. See Note 2 to the financial statements in the Form 10-K for further discussion of the Entergy Texas rate case settlement.

These decreases were partially offset by an increase of $24 million in nuclear expenses primarily due to higher labor and benefits costs, an increase of $8 million in legal expenses primarily resulting from an increase in legal and regulatory activity increasing the use of outside legal services, and several individually insignificant items.

Depreciation and amortization expense increased primarily due to an increase in plant in service.

Interest expense decreased primarily due to:

·	the refinancing of long-term debt at lower interest rates by certain of the Utility operating companies;

·	a revision caused by FERC’s acceptance of a change in the treatment of funds received from independent power producers for transmission interconnection projects; and

·	interest expense accrued in 2010 related to the expected result of the LPSC Staff audit of Entergy Gulf States Louisiana’s fuel adjustment clause for the period 1995 through 2004.

Entergy Wholesale Commodities

Other operation and maintenance expenses decreased from $809 million for the nine months ended September 30, 2010 to $669 million for the nine months ended September 30, 2011 primarily due to:

·	the write-off of $58 million of capital costs in 2010, primarily for software that would not be utilized, and $12 million of additional costs incurred in 2010 in connection with Entergy’s decision to unwind the infrastructure created for the planned spin-off of its non-utility nuclear business;

·	a decrease of $22 million due to the absence of expenses from the Harrison County plant, which was sold in December 2010;

·	a decrease in compensation and benefits costs resulting from an increase of $18 million in the accrual for incentive-based compensation in 2010;

·	the write-off of $10 million of capitalized engineering costs in 2010 associated with a potential uprate project; and

·	a decrease of $11 million in spending on tritium remediation work.

Depreciation and amortization expense increased primarily due to an increase in plant in service.

Other income decreased primarily due to a decrease in interest income earned on loans to the parent company, Entergy Corporation, and a decrease of $10 million in realized earnings on decommissioning trust fund investments.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Interest expense decreased primarily due to the write-off of $39 million of debt financing costs in 2010, primarily incurred for a $1.2 billion credit facility that will not be used, in connection with Entergy’s decision to unwind the infrastructure created for the planned spin-off of its non-utility nuclear business.

Parent & Other

Interest expense increased primarily due to $1 billion of Entergy Corporation notes payable issued in September 2010, with the proceeds used to pay down the borrowings outstanding on Entergy Corporation’s revolving credit facility, which were at a lower interest rate.

Income Taxes

The effective income tax rates for the nine months ended September 30, 2011 and 2010 were 14.0% and 34.1%, respectively. The difference in the effective income tax rate versus the statutory rate of 35% for the nine months ended September 30, 2011 is primarily due to a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts, which resulted in a reduction in income tax expense of $422 million. See Note 10 to the financial statements herein for further discussion of the settlement. 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:

·	a $19 million tax benefit recorded in the first quarter 2010 in connection with Entergy’s decision to unwind the infrastructure created for the planned spin-off of its non-utility nuclear business;

·	the recognition of a $14 million Louisiana state income tax benefit related to Act 55 storm cost financing; and

·	the reversal of a reserve of $13 million with respect to restructuring of business operations within the non-utility nuclear business.

These factors were partially offset by:

a charge of $16 million recorded in first quarter 2010 resulting from a change in tax law associated with the federal healthcare legislation enacted in March 2010. See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K for a discussion of the federal healthcare legislation;

·	state income taxes; and

·	certain book and tax differences for Utility plant items.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

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, 2011	December 31, 2010

Debt to capital	57.3%	57.3%
Effect of excluding the securitization bonds	(2.2)%	(2.0)%
Debt to capital, excluding securitization bonds (1)	55.1%	55.3%
Effect of subtracting cash	(2.3)%	(3.2)%
Net debt to net capital, excluding securitization bonds (1)	52.8%	52.1%

(1)	Calculation excludes the Arkansas, Louisiana, and Texas securitization bonds, which are non-recourse to Entergy Arkansas, Entergy Louisiana, 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 and the ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy’s financial condition.

As discussed in the Form 10-K, Entergy Corporation has in place a revolving credit facility that expires in August 2012, which Entergy intends to renew before expiration. Because the facility is now within one year of its expiration date, borrowings outstanding on the facility are classified as currently maturing long-term debt on the balance sheet. Entergy Corporation has the ability to issue letters of credit against the total borrowing capacity of the facility. As of September 30, 2011, the capacity and amounts outstanding under the credit facility are:

Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)

$3,463	$1,870	$25	$1,568

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 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.

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.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

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 2011 through 2013. Following are updates to the discussion in the Form 10-K.

Capital Investment Plan Preliminary Estimate for 2012-2014

Entergy is developing its capital investment plan for 2012 through 2014 and currently anticipates that the Utility will make $6.0 billion in capital investments during that period, including approximately $2.9 billion for maintenance of existing assets, and that Entergy Wholesale Commodities will make $1.1 billion in capital investments during that period, including approximately $0.3 billion for maintenance of existing assets. The remaining $3.1 billion of Utility investments is associated with specific investments such as the Waterford 3 steam generator replacement, the Grand Gulf uprate project, the Ninemile 6 project, the Hot Spring and Hinds purchases, and other investments such as potential opportunities through the Utility’s supply plan initiatives that support its ability to meet load growth. The remaining $0.8 billion of Entergy Wholesale Commodities investments is associated with specific investments such as dry cask storage, nuclear license renewal, component replacement and identified repairs, spending in response to the Indian Point Safety Evaluation, NYPA value sharing, and wedgewire screens at Indian Point.

Grand Gulf Uprate

As discussed in the Form 10-K, the estimated capital investments for 2011-2013 included $575 million of spending associated with System Energy’s planned approximate 178 MW uprate of the Grand Gulf nuclear plant. After performing more detailed project design, engineering, analysis and major materials purchases, System Energy’s current updated estimate of the total capital investment to be made in the course of the implementation of the Grand Gulf uprate project is approximately $734 million, including SMEPA’s share. As in the original estimate, this estimate includes spending on certain major equipment refurbishment and replacement that would have been required over the normal course of the plant’s life even if the uprate were not done. The purpose of performing this major equipment refurbishment and replacement in connection with the uprate is to avoid additional plant outages and construction costs in the future while improving plant reliability. The investment estimate may be revised in the future as System Energy evaluates the progress of the project.

Acadia Unit 2 Purchase Agreement

See the Form 10-K for a discussion of the agreement Entergy Louisiana signed 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 acquired the plant on April 29, 2011.

Rhode Island State Energy Center Purchase Agreement

In October 2011, Entergy signed an agreement with a subsidiary of NextEra Energy Resources to acquire the Rhode Island State Energy Center, a 550 MW natural gas-fired combined cycle generating plant located in Johnston, Rhode Island, for approximately $346 million, subject to closing adjustments. If acquired the plant will become a part of the Entergy Wholesale Commodities business. The Rhode Island State Energy Center is in the process of uprating to 583 MW, which is scheduled for completion in November 2011. The transaction is contingent upon, among other things, obtaining regulatory approval from the FERC and notification pursuant to the Hart-Scott-Rodino antitrust law. Closing is scheduled to occur in late 2011.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Summer 2009 Long-Term Request for Proposal

As discussed in the Form 10-K, the construction or purchase of three resources identified in the Summer 2009 Long-Term Request for Proposal were included in the 2011-2013 capital expenditure estimates in the Form 10-K. In addition to the self-build option at Entergy Louisiana’s Ninemile site noted in the Form 10-K, in April 2011 two Entergy Utility operating companies announced that they have signed agreements to acquire the other two resources, the 620 MW Hot Spring Energy Facility and the 450 MW Hinds Energy Facility.

Ninemile Point Unit 6 Self-Build Project

In June 2011, Entergy Louisiana filed with the LPSC an application seeking certification that the public necessity and convenience would be served by Entergy Louisiana’s construction of a combined-cycle gas turbine generating facility (Ninemile 6) at its existing Ninemile Point electric generating station. Ninemile 6 will be a nominally-sized 550 MW unit that is estimated to cost approximately $721 million to construct, excluding interconnection and transmission upgrades. Entergy Gulf States Louisiana joined in the application, seeking certification of its purchase under a life-of-unit power purchase agreement of up to 35% of the capacity and energy generated by Ninemile 6. The Ninemile 6 capacity and energy is proposed to be allocated 55% to Entergy Louisiana, 25% to Entergy Gulf States Louisiana, and 20% to Entergy New Orleans. Entergy New Orleans filed a request with the City Council to approve its purchase under a life-of-unit power purchase agreement of this capacity and energy. The City Council has approved a procedural schedule that leads to a decision in the first quarter 2012. If the City Council does not approve this power purchase agreement in a timely manner, then an allocation of 65% to Entergy Louisiana and 35% to Entergy Gulf States Louisiana is proposed. If approvals are obtained from the LPSC and other permitting agencies, Ninemile 6 construction is expected to begin in 2012, and the unit is expected to commence commercial operation by mid-2015. The ALJ has established a schedule for the LPSC proceeding that includes February 27 - March 7, 2012, hearing dates.

Hot Spring Energy Facility Purchase Agreement

In April 2011, Entergy Arkansas announced that it has signed an asset purchase agreement to acquire the Hot Spring Energy Facility, a 620 MW natural gas-fired combined-cycle turbine plant located in Hot Spring County, Arkansas, from a subsidiary of KGen Power Corporation. The purchase price is expected to be approximately $253 million. Entergy Arkansas also expects to invest in various plant upgrades at the facility after closing and expects the total cost of the acquisition to be approximately $277 million. A new transmission service request has been submitted to determine if investments for supplemental upgrades in the Entergy transmission system are needed to make the Hot Spring Energy Facility deliverable to Entergy Arkansas for the period after Entergy Arkansas exits the System Agreement. The initial results of the service request are expected in January 2012; accordingly there are still uncertainties that must be resolved. The purchase is contingent upon, among other things, obtaining necessary approvals, including full cost recovery, from various federal and state regulatory and permitting agencies. These include regulatory approvals from the APSC and FERC, as well as clearance under the Hart-Scott-Rodino anti-trust law. Closing is expected to occur in mid-2012. In July 2011, Entergy Arkansas filed its application with the APSC requesting approval of the acquisition and full cost recovery. The APSC has established a procedural schedule that includes a January 24, 2012 evidentiary hearing.

Hinds Energy Facility Purchase Agreement

In April 2011, Entergy Mississippi announced that it has signed an asset purchase agreement to acquire the Hinds Energy Facility, a 450 MW natural gas-fired combined-cycle turbine plant located in Jackson, Mississippi, from a subsidiary of KGen Power Corporation. The purchase price is expected to be approximately $206 million. Entergy Mississippi also expects to invest in various plant upgrades at the facility after closing and expects the total cost of the acquisition to be approximately $246 million. A new transmission service request has been submitted to determine if investments for supplemental upgrades in the Entergy transmission system are needed to make the Hinds Energy Facility deliverable to Entergy Mississippi for the period after Entergy Mississippi exits the System Agreement. The initial results of the service request are expected in January 2012; accordingly there are still uncertainties that must be resolved. The purchase is contingent upon, among other things, obtaining necessary approvals, including full cost recovery, from various federal and state

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

regulatory and permitting agencies. These include regulatory approvals from the MPSC and FERC, as well as clearance under the Hart-Scott-Rodino anti-trust law. Closing is expected to occur in mid-2012. In July 2011, Entergy Mississippi filed with the MPSC requesting approval of the acquisition and full cost recovery.

Waterford 3 Steam Generator Replacement Project

See the Form 10-K for a discussion of the Waterford 3 Steam Generator Replacement project. With regard to the delay in the delivery of the steam generators, Entergy Louisiana worked with the manufacturer to fully develop and evaluate repair options, and expects the replacement steam generators to be delivered in time for the Fall 2012 refueling outage. Extensive inspections of the existing steam generators at Waterford 3 in cooperation with the manufacturer were completed in April 2011. The review of data obtained during these inspections supports the conclusion that Waterford 3 can operate safely for another full cycle before the replacement of the existing steam generators. Entergy Louisiana has formally reported its findings to the NRC. At this time, a requirement to perform a mid-cycle outage for further inspections in order to allow the plant to continue operation until its Fall 2012 refueling outage is not anticipated. Entergy Louisiana currently expects the cost of the project, including carrying costs, to increase to approximately $687 million if the replacement occurs during the Fall 2012 refueling outage.

Entergy Louisiana’s existing formula rate plan provides for rate treatment of the Waterford 3 project costs, including in-service rate recovery without regulatory lag and treatment outside of the formula rate plan earnings sharing formula; however, these provisions contemplated the project being placed in service during the term of the current formula rate plan and will not apply at the time of the expected in-service date in the Fall 2012. Through a motion filed in September 2011, Entergy Louisiana has sought to re-establish comparable rate recovery provisions for the project through renewal or extension of the current formula rate plan provisions. The LPSC is scheduled to review this motion at its November 2011 meeting. As set forth in the motion, if Entergy Louisiana cannot establish comparable rate relief through the extension of the current formula rate plan provisions, it will be necessary to seek such relief through a base rate filing.

Dividends and Stock Repurchases

Declarations of dividends on Entergy’s common stock are made at the discretion of the Board. Among other things, the Board evaluates the level of Entergy’s common stock dividends based upon Entergy’s earnings, financial strength, and future investment opportunities. At its January, April, July, and October 2011 meetings, the Board declared dividends of $0.83 per share, which is the same quarterly dividend per share that Entergy has paid since second quarter 2010.

Cash Flow Activity

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

	2011	2010
	(In Millions)

Cash and cash equivalents at beginning of period	$1,294	$1,710

Cash flow provided by (used in):
Operating activities	2,130	3,165
Investing activities	(2,395)	(1,995)
Financing activities	(42)	(949)
Net increase (decrease) in cash and cash equivalents	(307)	221

Cash and cash equivalents at end of period	$987	$1,931

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Operating Activities

Entergy's cash flow provided by operating activities decreased by $1,035 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 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 Note 2 to the financial statements in the Form 10-K. An increase of $131 million in pension contributions and the decrease in Entergy Wholesale Commodities net revenue that is discussed above also contributed to the decrease in operating cash flow. See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits funding.

Investing Activities

Net cash used in investing activities increased by $401 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to:

·	the purchase of the Acadia Power Plant by Entergy Louisiana for approximately $300 million in April 2011;

·	the investment in 2010 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 in the Form 10-K;

·	an increase in nuclear fuel purchases, as more plants were preparing for refueling outages in 2011 than in 2010;

a change in collateral deposit activity, reflected in the “Decrease (increase) in other investments” line on the Consolidated Statements of Cash Flows, as Entergy received $114 million in net deposits from Entergy Wholesale Commodities’ counterparties during 2010 and returned net deposits of $58 million in 2011. Entergy Wholesale Commodities’ forward sales contracts are discussed in the Market and Credit Risk Sensitive Instruments section below; and

an increase in construction expenditures, primarily in the Utility business. Entergy’s construction spending plans for 2011 through 2013 are discussed in the Form 10-K. April 2011 storms that caused damage to transmission and distribution lines, equipment, poles, and other facilities, primarily in Arkansas, also contributed to the increase. The capital cost of repairing that damage was approximately $55 million.

Financing Activities

Net cash used in financing activities decreased by $907 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to the following:

·	Entergy repurchased $235 million of its common stock in the nine months ended September 30, 2011 and repurchased $666 million of its common stock in the nine months ended September 30, 2010. Entergy’s share repurchase programs are discussed in the Form 10-K.

·	Long-term debt activity provided approximately $588 million of cash in 2011 compared to $158 million of cash in 2010. For details of Entergy's long-term debt activity in 2011 see Note 4 to the financial statements herein.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

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 and Independent Coordinator of Transmission (ICT)

As discussed in the Form 10-K, in November 2010 the FERC issued an order accepting the Utility operating companies’ proposal to extend the ICT arrangement with SPP by an additional term of two years, providing time for analysis of longer term structures. In addition, in December 2010 the FERC issued an order that granted the Entergy Regional State Committee (E-RSC) additional authority over transmission upgrades and cost allocation. The E-RSC, comprised of one representative from each of the Utility operating company retail regulators, was formed in 2009 to consider several of the issues related to the Entergy transmission system. The Utility operating companies expect that the E-RSC will review the cost-benefit analysis, discussed below, that the Utility operating companies submitted in May 2011 to each of their respective retail regulators comparing the ICT arrangement to joining the SPP RTO or the Midwest Independent Transmission System Operator (MISO).

Also as discussed in the Form 10-K, in February 2010 the APSC issued a show cause order opening an inquiry to conduct an investigation regarding the prudence of Entergy Arkansas’s entering a successor pooling agreement with the other Entergy Utility operating companies, as opposed to becoming a standalone entity upon exit from the System Agreement in December 2013, and whether Entergy Arkansas, as a standalone utility, should join the SPP RTO. The APSC subsequently added evaluation of Entergy Arkansas joining MISO on a standalone basis as an alternative to be considered. In August 2010, the APSC directed Entergy Arkansas and all parties to compare five strategic options at the same time as follows: (1) Entergy Arkansas Self-Provide; (2) Entergy Arkansas with 3rd party coordination agreements; (3) Successor Arrangements; (4) Entergy Arkansas as a standalone member of SPP RTO; and (5) Entergy Arkansas as a standalone member of MISO.

On April 25, 2011, Entergy announced that each of the Utility operating companies propose joining MISO, which is expected to provide long-term benefits for the customers of each of the Utility operating companies. MISO is a regional transmission organization that operates in 12 U.S. states (Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, North Dakota, Ohio, South Dakota, and Wisconsin) and also in Canada. The Utility operating companies provided analysis in May 2011 to their retail regulators supporting this decision. The APSC received additional information from Entergy, MISO, and other parties and held an evidentiary hearing in September 2011. The APSC issued an order in the proceeding in October 2011 finding that it is prudent for Entergy Arkansas to join an RTO but deferred a decision on Entergy Arkansas’s plan to join MISO until Entergy Arkansas files an application to transfer control of its transmission assets to MISO. Entergy Arkansas plans to file that application by November 28, 2011, which is the deadline set in the APSC order.

Entergy’s May 2011 filings estimate that the transition and implementation costs of joining MISO could be up to $105 million if all of the Utility operating companies join MISO, most of which will be spent in late 2012 and 2013. Maintaining the viability of the alternatives of Entergy Arkansas joining MISO alone or standing alone within an ICT arrangement is expected to result in an additional cost of approximately $35 million, for a total cost of up to $140 million. This amount could increase with extended litigation in various

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

regulatory proceedings. It is expected that costs will be incurred to obtain regulatory approvals, to revise or implement commercial and legal agreements, to integrate transmission and generation facilities, to develop back-office accounting and settlement systems, and to build out communications infrastructure. The Utility operating companies also expect to make filings later in 2011 with their retail regulators regarding the transfer of control of their transmission assets to MISO. As discussed below, Entergy Louisiana and Entergy Gulf States Louisiana made their filing on October 31, 2011. The target implementation date for joining MISO is December 2013.

On Oct. 31, 2011, Entergy Louisiana and Entergy Gulf States Louisiana filed with the LPSC a joint application seeking to join MISO and transfer control of the companies’ transmission assets to MISO. The joint application to join MISO seeks a finding from the LPSC that membership in MISO is in the public interest. As MISO members, Entergy Louisiana and Entergy Gulf States Louisiana will retain ownership of their generation and transmission facilities, along with responsibility for maintaining these facilities. Once Entergy Louisiana and Entergy Gulf States Louisiana are fully integrated as members, however, MISO will assume control of transmission planning, the commitment and dispatch of generation that is bid into MISO’s markets, and congestion management. As part of the joint application, Entergy Louisiana and Entergy Gulf States Louisiana also requested an accounting order authorizing them to defer costs associated with integrating into MISO. Entergy Louisiana expects to incur costs up to $26 million in order to complete the transition activities and Entergy Gulf States Louisiana expects to incur up to $19 million. Of these expected costs, Entergy Louisiana expects to request deferral of the expected expense portion of $19 million and Entergy Gulf States Louisiana expects to request deferral of the expected expense portion of $14 million as regulatory assets.

In June 2011, MISO filed with the FERC a request for a transitional waiver of provisions of its open access transmission, energy, and operating reserve markets tariff regarding allocation of transmission network upgrade costs, in order to establish a transition for the integration of the Utility operating companies. Several parties intervened in the proceeding, including Entergy, the APSC, the LPSC, and the City Council, and some of the parties also filed comments or protests. In September 2011 the FERC issued an order denying on procedural grounds MISO’s request, further advising MISO that submitting modified tariff sheets is the appropriate method for implementing the transition that MISO seeks for the Utility operating companies. The FERC did not address the merits of any transition arrangements that may be appropriate to integrate the Utility operating companies into MISO. MISO announced that it intends to “work with its stakeholders to quickly craft the appropriate changes to its tariff that will accomplish the same objectives sought in the waiver.”

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 Wholesale Commodities, unless otherwise contracted, is subject to the fluctuation of market power prices. In addition to selling the power produced by its plants, Entergy Wholesale Commodities sells unforced capacity to load-serving distribution companies in order for those companies to meet requirements placed on them by the ISO in their area. Following is an updated summary of the amount of Entergy Wholesale Commodities nuclear power plants’ planned energy output and installed capacity that is sold forward under physical or financial contracts (2011 represents the remainder of the year):

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Energy
	2011	2012	2013	2014	2015	2016

Percent of planned generation sold forward:
Unit-contingent	80%	61%	38%	14%	12%	12%
Unit-contingent with guarantee of availability (1)	14%	14%	16%	13%	13%	13%
Firm LD	3%	24%	24%	8%	-%	-%
Offsetting positions	(3)%	(10)%	-%	-%	-%	-%
Total energy sold forward	94%	89%	78%	35%	25%	25%
Planned generation (TWh) (2) (3)	10	41	40	41	41	40
Average revenue under contract per MWh (4) (5)	$52	$49	$45-51	$49-55	$49-57	$50-59

Capacity
	2011	2012	2013	2014	2015	2016

Percent of capacity sold forward:
Bundled capacity and energy contracts	26%	18%	16%	16%	16%	16%
Capacity contracts	45%	32%	26%	25%	11%	0%
Total capacity sold forward	71%	50%	42%	41%	27%	16%
Planned net MW in operation (3)	4,998	4,998	4,998	4,998	4,998	4,998
Average revenue under contract per kW per month (applies to capacity contracts only) (4) (5)	$1.8	$2.8	$3.2	$3.1	$2.9	$-
Blended Capacity and Energy Recap (based on revenues)
% of planned generation and capacity sold forward	95%	89%	76%	37%	26%	25%
Blended revenue under contract per MWh	$53	$50	$49	$54	$55	$55

(1)	A sale of power on a unit-contingent basis coupled with a guarantee of availability provides for the payment to the power purchaser of contract damages, if incurred, in the event the seller fails to deliver power as a result of the failure of the specified generation unit to generate power at or above a specified availability threshold. All of Entergy’s outstanding guarantees of availability provide for dollar limits on Entergy’s maximum liability under such guarantees.
(2)	Amount of output expected to be generated by Entergy Wholesale Commodities nuclear units considering plant operating characteristics, outage schedules, and expected market conditions which impact dispatch.
(3)	Assumes NRC license renewal for plants whose current licenses expire within five years and the continued operation of all six plants. NRC license renewal applications are in process for three units, as follows (with current license expirations in parentheses): Pilgrim (June 2012), Indian Point 2 (September 2013), and Indian Point 3 (December 2015). See also Note 11 to the financial statements for a discussion regarding the continued operation of Vermont Yankee.
(4)	The Vermont Yankee acquisition included a 10-year PPA under which the former owners will buy most of the power produced by the plant through March 21, 2012. The PPA includes an adjustment clause under which the prices specified in the PPA will be adjusted downward monthly, beginning in November 2005, if power market prices drop below PPA prices, which has not happened thus far.
(5)	Revenue on a per unit basis at which generation output, capacity, or a combination of both is expected to be sold to third parties (including offsetting positions), given existing contract or option exercise prices based on expected dispatch or capacity, excluding the revenue associated with the amortization of the below-market PPA for Palisades. Revenue may fluctuate due to factors including positive or negative basis differentials, option premiums and market prices at time of option expiration, costs to convert firm LD to unit-contingent, and other risk management costs. Also, average revenue under contract excludes payments owed under the value sharing agreement with NYPA.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy estimates that a $10 per MWh change in the annual average energy price in the markets in which the Entergy Wholesale Commodities nuclear business sells power, based on September 30, 2011 market conditions, planned generation volume, and hedged position, would have a corresponding effect on pre-tax net income of $6 million in 2011.

Some of the agreements to sell the power produced by Entergy Wholesale Commodities’ 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 Entergy Wholesale Commodities 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, 2011, based on power prices at that time, Entergy had liquidity exposure of $55 million under the guarantees in place supporting Entergy Nuclear Power Marketing (a subsidiary in the Entergy Wholesale Commodities segment) transactions, $20 million of guarantees that support letters of credit, and $6 million of posted cash collateral to the ISOs. As of September 30, 2011, the credit exposure associated with Entergy Wholesale Commodities assurance requirements would increase by $134 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, 2011, Entergy would have been required to provide approximately $47 million of additional cash or letters of credit under some of the agreements.

As of September 30, 2011, the counterparties or their guarantors for 99.9% of the planned energy output under contract for Entergy Wholesale Commodities through 2016 have public investment grade credit ratings and 0.1% is with load-serving entities without public credit ratings.

Nuclear Matters

After the nuclear incident in Japan resulting from the March 2011 earthquake and tsunami, the NRC established a task force to conduct a review of processes and regulations relating to nuclear facilities in the United States. The task force issued a near term (90-day) report in July 2011 that has made recommendations, which are currently being evaluated by the NRC. The lessons learned from the events in Japan and the NRC recommendations may affect future operations of U.S. nuclear facilities, including Entergy's, and could, among other things, result in increased costs and capital requirements associated with operating Entergy's nuclear plants.

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 updates of the impairment of long-lived assets discussion regarding Vermont Yankee see Note 11 to the financial statements herein.

Nuclear Decommissioning Costs

In the first quarter 2011, System Energy recorded a revision to its estimated decommissioning cost liability for Grand Gulf as a result of a revised decommissioning cost study. The revised estimate resulted in a $38.9 million reduction in its decommissioning liability, along with a corresponding reduction in the related regulatory asset.

New Accounting Pronouncements

The accounting standard-setting process, including projects between the FASB and the International Accounting Standards Board (IASB) to converge U.S. GAAP and International Financial Reporting Standards, is ongoing and the FASB and the IASB are each currently working on several projects that have not yet resulted in final pronouncements. Final pronouncements that result from these projects could have a material effect on Entergy’s future net income or financial position.

Table of Contents

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

In May 2011 the FASB issued ASU No. 2011-4, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs,” which states that the ASU explains how to measure fair value. The ASU states that: 1) the amendments in the ASU result in common fair value measurement and disclosure requirements in U.S. GAAP and International Financial Reporting Standards; 2) consequently, the amendments change the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements; 3) for many of the requirements, the FASB does not intend for the ASU to result in a change in the application of the requirements of current U.S. GAAP; 4) some of the amendments clarify the FASB’s intent about the application of existing fair value measurement requirements; and 5) other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. ASU No. 2011-4 is effective for Entergy for the first quarter 2012. Entergy does not expect ASU No. 2011-4 to affect materially its results of operations, financial position, or cash flows.

In June 2011 the FASB issued ASU No. 2011-5, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-5 is effective for Entergy for the first quarter 2012. ASU No. 2011-5 will have no effect on Entergy’s results of operations, financial position, or cash flows.

In September 2011 the FASB issued ASU No. 2011-8, “Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” The amendments permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a quantitative goodwill impairment assessment. ASU No. 2011-8 is effective for Entergy for the first quarter 2012. ASU No. 2011-8 will have no effect on Entergy’s results of operations, financial position, or cash flows.

Table of Contents

(Page left blank intentionally)

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands, Except Share Data)

OPERATING REVENUES
Electric	$	2,733,601		$	2,638,752		$	6,811,538		$	6,859,791
Natural gas		26,439			27,263			126,453			154,426
Competitive businesses		635,513			666,161			1,802,050			1,940,256
TOTAL		3,395,553			3,332,176			8,740,041			8,954,473

OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		849,982			748,863			1,921,007			1,939,077
Purchased power		475,335			484,694			1,289,180			1,376,055
Nuclear refueling outage expenses		64,566			64,885			191,517			191,395
Other operation and maintenance		708,821			808,688			2,077,066			2,211,382
Decommissioning		56,467			53,380			167,229			157,423
Taxes other than income taxes		152,044			138,217			406,493			400,597
Depreciation and amortization		283,581			264,621			812,672			789,392
Other regulatory charges (credits) - net		203,848			(1,814	)		204,338			15,555
TOTAL		2,794,644			2,561,534			7,069,502			7,080,876

OPERATING INCOME		600,909			770,642			1,670,539			1,873,597

OTHER INCOME
Allowance for equity funds used during construction		21,516			15,064			59,558			45,990
Interest and investment income		33,238			38,705			95,906			121,869
Miscellaneous - net		(14,137	)		(14,748	)		(40,498	)		(32,050	)
TOTAL		40,617			39,021			114,966			135,809

INTEREST EXPENSE
Interest expense		137,301			136,075			409,484			463,454
Allowance for borrowed funds used during construction		(9,713	)		(8,949	)		(27,397	)		(27,274	)
TOTAL		127,588			127,126			382,087			436,180

INCOME BEFORE INCOME TAXES		513,938			682,537			1,403,418			1,573,226

Income taxes (benefit)		(119,131	)		184,636			196,072			536,227

CONSOLIDATED NET INCOME		633,069			497,901			1,207,346			1,036,999

Preferred dividend requirements of subsidiaries		5,015			5,015			15,046			15,048

NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION	$	628,054		$	492,886		$	1,192,300		$	1,021,951


Earnings per average common share:
Basic	$	3.55		$	2.65		$	6.70		$	5.44
Diluted	$	3.53		$	2.62		$	6.67		$	5.38
Dividends declared per common share	$	0.83		$	0.83		$	2.49		$	2.41

Basic average number of common shares outstanding		176,950,469			185,962,431			177,857,667			187,968,582
Diluted average number of common shares outstanding		177,723,020			187,777,172			178,805,215			189,914,439

See Notes to Financial Statements.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)
	2011			2010
	(In Thousands)

OPERATING ACTIVITIES
Consolidated net income	$	1,207,346		$	1,036,999
Adjustments to reconcile consolidated net income to net cash flow
provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization		1,315,730			1,259,543
Deferred income taxes, investment tax credits, and non-current taxes accrued		(5,979	)		524,359
Changes in assets and liabilities:
Receivables		(213,524	)		(243,326	)
Fuel inventory		12,677			3,328
Accounts payable		(238,879	)		44,348
Prepaid taxes and taxes accrued		245,242			45,198
Interest accrued		(53,307	)		(10,982	)
Deferred fuel		(119,481	)		(65,655	)
Other working capital accounts		(31,319	)		(162,284	)
Provisions for estimated losses		(4,608	)		258,962
Other regulatory assets		250,747			482,960
Pension and other postretirement liabilities		(275,690	)		(142,420	)
Other assets and liabilities		40,801			134,059
Net cash flow provided by operating activities		2,129,756			3,165,089

INVESTING ACTIVITIES
Construction/capital expenditures		(1,460,668	)		(1,410,708	)
Allowance for equity funds used during construction		61,096			45,990
Nuclear fuel purchases		(475,418	)		(315,780	)
Payment for purchase of plant		(299,590	)		-
Proceeds from sale of assets and businesses		6,531			9,675
Insurance proceeds received for property damages		-			7,894
Changes in securitization account		(443	)		(23,182	)
NYPA value sharing payment		(72,000	)		(72,000	)
Payments to storm reserve escrow account		(5,043	)		(294,901	)
Receipts from storm reserve escrow account		-			9,925
Decrease (increase) in other investments		(60,693	)		117,696
Proceeds from nuclear decommissioning trust fund sales		1,053,089			1,974,008
Investment in nuclear decommissioning trust funds		(1,142,364	)		(2,043,361	)
Net cash flow used in investing activities		(2,395,503	)		(1,994,744	)

See Notes to Financial Statements.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)
		2011			2010
	(In Thousands)

FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt		1,535,634			2,272,224
Common stock and treasury stock		32,889			45,763
Retirement of long-term debt		(947,401	)		(2,113,927	)
Repurchase of common stock		(234,632	)		(665,624	)
Changes in credit borrowings - net		30,036			(18,932	)
Dividends paid:
Common stock		(443,290	)		(453,683	)
Preferred stock		(15,046	)		(15,048	)
Net cash flow used in financing activities		(41,810	)		(949,227	)

Effect of exchange rates on cash and cash equivalents		225			250

Net increase (decrease) in cash and cash equivalents		(307,332	)		221,368

Cash and cash equivalents at beginning of period		1,294,472			1,709,551

Cash and cash equivalents at end of period	$	987,140		$	1,930,919



SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized	$	413,525		$	400,124
Income taxes	$	(11	)	$	32,964


See Notes to Financial Statements.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	135,673		$	76,290
Temporary cash investments		851,467			1,218,182
Total cash and cash equivalents		987,140			1,294,472
Securitization recovery trust account		43,487			43,044
Accounts receivable:
Customer		790,355			602,796
Allowance for doubtful accounts		(32,139	)		(31,777	)
Other		161,062			161,662
Accrued unbilled revenues		329,095			302,901
Total accounts receivable		1,248,373			1,035,582
Deferred fuel costs		87,297			64,659
Accumulated deferred income taxes		5,292			8,472
Fuel inventory - at average cost		194,848			207,520
Materials and supplies - at average cost		880,619			866,908
Deferred nuclear refueling outage costs		232,852			218,423
System agreement cost equalization		190,174			52,160
Prepaid taxes		56,565			301,807
Prepayments and other		227,851			246,036
TOTAL		4,154,498			4,339,083

OTHER PROPERTY AND INVESTMENTS
Investment in affiliates - at equity		43,934			40,697
Decommissioning trust funds		3,566,111			3,595,716
Non-utility property - at cost (less accumulated depreciation)		258,967			257,847
Other		413,686			405,946
TOTAL		4,282,698			4,300,206

PROPERTY, PLANT AND EQUIPMENT
Electric		38,484,712			37,153,061
Property under capital lease		789,898			800,078
Natural gas		339,923			330,608
Construction work in progress		1,904,313			1,661,560
Nuclear fuel		1,403,982			1,377,962
TOTAL PROPERTY, PLANT AND EQUIPMENT		42,922,828			41,323,269
Less - accumulated depreciation and amortization		18,123,801			17,474,914
PROPERTY, PLANT AND EQUIPMENT - NET		24,799,027			23,848,355

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		737,475			845,725
Other regulatory assets (includes securitization property of
$1,029,433 as of September 30, 2011 and $882,346 as of		3,700,902			3,838,237
December 31, 2010)
Deferred fuel costs		172,202			172,202
Goodwill		377,172			377,172
Accumulated deferred income taxes		58,001			54,523
Other		879,523			909,773
TOTAL		5,925,275			6,197,632

TOTAL ASSETS	$	39,161,498		$	38,685,276

See Notes to Financial Statements.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

		2011			2010
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	2,022,410		$	299,548
Notes payable		144,871			154,135
Accounts payable		882,651			1,181,099
Customer deposits		347,185			335,058
Accumulated deferred income taxes		64,821			49,307
Interest accrued		164,378			217,685
Deferred fuel costs		69,566			166,409
Obligations under capital leases		3,578			3,388
Pension and other postretirement liabilities		40,570			39,862
System agreement cost equalization		190,190			52,160
Other		231,123			277,598
TOTAL		4,161,343			2,776,249

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		8,403,453			8,573,646
Accumulated deferred investment tax credits		281,112			292,330
Obligations under capital leases		39,341			42,078
Other regulatory liabilities		645,843			539,026
Decommissioning and asset retirement cost liabilities		3,274,479			3,148,479
Accumulated provisions		391,712			395,250
Pension and other postretirement liabilities		1,898,966			2,175,364
Long-term debt (includes securitization bonds of $1,086,277 as of
September 30, 2011 and $931,131 as of December 31, 2010)		10,241,993			11,317,157
Other		547,146			618,559
TOTAL		25,724,045			27,101,889

Commitments and Contingencies

Subsidiaries' preferred stock without sinking fund		216,748			216,738

EQUITY
Common Shareholders' Equity:
Common stock, $.01 par value, authorized 500,000,000 shares;
issued 254,752,788 shares in 2011 and in 2010		2,548			2,548
Paid-in capital		5,362,959			5,367,474
Retained earnings		9,439,000			8,689,401
Accumulated other comprehensive loss		(138,337	)		(38,212	)
Less - treasury stock, at cost (78,677,119 shares in 2011 and
76,006,920 shares in 2010)		5,700,808			5,524,811
Total common shareholders' equity		8,965,362			8,496,400
Subsidiaries' preferred stock without sinking fund		94,000			94,000
TOTAL		9,059,362			8,590,400

TOTAL LIABILITIES AND EQUITY	$	39,161,498		$	38,685,276

See Notes to Financial Statements.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2011 and 2010
(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, 2009	$	94,000		$	2,548	$	(4,727,167	)	$	5,370,042		$	8,043,122		$	(75,185	)	$	8,707,360

Consolidated net income (a)		15,048			-		-			-			1,021,951			-			1,036,999
Other comprehensive income:
Cash flow hedges net unrealized gain (net of tax expense of $69,053)		-			-		-			-			-			112,911			112,911
Pension and other postretirement liabilities (net of tax expense of $4,777)		-			-		-			-			-			6,011			6,011
Net unrealized investment losses (net of tax expense of $28,421)		-			-		-			-			-			29,078			29,078
Foreign currency translation (net of tax benefit of $135)		-			-		-			-			-			(249	)		(249	)
Total comprehensive income																			1,184,750

Common stock repurchases		-			-		(665,624	)		-			-			-			(665,624	)
Common stock issuances related to stock plans		-			-		71,257			(2,951	)		-			-			68,306
Common stock dividends declared		-			-		-			-			(453,992	)		-			(453,992	)
Preferred dividend requirements of subsidiaries (a)		(15,048	)		-		-			-			-			-			(15,048	)

Balance at September 30, 2010	$	94,000		$	2,548	$	(5,321,534	)	$	5,367,091		$	8,611,081		$	72,566		$	8,825,752


Balance at December 31, 2010	$	94,000		$	2,548	$	(5,524,811	)	$	5,367,474		$	8,689,401		$	(38,212	)	$	8,590,400

Consolidated net income (a)		15,046			-		-			-			1,192,300			-			1,207,346
Other comprehensive income:
Cash flow hedges net unrealized loss (net of tax benefit of $50,884)		-			-		-			-			-			(84,321	)		(84,321	)
Pension and other postretirement liabilities (net of tax expense of $4,704)		-			-		-			-			-			9,255			9,255
Net unrealized investment gains (net of tax benefit of $24,014)		-			-		-			-			-			(25,478	)		(25,478	)
Foreign currency translation (net of tax expense of $226)		-			-		-			-			-			419			419
Total comprehensive income																			1,107,221

Common stock repurchases		-			-		(234,632	)		-			-			-			(234,632	)
Common stock issuances related to stock plans		-			-		58,635			(4,515	)		-			-			54,120
Common stock dividends declared		-			-		-			-			(442,701	)		-			(442,701	)
Preferred dividend requirements of subsidiaries (a)		(15,046	)		-		-			-			-			-			(15,046	)

Balance at September 30, 2011	$	94,000		$	2,548	$	(5,700,808	)	$	5,362,959		$	9,439,000		$	(138,337	)	$	9,059,362

See Notes to Financial Statements.

(a) Consolidated net income and preferred dividend requirements of subsidiaries for both 2010 and 2011 include $10.1 million of preferred dividends on subsidiaries' preferred stock without sinking fund that is not presented as equity.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended				Increase/
Description	2011		2010		(Decrease)			%
	(Dollars in Millions)
Utility Electric Operating Revenues:
Residential	$	1,195	$	1,149	$	46			4
Commercial		718		688		30			4
Industrial		674		572		102			18
Governmental		59		61		(2	)		(3	)
Total retail		2,646		2,470		176			7
Sales for resale		70		71		(1	)		(1	)
Other		18		98		(80	)		(82	)
Total	$	2,734	$	2,639	$	95			4

Utility Billed Electric Energy
Sales (GWh):
Residential		12,376		12,365		11			-
Commercial		8,655		8,660		(5	)		-
Industrial		11,024		10,276		748			7
Governmental		689		681		8			1
Total retail		32,744		31,982		762			2
Sales for resale		1,038		1,063		(25	)		(2	)
Total		33,782		33,045		737			2


Entergy Wholesale Commodities:
Operating Revenues	$	641	$	672	$	(31	)		(5	)
Billed Electric Energy Sales (GWh)		11,284		10,736		548			5


	Nine Months Ended				Increase/
Description		2011		2010	(Decrease)			%
	(Dollars in Millions)
Utility Electric Operating Revenues:
Residential	$	2,703	$	2,691	$	12			-
Commercial		1,794		1,776		18			1
Industrial		1,742		1,663		79			5
Governmental		158		163		(5	)		(3	)
Total retail		6,397		6,293		104			2
Sales for resale		198		216		(18	)		(8	)
Other		217		351		(134	)		(38	)
Total	$	6,812	$	6,860	$	(48	)		(1	)

Utility Billed Electric Energy
Sales (GWh):
Residential		29,411		29,715		(304	)		(1	)
Commercial		22,048		21,935		113			1
Industrial		30,681		28,871		1,810			6
Governmental		1,875		1,854		21			1
Total retail		84,015		82,375		1,640			2
Sales for resale		3,021		3,351		(330	)		(10	)
Total		87,036		85,726		1,310			2


Entergy Wholesale Commodities:
Operating Revenues	$	1,819	$	1,954	$	(135	)		(7	)
Billed Electric Energy Sales (GWh)		32,455		32,362		93			-

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. COMMITMENTS AND CONTINGENCIES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy and the Registrant Subsidiaries are involved in a number of legal, regulatory, and tax proceedings before various courts, regulatory commissions, and governmental agencies in the ordinary course of business. While management is unable to predict the outcome of such proceedings, management does not believe that the ultimate resolution of these matters will have a material adverse effect on Entergy’s results of operations, cash flows, or financial condition, except as otherwise discussed in the Form 10-K or in this report. Entergy discusses regulatory proceedings in Note 2 to the financial statements in the Form 10-K and herein, discusses tax proceedings in Note 3 to the financial statements in the Form 10-K and Note 10 to the financial statements herein, and discusses a judicial proceeding involving Vermont Yankee in Note 11 to the financial statements herein.

Vidalia Purchased Power Agreement

See Note 8 to the financial statements in the Form 10-K for a discussion of Entergy Louisiana’s agreement extending through the year 2031 to purchase energy generated by a hydroelectric facility known as the Vidalia project. Also as discussed in the Form 10-K, in an LPSC-approved settlement related to benefits from the tax treatment of the Vidalia contract, Entergy Louisiana agreed to credit customer rates for a portion of the benefits. See Note 10 to the financial statements herein for discussion of an August 2011 settlement with the IRS regarding the mark-to-market income tax treatment of various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity under the Vidalia contract, and Entergy Louisiana’s agreement to credit customer rates for a portion of the benefits.

Nuclear Insurance

See Note 8 to the financial statements in the Form 10-K for information on nuclear liability and property insurance associated with Entergy’s nuclear power plants.

Conventional Property Insurance

See Note 8 to the financial statements in the Form 10-K for information on Entergy’s non-nuclear property insurance program.

Employment Litigation

The Registrant Subsidiaries and other Entergy subsidiaries are responding to various lawsuits in both state and federal courts and to other labor-related proceedings filed by current and former employees and third parties not selected for open positions. These actions include, but are not limited to, allegations of wrongful employment actions; wage disputes and other claims under the Fair Labor Standards Act or its state counterparts; claims of race, gender and disability discrimination; disputes arising under collective bargaining agreements; unfair labor practice proceedings and other administrative proceedings before the National Labor Relations Board; claims of retaliation; and claims for or regarding benefits under various Entergy Corporation sponsored plans. Entergy and the Registrant Subsidiaries are responding to these lawsuits and proceedings and deny liability to the claimants.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Asbestos Litigation (Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas)

See Note 8 to the financial statements in the Form 10-K for information regarding asbestos litigation at Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas.

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets

See Note 2 to the financial statements in the Form 10-K for information regarding regulatory assets in the Utility business presented on the balance sheets of Entergy and the Registrant Subsidiaries. Following are updates to that information.

Fuel and Purchased Power Cost Recovery

Entergy Gulf States Louisiana

In January 2003 the LPSC authorized its staff to initiate a proceeding to audit the fuel adjustment clause filings of Entergy Gulf States Louisiana and its affiliates. The audit includes a review of the reasonableness of charges flowed by Entergy Gulf States Louisiana through its fuel adjustment clause for the period 1995 through 2004. The LPSC Staff issued its audit report in December 2010. The report recommended the disallowance of $23 million of costs which, with interest, would total $43 million. $2 million of this total relates to a realignment to and recovery through base rates of certain SO2 costs. Entergy Gulf States Louisiana filed comments disputing the findings in the report. Entergy Gulf States Louisiana and the LPSC Staff reached a settlement to resolve the audit that requires Entergy Gulf States Louisiana to refund $18 million to customers, including the realignment to base rates of the $2 million of SO2 costs. Entergy Gulf States Louisiana and the LPSC Staff filed the uncontested settlement, the ALJ held a stipulation hearing in September 2011, and the LPSC approved the settlement in October 2011. The refund will be made in the November 2011 billing cycle. Entergy Gulf States Louisiana had previously recorded provisions for the estimated outcome of this proceeding.

In April 2010 the LPSC authorized its staff to initiate an audit of Entergy Gulf States Louisiana’s purchased gas adjustment clause filings for its gas distribution operations. The audit includes a review of the reasonableness of charges flowed through by Entergy Gulf States Louisiana for the period from 2003 through 2008. Discovery was completed and, in June 2011, the LPSC Staff filed an audit report generally supporting the appropriateness of charges flowed through the purchased gas adjustment clause filings. The LPSC approved the staff audit report in October 2011.

Entergy Texas

In December 2010, Entergy Texas filed with the PUCT a request to refund fuel cost recovery over-collections through October 2010. Pursuant to a stipulation among the parties that was approved by the PUCT in March 2011, Entergy Texas refunded over-collections through November 2010 of approximately $73 million, including interest through the refund period. The refund was made for most customers over a three-month period that began with the February 2011 billing cycle.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Little Gypsy Repowering Project (Entergy and Entergy Louisiana)

See the Form 10-K for a discussion of the Little Gypsy repowering project. As discussed in the Form 10-K, in January 2011 all parties conducted a mediation on the disputed issues, and thereafter, reached agreement on a settlement of all disputed issues, including cost recovery and cost allocation. The settlement provides for Entergy Louisiana to recover $200 million as of March 31, 2011, and carrying costs on that amount on specified terms thereafter. The settlement also provides for Entergy Louisiana to recover the approved project costs by securitization. In April 2011, Entergy Louisiana filed an application with the LPSC to authorize the securitization of the investment recovery costs associated with the project and to issue a financing order by which Entergy Louisiana may accomplish such securitization. In August 2011 the LPSC issued an order approving the settlement and also issued a financing order for the securitization. See Note 4 to the financial statements for a discussion of the September 2011 issuance of the securitization bonds.

Retail Rate Proceedings

See Note 2 to the financial statements in the Form 10-K for detailed information regarding retail rate proceedings involving the Utility operating companies. The following are updates to the Form 10-K.

Filings with the LPSC

(Entergy Gulf States Louisiana)

In January 2011, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2010. The filing showed an earned return on common equity of 8.84% and a revenue deficiency of $0.3 million. In March 2011, the LPSC Staff filed its findings, suggesting an adjustment that will produce an 11.76% earned return on common equity for the test year and a $0.2 million rate reduction. Entergy Gulf States Louisiana implemented the $0.2 million rate reduction effective with the May 2011 billing cycle. The LPSC docket is now closed.

In May 2011, Entergy Gulf States Louisiana made a special formula rate plan rate implementation filing with the LPSC that implements effective with the May 2011 billing cycle a $5.1 million rate decrease to reflect adjustments in accordance with a previous LPSC order relating to the acquisition of Unit 2 of the Acadia Energy Center by Entergy Louisiana. As a result of the closing of the acquisition and termination of the pre-acquisition power purchase agreement with Acadia, Entergy Gulf States Louisiana’s allocation of capacity related to this unit ended, resulting in a reduction in the additional capacity revenue requirement.

In May 2011, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2010 test year. The filing reflects an 11.11% earned return on common equity, which is within the allowed earnings bandwidth, indicating no cost of service rate change is necessary under the formula rate plan. The filing also reflects a $22.8 million rate decrease for incremental capacity costs. Entergy Gulf States Louisiana and the LPSC Staff subsequently filed a joint report that also stated that no cost of service rate change is necessary under the formula rate plan, and the LPSC approved it in October 2011. Unless otherwise ordered by the LPSC, the 2010 test year is the final evaluation period of Entergy Gulf States Louisiana’s formula rate plan. Entergy Gulf States Louisiana has filed a motion requesting that the LPSC extend the formula rate plan for an additional year. The LPSC has indicated that it will act on that request at its November 9, 2011 meeting.

(Entergy Louisiana)

In May 2011, Entergy Louisiana made a special formula rate plan rate implementation filing with the LPSC that implements effective with the May 2011 billing cycle a $43.1 million net rate increase to reflect adjustments in accordance with a previous LPSC order relating to the acquisition of Unit 2 of the Acadia Energy Center. The net rate increase represents the decrease in the additional capacity revenue requirement resulting from the termination of the power purchase agreement with Acadia and the increase in the revenue requirement resulting from the ownership of the Acadia facility. In August 2011, Entergy Louisiana made a filing to correct the May 2011 filing and decrease the rate by $1.1 million.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

In May 2011, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2010 test year. The filing reflects an 11.07% earned return on common equity, which is just outside of the allowed earnings bandwidth and results in no cost of service rate change under the formula rate plan. The filing also reflects a very slight ($9 thousand) rate increase for incremental capacity costs. Entergy Louisiana and the LPSC Staff subsequently filed a joint report that reflects an 11.07% earned return and results in no cost of service rate change under the formula rate plan, and the LPSC approved the joint report in October 2011. Unless otherwise ordered by the LPSC, the 2010 test year is the final evaluation period of Entergy Louisiana’s formula rate plan. Entergy Louisiana has filed a motion requesting that the LPSC extend the formula rate plan for an additional year. The LPSC has indicated that it will act on that request at its November 9, 2011 meeting.

Filings with the MPSC

In March 2011, Entergy Mississippi submitted its formula rate plan 2010 test year filing. The filing shows an earned return on common equity of 10.65% for the test year, which is within the earnings bandwidth and results in no change in rates. The filing is currently subject to MPSC review.

Filings with the City Council

In May 2011, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports for the 2010 test year. The filings requested a $6.5 million electric rate decrease and a $1.1 million gas rate decrease. Entergy New Orleans and the City Council’s Advisors reached a settlement that results in an $8.5 million incremental electric rate decrease and a $1.6 million gas rate decrease. The settlement also provides for the deferral of $13.4 million of Michoud plant maintenance expenses incurred in 2010 and the establishment of a regulatory asset that will be amortized over the period October 2011 through September 2018. The City Council approved the settlement in September 2011. The new rates are effective with the first billing cycle of October 2011.

System Agreement Cost Equalization Proceedings

See Note 2 to the financial statements in the Form 10-K for detailed information regarding the System Agreement Cost Equalization Proceedings. The following are updates to the Form 10-K.

As discussed in the Form 10-K, in June 2005, and on rehearing in December 2005, the FERC issued orders finding that, among other things, the System Agreement no longer roughly equalizes total production costs among the Utility operating companies and that, in order to reach rough production cost equalization, a bandwidth remedy should be imposed by which each company’s total annual production costs will have to be within +/- 11% of Entergy System average total annual production costs. In April 2008, the DC Circuit concluded that the FERC’s orders had failed to adequately explain both its conclusion that it was prohibited from ordering refunds for the 20-month period from September 13, 2001 - May 2, 2003 and its determination to implement the bandwidth remedy commencing on January 1, 2006, rather than June 1, 2005. The DC Circuit remanded the case to FERC for further proceedings on these issues.

On October 20, 2011, the FERC issued an order addressing the D.C. Circuit remand on these two issues. On the first issue, the FERC concluded that it did have the authority to order refunds, but decided that it would exercise its equitable discretion and not require refunds for the 20-month period from September 13, 2001 - May 2, 2003. Because the ruling on refunds relied on findings in the interruptible load proceeding that is discussed below, the FERC concluded that the refund ruling will be held in abeyance pending the outcome of the rehearing requests in that proceeding. On the second issue, the FERC reversed its prior decision and ordered that the prospective bandwidth remedy begins on June 1, 2005 (the date of its initial order in the proceeding) rather than January 1, 2006, as it had previously ordered. Pursuant to the October 20, 2011 order, Entergy is required to calculate the additional bandwidth payments for the period June - December 2005 utilizing the bandwidth formula tariff prescribed by the FERC that was filed in a December 2006 compliance filing and accepted by the FERC in an April 2007 order. Entergy is required to

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

submit a compliance filing within 60 days of the date of the order that provides the payments and receipts among the Utility operating companies, and is required to make the payments/receipts among the Utility operating companies within 90 days of the date of the order. As is the case with bandwidth remedy payments, these payments and receipts will be paid by Utility operating company customers to other Utility operating company customers.

The Utility operating companies have recorded liabilities and assets based on the preliminary estimates of the payments and receipts required to implement the FERC’s remedy for the period June - December 2005. This estimate does not include other payments/receipts among the Utility operating companies that may occur in 2012 based on calendar year 2011 production costs.

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$157
Entergy Gulf States Louisiana	($82)
Entergy Louisiana	$-
Entergy Mississippi	($21)
Entergy New Orleans	$-
Entergy Texas	($54)

The actual payments/receipts related to implementing the bandwidth remedy for the period from June – December 2005 will not be finalized until the Utility operating companies’ compliance filing has been completed. The actual payments/receipts may vary from the above estimates, which are preliminary. The compliance filing is due to be filed at the FERC by December 19, 2011.

Rough Production Cost Equalization Rates

2011 Rate Filing Based on Calendar Year 2010 Production Costs

In May 2011, Entergy filed with the FERC the 2011 rates in accordance with the FERC’s orders in the System Agreement proceeding. The filing shows the following payments/receipts among the Utility operating companies for 2011, based on calendar year 2010 production costs, commencing for service in June 2011, are necessary to achieve rough production cost equalization under the FERC’s orders:

	Payments or (Receipts)
	(In Millions)
Entergy Arkansas	$77
Entergy Gulf States Louisiana	($12)
Entergy Louisiana	$-
Entergy Mississippi	($40)
Entergy New Orleans	($25)
Entergy Texas	$-

Several parties intervened in the proceeding at the FERC, including the LPSC, which filed a protest as well. In July 2011, the FERC accepted Entergy's proposed rates for filing, effective June 1, 2011, subject to refund, set the proceeding for hearing procedures, and then held those procedures in abeyance pending FERC decisions in the prior production cost proceedings currently before the FERC on review.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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, and supplemented the filing in September 2010. 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. Subsequently, in January 2011 the ALJ issued an order directing the parties and FERC Staff to show cause why this proceeding should not be stayed pending the issuance of FERC decisions in the prior production cost proceedings currently before the FERC on review. In March 2011 the ALJ issued an order placing this proceeding in abeyance.

2008 Rate Filing Based on Calendar Year 2007 Production Costs

As discussed in the Form 10-K a hearing on remaining issues in the proceeding was completed in June 2009, and in September 2009 the ALJ issued an initial decision. Entergy, the APSC, the LPSC, and the MPSC submitted briefs on exceptions in the proceeding. In October 2011 the FERC issued an order on the ALJ’s initial decision. The FERC’s order may result in a minor reallocation of payments/receipts among the Utility operating companies on one issue in the 2008 rate filing.

Interruptible Load Proceeding

See the Form 10-K for a discussion of the interruptible load proceeding, including the FERC’s 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 in June 2009. 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 requested rehearing of the FERC’s decision. In June 2011 the FERC issued an order granting rehearing in part and denying rehearing in part, in which the FERC determined to invoke its discretion to deny refunds. The FERC held that in this case where “the Entergy system as a whole collected the proper level of revenue, but, as was later established, incorrectly allocated peak load responsibility among the various Entergy operating companies….the Commission will apply here our usual practice in such cases, invoking our equitable discretion to not order refunds, notwithstanding our authority to do so.” The LPSC has requested rehearing of the FERC’s June 2011 decision. On October 6, 2011 the FERC issued an “Order Establishing Paper Hearing” inviting parties that oppose refunds to file briefs within 30 days addressing the LPSC’s argument that FERC precedent supports refunds under the circumstances present in this proceeding. Parties that favor refunds are then invited to file reply briefs within 21 days of the date that the initial briefs are due.

In September 2010 the FERC had issued an order setting the refund report filed in the proceeding in November 2007 for hearing and settlement judge procedures. In May 2011, Entergy filed a settlement agreement that resolved all issues relating to the refund report set for hearing. In June 2011 the settlement judge certified the settlement as uncontested and the settlement agreement is currently pending before the FERC. In July 2011, Entergy filed an amended/corrected refund report and a motion to defer action on the settlement agreement until after the FERC rules on the LPSC’s rehearing request regarding the June 2011 decision denying refunds.

Prior to the FERC’s June 2011 order on rehearing, Entergy Arkansas filed an application in November 2010 with the APSC for recovery of the refund that it paid. The APSC denied Entergy Arkansas’s application, and also denied Entergy Arkansas’s petition for rehearing. If the FERC were to order Entergy Arkansas to pay refunds on rehearing in the interruptible load proceeding the APSC’s decision would trap FERC-approved costs at Entergy Arkansas with no regulatory-approved mechanism to recover them. In August 2011, Entergy Arkansas filed a complaint in the United States District Court for the Eastern District of Arkansas asking for a declaratory judgment. In the complaint Entergy Arkansas asks the court to declare that the rejection of Entergy Arkansas’s application by the APSC is preempted by the Federal Power Act. The APSC filed a motion to dismiss the complaint and a decision is pending.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

NOTE 3. EQUITY (Entergy Corporation, Entergy Gulf States Louisiana, and Entergy Louisiana)

Common Stock

Earnings per Share

The following tables present Entergy’s basic and diluted earnings per share calculations included on the consolidated income statement:

	For the Three Months Ended September 30,
	2011							2010
	(In Millions, Except Per Share Data)

Basic earnings per share	Income		Shares		$/share			Income		Shares		$/share

Net income attributable to Entergy Corporation	$	628.1		177.0	$	3.55		$	492.9		186.0	$	2.65
Average dilutive effect of:
Stock options		-		0.7		(0.02	)		-		1.8		(0.03	)

Diluted earnings per share	$	628.1		177.7	$	3.53		$	492.9		187.8	$	2.62

	For the Nine Months Ended September 30,
	2011							2010
	(In Millions, Except Per Share Data)

Basic earnings per share	Income		Shares		$/share			Income		Shares		$/share

Net income attributable to Entergy Corporation	$	1,192.3		177.9	$	6.70		$	1,022.0		188.0	$	5.44
Average dilutive effect of:
Stock options		-		0.9		(0.03	)		-		1.9		(0.06	)

Diluted earnings per share	$	1,192.3		178.8	$	6.67		$	1,022.0		189.9	$	5.38

Entergy’s stock options and other equity compensation plans are discussed in Note 5 herein, and in Note 12 to the financial statements in the Form 10-K.

Treasury Stock

During the nine months ended September 30, 2011, Entergy Corporation issued 804,801 shares of its previously repurchased common stock to satisfy stock option exercises and other stock-based awards. Also during the nine months ended September 30, 2011, Entergy Corporation repurchased 3,475,000 shares of its common stock for a total purchase price of $234.6 million.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Retained Earnings

On October 28, 2011 Entergy Corporation’s Board of Directors declared a common stock dividend of $0.83 per share, payable on December 1, 2011 to holders of record as of November 10, 2011.

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana. Accumulated other comprehensive loss in the balance sheets included the following components:

	Entergy						Entergy Gulf States Louisiana						Entergy Louisiana
	September 30, 2011			December 31, 2010			September 30, 2011			December 31, 2010			September 30, 2011			December 31, 2010
	(In Thousands)

Cash flow hedges net unrealized gain	$	21,937		$	106,258		$	-		$	-		$	-		$	-
Pension and other postretirement liabilities		(267,211	)		(276,466	)		(38,589	)		(40,304	)		(23,495	)		(24,962	)
Net unrealized investment gains		104,207			129,685			-			-			-			-
Foreign currency translation		2,730			2,311			-			-			-			-
Total	$	(138,337	)	$	(38,212	)	$	(38,589	)	$	(40,304	)	$	(23,495	)	$	(24,962	)

Other comprehensive income and total comprehensive income for the nine months ended September 30, 2011 and 2010 are presented in Entergy’s, Entergy Gulf States Louisiana’s, and Entergy Louisiana’s Statements of Changes in Equity and Comprehensive Income. Other comprehensive income and total comprehensive income, for the three months ended September 30, 2011 and 2010, are (all of the components of other comprehensive income are attributable to common equity):

	Entergy
Three Months Ended September 30,	2011			2010
	(In Thousands)

Consolidated net income	$	633,069		$	497,901
Other comprehensive income
Cash flow hedges net unrealized gain (loss) (a)		(12,597	)		53,840
Pension and other postretirement liabilities (b)		2,657			1,001
Net unrealized investment gain (loss) (c)		(53,349	)		48,280
Foreign currency translation (d)		108			510
Total	$	569,888		$	601,532

(a)	Net of tax expense (benefit) of ($9,041) and $32,466, respectively.
(b)	Net of tax expense of $1,647 and $2,236, respectively.
(c)	Net of tax expense (benefit) of ($52,740) and $44,499, respectively.
(d)	Net of tax expense of $59 and $275, respectively.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

	Entergy Gulf States Louisiana				Entergy Louisiana
Three Months Ended September 30,	2011		2010		2011		2010
	(In Thousands)

Net income	$	51,946	$	76,939	$	337,722	$	94,320
Other comprehensive income
Pension and other postretirement liabilities (e)		486		516		366		444
Total	$	52,432	$	77,455	$	338,088	$	94,764

(e)	Net of tax expense of $507, $508, $366, and $378, respectively.

NOTE 4. REVOLVING CREDIT FACILITIES, LINES OF CREDIT, SHORT-TERM BORROWINGS, AND LONG-TERM DEBT (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy Corporation has in place a credit facility that has a borrowing capacity of approximately $3.5 billion and expires in August 2012, which Entergy intends to renew before expiration. Because the facility is now within one year of its expiration date, borrowings outstanding on the facility are classified as currently maturing long-term debt on the balance sheet. Entergy Corporation also has the ability to issue letters of credit against the total borrowing capacity of the credit facility. The facility fee is currently 0.125% of the commitment amount. Facility fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest rate for the nine months ended September 30, 2011 was 0.746% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of September 30, 2011.

Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)

$3,463	$1,870	$25	$1,568

Entergy Corporation’s facility requires it to maintain a consolidated debt ratio of 65% or less of its total capitalization. Entergy is 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 maturity date may occur.

Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas each had credit facilities available as of September 30, 2011 as follows:

Company	Expiration Date	Amount of Facility	Interest Rate (a)	Amount Drawn as of September 30, 2011

Entergy Arkansas	April 2012	$78 million (b)	3.25%	-
Entergy Gulf States Louisiana	August 2012	$100 million (c)	0.71%	-
Entergy Louisiana	August 2012	$200 million (d)	0.71%	-
Entergy Mississippi	May 2012	$35 million (e)	1.99%	-
Entergy Mississippi	May 2012	$25 million (e)	1.99%	-
Entergy Mississippi	May 2012	$10 million (e)	1.99%	-
Entergy Texas	August 2012	$100 million (f)	0.71%	-

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

(a)	The interest rate is the rate as of September 30, 2011 that would be applied to outstanding borrowings under the facility.
(b)	The credit facility requires Entergy Arkansas to maintain a debt ratio of 65% or less of its total capitalization. Borrowings under the Entergy Arkansas credit facility may be secured by a security interest in its accounts receivable.
(c)	The credit facility allows Entergy Gulf States Louisiana to issue letters of credit against the borrowing capacity of the facility. As of September 30, 2011, no letters of credit were outstanding. The credit facility requires Entergy Gulf States Louisiana to maintain a consolidated debt ratio of 65% or less of its total capitalization.
(d)	The credit facility allows Entergy Louisiana to issue letters of credit against the borrowing capacity of the facility. As of September 30, 2011, no letters of credit were outstanding. The credit facility requires Entergy Louisiana to maintain a consolidated debt ratio of 65% or less of its total capitalization.
(e)	Borrowings under the Entergy Mississippi credit facilities may be secured by a security interest in its accounts receivable. Entergy Mississippi is required to maintain a consolidated debt ratio of 65% or less of its total capitalization.
(f)	The credit facility allows Entergy Texas to issue letters of credit against the borrowing capacity of the facility. As of September 30, 2011, no letters of credit were outstanding. The credit facility requires Entergy Texas to maintain a consolidated debt ratio of 65% or less of its total capitalization. Pursuant to the terms of the credit agreement securitization bonds are excluded from debt and capitalization in calculating the debt ratio.

The facility fees on the credit facilities range from 0.09% to 0.15% of the commitment amount.

The short-term borrowings of the Registrant Subsidiaries are limited to amounts authorized by the FERC. The current FERC-authorized limits are effective through October 31, 2013. In addition to borrowings from commercial banks, these companies are authorized under a FERC order to borrow from the Entergy System money pool. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ dependence on external short-term borrowings. Borrowings from the money pool and external borrowings combined may not exceed the FERC-authorized limits. The following are the FERC-authorized limits for short-term borrowings and the outstanding short-term borrowings as of September 30, 2011 (aggregating both money pool and external short-term borrowings) for the Registrant Subsidiaries:

	Authorized		Borrowings
	(In Millions)

Entergy Arkansas	$	250	$	32
Entergy Gulf States Louisiana	$	200		-
Entergy Louisiana	$	250		-
Entergy Mississippi	$	175	$	16
Entergy New Orleans	$	100		-
Entergy Texas	$	200		-
System Energy	$	200		-

Variable Interest Entities (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, and System Energy)

See Note 18 to the financial statements in the Form 10-K for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIE). The variable interest entities have credit facilities and also issue commercial paper to finance the acquisition and ownership of nuclear fuel as follows as of September 30, 2011:

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Company	Expiration Date	Amount of Facility	Weighted Average Interest Rate on Borrowings (a)	Amount Outstanding as of September 30, 2011
	(Dollars in Millions)

Entergy Arkansas VIE	July 2013	$85	2.40%	$60.3
Entergy Gulf States Louisiana VIE	July 2013	$85	2.13%	$42.7
Entergy Louisiana VIE	July 2013	$90	2.26%	$56.5
System Energy VIE	July 2013	$100	-	-

(a) Includes letter of credit fees and bank fronting fees on commercial paper issuances by the VIEs for Entergy Arkansas, Entergy Louisiana, and System Energy. The VIE for Entergy Gulf States Louisiana does not issue commercial paper, but borrows directly on its bank credit facility.

The amount outstanding on Entergy Gulf States Louisiana’s credit facility is included in long-term debt on its balance sheet and the commercial paper outstanding for the other VIEs is classified as a current liability on the respective balance sheets. The commitment fees on the credit facilities are 0.20% of the undrawn commitment amount. Each credit facility requires the respective lessee (Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, or Entergy Corporation as guarantor for System Energy) to maintain a consolidated debt ratio of 70% or less of its total capitalization.

The variable interest entities had notes payable that are included in long-term debt on the respective balance sheets as of September 30, 2011 as follows:

Company	Description	Amount

Entergy Arkansas VIE	9% Series H due June 2013	$30 million
Entergy Arkansas VIE	5.69% Series I due July 2014	$70 million
Entergy Arkansas VIE	3.23% Series J due July 2016	$55 million
Entergy Gulf States Louisiana VIE	5.56% Series N due May 2013	$75 million
Entergy Gulf States Louisiana VIE	5.41% Series O due July 2012	$60 million
Entergy Louisiana VIE	5.69% Series E due July 2014	$50 million
Entergy Louisiana VIE	3.30% Series F due March 2016	$20 million
System Energy VIE	6.29% Series F due September 2013	$70 million
System Energy VIE	5.33% Series G due April 2015	$60 million

In accordance with regulatory treatment, interest on the nuclear fuel company variable interest entities’ credit facilities, commercial paper, and long-term notes payable is reported in fuel expense.

Debt Issuances and Redemptions

(Entergy Louisiana)

In March 2011, Entergy Louisiana issued $200 million of 4.80% Series first mortgage bonds due May 2021. Entergy Louisiana used the proceeds, together with other available funds, to purchase Unit 2 of the Acadia Energy Center, a 580MW generating unit located near Eunice, Louisiana.

In August 2011, the LPSC issued a financing order authorizing the issuance of bonds to recover Entergy Louisiana’s investment recovery costs associated with the cancelled Little Gypsy repowering project. In September 2011, Entergy Louisiana Investment Recovery Funding I, L.L.C., a company wholly-owned and consolidated by Entergy Louisiana, issued $207.2 million of senior secured investment recovery bonds. The bonds have an interest rate

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

of 2.04% and an expected maturity date of June 2021. Although the principal amount is not due until the date given above, Entergy Louisiana Investment Recovery Funding expects to make principal payments on the bonds over the next five years in the amounts of $25.6 million for 2012, $16.6 million for 2013, $21.9 million for 2014, $20.5 million for 2015, and $21.6 million for 2016. With the proceeds, Entergy Louisiana Investment Recovery Funding purchased from Entergy Louisiana the investment recovery property, which is the right to recover from customers through an investment recovery charge amounts sufficient to service the bonds. In accordance with the financing order, Entergy Louisiana will apply the proceeds it received from the sale of the investment recovery property as a reimbursement for previously-incurred investment recovery costs. The investment recovery property is reflected as a regulatory asset on the consolidated Entergy Louisiana balance sheet. The creditors of Entergy Louisiana do not have recourse to the assets or revenues of Entergy Louisiana Investment Recovery Funding, including the investment recovery property, and the creditors of Entergy Louisiana Investment Recovery Funding do not have recourse to the assets or revenues of Entergy Louisiana. Entergy Louisiana has no payment obligations to Entergy Louisiana Investment Recovery Funding except to remit investment recovery charge collections.

(Entergy Mississippi)

In April 2011, Entergy Mississippi issued $150 million of 6.0% Series first mortgage bonds due May 2051. Entergy Mississippi used a portion of the proceeds to pay at maturity its $80 million 4.65% Series first mortgage bonds due May 2011.

In May 2011, Entergy Mississippi issued $125 million of 3.25% Series first mortgage bonds due June 2016. Entergy Mississippi used a portion of the proceeds to pay prior to maturity its $100 million 5.92% Series first mortgage bonds due February 2016.

(Entergy Texas)

In September 2011, Entergy Texas issued $75 million of 4.10% Series first mortgage bonds due September 2021.

Fair Value

The book value and the fair value of long-term debt for Entergy Corporation and the Registrant Subsidiaries as of September 30, 2011 are as follows:

	Book Value of Long-Term Debt		Fair Value of Long-Term Debt (a) (b)
	(In Thousands)

Entergy	$	12,264,403	$	12,211,941
Entergy Arkansas	$	1,882,056	$	1,757,503
Entergy Gulf States Louisiana	$	1,603,011	$	1,707,838
Entergy Louisiana	$	2,198,460	$	2,195,653
Entergy Mississippi	$	920,424	$	975,856
Entergy New Orleans	$	166,599	$	168,550
Entergy Texas	$	1,686,582	$	1,908,427
System Energy	$	787,029	$	627,286

(a)	The values exclude lease obligations of $188 million at Entergy Louisiana and $179 million at System Energy, long-term DOE obligations of $181 million at Entergy Arkansas, and the note payable to NYPA of $148 million at Entergy, and include debt due within one year.
(b)	Fair values are based on prices derived by independent third parties that use inputs such as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

NOTE 5. STOCK-BASED COMPENSATION (Entergy Corporation)

Entergy grants stock awards, which are described more fully in Note 12 to the financial statements in the Form 10-K. Awards under Entergy’s plans generally vest over three years.

Stock Options

Entergy granted 388,200 stock options during the first quarter 2011 with a weighted-average fair value of $11.48. At September 30, 2011, there are 10,738,033 stock options outstanding with a weighted-average exercise price of $74.73. The intrinsic value, which has no effect on net income, of the outstanding stock options is calculated by the difference in the weighted average exercise price of the stock options granted and Entergy Corporation’s common stock price as of September 30, 2011. Because Entergy’s stock price at September 30, 2011 is less than the weighted average exercise price, the aggregate intrinsic value of the stock options outstanding as of September 30, 2011 is zero. The intrinsic value of “in the money” stock options is $46.8 million as of September 30, 2011.

The following table includes financial information for stock options for the third quarter and nine months ended September 30 for each of the years presented:

	2011		2010
	(In Millions)

Compensation expense included in Entergy’s net income for the third quarter	$	2.5	$	3.7
Tax benefit recognized in Entergy’s net income for the third quarter	$	0.9	$	1.4

Compensation expense included in Entergy’s net income for the nine months ended September 30,	$	8.0	$	11.3
Tax benefit recognized in Entergy’s net income for the nine months ended September 30,	$	3.1	$	4.4

Compensation cost capitalized as part of fixed assets and inventory as of September 30,	$	1.5	$	2.2

Restricted Stock Awards

In January 2011, the Board approved and Entergy granted 166,800 restricted stock awards under the 2007 Equity Ownership and Long-term Cash Incentive Plan. The grants were made effective as of January 27, 2011 and were valued at $72.79 per share, which was the closing price of Entergy’s common stock on that date. One-third of the restricted stock awards will vest upon each anniversary of the grant date and are expensed ratably over the three year vesting period. Shares of restricted stock have the same dividend and voting rights as other common stock and are considered issued and outstanding shares of Entergy upon vesting.

The following table includes financial information for restricted stock for the third quarter and nine months ended September 30 for each of the years presented:

	2011		2010
	(In Millions)

Compensation expense included in Entergy’s net income for the third quarter	$	1.0	$	-
Tax benefit recognized in Entergy’s net income for the third quarter	$	0.4	$	-

Compensation expense included in Entergy’s net income for the nine months ended September 30,	$	2.9	$	-
Tax benefit recognized in Entergy’s net income for the nine months ended September 30,	$	1.1	$	-

Compensation cost capitalized as part of fixed assets and inventory as of September 30,	$	0.5	$	-

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

NOTE 6. RETIREMENT AND OTHER POSTRETIREMENT BENEFITS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Components of Net Pension Cost

Entergy’s qualified pension cost, including amounts capitalized, for the third quarters of 2011 and 2010, included the following components:

	2011			2010
	(In Thousands)

Service cost - benefits earned during the period	$	30,490		$	26,239
Interest cost on projected benefit obligation		59,248			57,802
Expected return on assets		(75,319	)		(64,902	)
Amortization of prior service cost		838			1,164
Amortization of loss		23,244			16,475
Net pension costs	$	38,501		$	36,778

Entergy’s qualified pension cost, including amounts capitalized, for the nine months ended September 30, 2011 and 2010, included the following components:

	2011			2010
	(In Thousands)

Service cost - benefits earned during the period	$	91,470		$	78,717
Interest cost on projected benefit obligation		177,744			173,406
Expected return on assets		(225,957	)		(194,706	)
Amortization of prior service cost		2,514			3,492
Amortization of loss		69,732			49,425
Net pension costs	$	115,503		$	110,334

The Registrant Subsidiaries’ qualified pension cost, including amounts capitalized, for the third quarters of 2011 and 2010, included the following components:

2011	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	4,518		$	2,462		$	2,886		$	1,327		$	561		$	1,197		$	1,235
Interest cost on projected
benefit obligation		12,991			5,928			8,159			3,909			1,762			3,993			2,939
Expected return on assets		(15,609	)		(8,339	)		(9,716	)		(5,038	)		(2,114	)		(5,501	)		(3,784	)
Amortization of prior service
cost		115			20			70			38			9			16			4
Amortization of loss		6,421			2,279			4,497			1,680			1,166			1,394			1,321
Net pension cost	$	8,436		$	2,350		$	5,896		$	1,916		$	1,384		$	1,099		$	1,715

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

2010	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	3,944		$	2,116		$	2,443		$	1,163		$	516		$	1,067		$	1,033
Interest cost on projected
benefit obligation		12,319			6,094			7,135			3,807			1,510			3,967			2,252
Expected return on assets		(12,659	)		(7,688	)		(8,194	)		(4,313	)		(1,809	)		(5,137	)		(2,952	)
Amortization of prior service
cost		196			75			119			79			44			59			8
Amortization of loss		4,126			1,906			2,151			1,091			636			802			132
Net pension cost	$	7,926		$	2,503		$	3,654		$	1,827		$	897		$	758		$	473

The Registrant Subsidiaries’ qualified pension cost, including amounts capitalized, for the nine months ended September 30, 2011 and 2010, included the following components:

2011	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	13,554		$	7,386		$	8,658		$	3,981		$	1,683		$	3,591		$	3,705
Interest cost on projected
benefit obligation		38,973			17,784			24,477			11,727			5,286			11,979			8,817
Expected return on assets		(46,827	)		(25,017	)		(29,148	)		(15,114	)		(6,342	)		(16,503	)		(11,352	)
Amortization of prior service
cost		345			60			210			114			27			48			12
Amortization of loss		19,263			6,837			13,491			5,040			3,498			4,182			3,963
Net pension cost	$	25,308		$	7,050		$	17,688		$	5,748		$	4,152		$	3,297		$	5,145

2010	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	11,832		$	6,348		$	7,329		$	3,489		$	1,548		$	3,201		$	3,099
Interest cost on projected
benefit obligation		36,957			18,282			21,405			11,421			4,530			11,901			6,756
Expected return on assets		(37,977	)		(23,064	)		(24,582	)		(12,939	)		(5,427	)		(15,411	)		(8,856	)
Amortization of prior service
cost		588			225			357			237			132			177			24
Amortization of loss		12,378			5,718			6,453			3,273			1,908			2,406			396
Net pension cost	$	23,778		$	7,509		$	10,962		$	5,481		$	2,691		$	2,274		$	1,419

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy recognized $4.9 million and $4.7 million in pension cost for its non-qualified pension plans in the third quarters of 2011 and 2010, respectively.In the third quarter 2010, Entergy recognized a $0.4 million settlement charge related to the payment of lump sum benefits out of the plan that is included in the non-qualified pension cost above. Entergy recognized $14.6 million and $20.9 million in pension cost for its non-qualified pension plans for the nine months ended September 30, 2011 and 2010, respectively, including the $7.3 million settlement charge recognized in the second and third quarters 2010.

The Registrant Subsidiaries recognized the following pension cost for their non-qualified pension plans in the third quarters of 2011 and 2010:

	Entergy Arkansas	Entergy Gulf States Louisiana	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Non-qualified pension cost third quarter 2011	$115	$42	$4	$48	$16	$192
Non-qualified pension cost third quarter 2010	$105	$41	$6	$52	$6	$169

The Registrant Subsidiaries recognized the following pension cost for their non-qualified pension plans for the nine months ended September 30, 2011 and 2010:

	Entergy Arkansas	Entergy Gulf States Louisiana	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Non-qualified pension cost nine months ended September 30, 2011	$345	$126	$12	$144	$48	$576
Non-qualified pension cost nine months ended September 30, 2010	$395	$122	$17	$153	$19	$515
Settlement charge recognized in the nine months ended September 30, 2010 included in cost above	$86	$ -	$ -	$ -	$ -	$5

Components of Net Other Postretirement Benefit Cost

Entergy’s other postretirement benefit cost, including amounts capitalized, for the third quarters of 2011 and 2010, included the following components:

	2011			2010
	(In Thousands)

Service cost - benefits earned during the period	$	14,835		$	13,078
Interest cost on accumulated postretirement benefit obligation (APBO)		18,631			19,020
Expected return on assets		(7,369	)		(6,553	)
Amortization of transition obligation		796			932
Amortization of prior service cost		(3,518	)		(3,015	)
Amortization of loss		5,298			4,317
Net other postretirement benefit cost	$	28,673		$	27,779

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy’s other postretirement benefit cost, including amounts capitalized, for the nine months ended September 30, 2011 and 2010, included the following components:

	2011			2010
	(In Thousands)

Service cost - benefits earned during the period	$	44,505		$	39,234
Interest cost on APBO		55,893			57,060
Expected return on assets		(22,107	)		(19,659	)
Amortization of transition obligation		2,388			2,796
Amortization of prior service cost		(10,554	)		(9,045	)
Amortization of loss		15,894			12,951
Net other postretirement benefit cost	$	86,019		$	83,337

The Registrant Subsidiaries’ other postretirement benefit cost, including amounts capitalized, for the third quarters of 2011 and 2010, included the following components:

2011	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	2,013		$	1,540		$	1,635		$	658		$	362		$	769		$	661
Interest cost on APBO		3,436			2,075			2,192			1,093			806			1,486			667
Expected return on assets		(2,882	)		-			-			(977	)		(800	)		(1,874	)		(529	)
Amortization of transition
obligation		205			60			96			88			298			47			2
Amortization of prior service
cost		(133	)		(206	)		(62	)		(35	)		10			(107	)		(147	)
Amortization of loss		1,610			723			698			540			241			700			369
Net other postretirement
benefit cost	$	4,249		$	4,192		$	4,559		$	1,367		$	917		$	1,021		$	1,023

2010	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana		Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	1,843		$	1,370		$	1,371	$	550		$	347		$	697		$	563
Interest cost on APBO		3,629			2,144			2,269		1,093			900			1,582			641
Expected return on assets		(2,445	)		-			-		(888	)		(725	)		(1,718	)		(468	)
Amortization of transition
obligation		205			60			96		88			415			66			2
Amortization of prior service
cost		(197	)		(77	)		117		(62	)		90			19			(191	)
Amortization of loss		1,690			663			609		476			274			752			325
Net other postretirement
benefit cost	$	4,725		$	4,160		$	4,462	$	1,257		$	1,301		$	1,398		$	872

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The Registrant Subsidiaries’ other postretirement benefit cost, including amounts capitalized, for the nine months ended September 30, 2011 and 2010, included the following components:

2011	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana			Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	6,039		$	4,620		$	4,905		$	1,974		$	1,086		$	2,307		$	1,983
Interest cost on APBO		10,308			6,225			6,576			3,279			2,418			4,458			2,001
Expected return on assets		(8,646	)		-			-			(2,931	)		(2,400	)		(5,622	)		(1,587	)
Amortization of transition
obligation		615			180			288			264			894			141			6
Amortization of prior service
cost		(399	)		(618	)		(186	)		(105	)		30			(321	)		(441	)
Amortization of loss		4,830			2,169			2,094			1,620			723			2,100			1,107
Net other postretirement
benefit cost	$	12,747		$	12,576		$	13,677		$	4,101		$	2,751		$	3,063		$	3,069

2010	Entergy Arkansas			Entergy Gulf States Louisiana			Entergy Louisiana		Entergy Mississippi			Entergy New Orleans			Entergy Texas			System Energy
	(In Thousands)
Service cost - benefits earned
during the period	$	5,529		$	4,110		$	4,113	$	1,650		$	1,041		$	2,091		$	1,689
Interest cost on APBO		10,887			6,432			6,807		3,279			2,700			4,746			1,923
Expected return on assets		(7,335	)		-			-		(2,664	)		(2,175	)		(5,154	)		(1,404	)
Amortization of transition
obligation		615			180			288		264			1,245			198			6
Amortization of prior service
cost		(591	)		(231	)		351		(186	)		270			57			(573	)
Amortization of loss		5,070			1,989			1,827		1,428			822			2,256			975
Net other postretirement
benefit cost	$	14,175		$	12,480		$	13,386	$	3,771		$	3,903		$	4,194		$	2,616

Employer Contributions

Based on current assumptions, Entergy expects to contribute $400.5 million to its qualified pension plans in 2011. As of the end of September 2011, Entergy had contributed $337.9 million to its pension plans. Therefore, Entergy presently anticipates contributing an additional $62.6 million to fund its qualified pension plans in 2011.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Based on current assumptions, the Registrant Subsidiaries expect to contribute the following to qualified pension plans in 2011:

	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Thousands)
Expected 2011 pension contributions	$	120,400	$	27,318	$	60,597	$	29,169	$	12,160	$	18,235	$	28,351
Pension contributions made through September 2011	$	104,218	$	22,619	$	51,411	$	25,173	$	10,291	$	14,946	$	24,452
Remaining estimated pension contributions to be made in 2011	$	16,182	$	4,699	$	9,186	$	3,996	$	1,869	$	3,289	$	3,899

NOTE 7. BUSINESS SEGMENT INFORMATION (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy Corporation

Entergy’s reportable segments as of September 30, 2011 are Utility and Entergy Wholesale Commodities. Utility includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and natural gas utility service in portions of Louisiana. Entergy Wholesale Commodities includes the ownership and operation of six nuclear power plants located in the northern United States and the sale of the electric power produced by those plants to wholesale customers. Entergy Wholesale Commodities also includes the ownership of interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers. “All Other” includes the parent company, Entergy Corporation, and other business activity, including the earnings on the proceeds of sales of previously-owned businesses.

In the fourth quarter 2010, Entergy finished integrating its former Non-Utility Nuclear segment and its non-nuclear wholesale asset business into the new Entergy Wholesale Commodities business in an internal reorganization. The 2010 information in the tables below has been restated to reflect the change in reportable segments.

Entergy’s segment financial information for the third quarters of 2011 and 2010 is as follows:

	Utility			Entergy Wholesale Commodities*		All Other			Eliminations			Entergy
	(In Thousands)
2011
Operating revenues	$	2,760,631		$	641,216	$	1,015		$	(7,309	)	$	3,395,553
Income taxes (benefit)	$	(158,673	)	$	64,079	$	(24,537	)	$	-		$	(119,131	)
Consolidated net income	$	528,459		$	130,862	$	1,393		$	(27,645	)	$	633,069

2010
Operating revenues	$	2,666,727		$	671,927	$	971		$	(7,449	)	$	3,332,176
Income taxes (benefit)	$	216,590		$	30,728	$	(62,682	)	$	-		$	184,636
Consolidated net income	$	337,941		$	143,721	$	45,432		$	(29,193	)	$	497,901

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy’s segment financial information for the nine months ended September 30, 2011 and 2010 is as follows:

	Utility		Entergy Wholesale Commodities*		All Other			Eliminations			Entergy
	(In Thousands)
2011
Operating revenues	$	6,939,724	$	1,819,439	$	3,153		$	(22,275	)	$	8,740,041
Income taxes (benefit)	$	70,567	$	213,344	$	(87,839	)	$	-		$	196,072
Consolidated net income	$	949,854	$	319,651	$	20,776		$	(82,935	)	$	1,207,346

2010
Operating revenues	$	7,016,664	$	1,954,393	$	4,997		$	(21,581	)	$	8,954,473
Income taxes (benefit)	$	447,607	$	185,616	$	(96,996	)	$	-		$	536,227
Consolidated net income	$	711,085	$	338,820	$	53,005		$	(65,911	)	$	1,036,999

Businesses marked with * are sometimes referred to as the “competitive businesses.” Eliminations are primarily intersegment activity.

Registrant Subsidiaries

Each of the Registrant Subsidiaries has one reportable segment, which is an integrated utility business, except for System Energy, which is an electricity generation business. Each of the Registrant Subsidiaries’ operations is managed on an integrated basis by that company because of the substantial effect of cost-based rates and regulatory oversight on the business process, cost structures, and operating results.

NOTE 8. RISK MANAGEMENT AND FAIR VALUES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Market and Commodity Risks

In the normal course of business, Entergy is exposed to a number of market and commodity risks. Market risk is the potential loss that Entergy may incur as a result of changes in the market or fair value of a particular instrument or commodity. All financial and commodity-related instruments, including derivatives, are subject to market risk. Entergy is subject to a number of commodity and market risks, including:

Type of Risk		Affected Businesses

Power price risk		Utility, Entergy Wholesale Commodities
Fuel price risk		Utility, Entergy Wholesale Commodities
Foreign currency exchange rate risk		Entergy Wholesale Commodities
Equity price and interest rate risk - investments		Utility, Entergy Wholesale Commodities

Entergy manages a portion of these risks using derivative instruments, some of which are classified as cash flow hedges due to their financial settlement provisions while others are classified as normal purchase/normal sales transactions due to their physical settlement provisions. Normal purchase/normal sale risk management tools include power purchase and sales agreements, fuel purchase agreements, capacity contracts, and tolling agreements. Financially-settled cash flow hedges can include natural gas and electricity futures, forwards, swaps, and options; foreign currency forwards; and interest rate swaps. Entergy has entered into financially settled option contracts to manage market risk under certain hedging transactions, which may or may not be designated as hedging instruments. Entergy enters into derivatives only to manage natural risks inherent in its physical or financial assets or liabilities.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy manages fuel price volatility for its Louisiana jurisdictions (Entergy Gulf States Louisiana, Entergy Louisiana, and Entergy New Orleans) and Entergy Mississippi primarily through the purchase of short-term natural gas swaps. These swaps are marked-to-market with offsetting regulatory assets or liabilities. The notional volumes of these swaps are based on a portion of projected annual exposure to gas for electric generation and projected winter purchases for gas distribution at Entergy Gulf States Louisiana and Entergy New Orleans.

Entergy’s exposure to market risk is determined by a number of factors, including the size, term, composition, and diversification of positions held, as well as market volatility and liquidity. For instruments such as options, the time period during which the option may be exercised and the relationship between the current market price of the underlying instrument and the option’s contractual strike or exercise price also affects the level of market risk. A significant factor influencing the overall level of market risk to which Entergy is exposed is its use of hedging techniques to mitigate such risk. Entergy manages market risk by actively monitoring compliance with stated risk management policies as well as monitoring the effectiveness of its hedging policies and strategies. Entergy’s risk management policies limit the amount of total net exposure and rolling net exposure during the stated periods. These policies, including related risk limits, are regularly assessed to ensure their appropriateness given Entergy’s objectives.

Derivatives

The fair values of Entergy’s derivative instruments in the consolidated balance sheet as of September 30, 2011 are as follows:

Instrument	Balance Sheet Location	Fair Value (a)	Offset (a)	Business

Derivatives designated as hedging instruments

Assets:
Electricity forwards, swaps and options	Prepayments and other (current portion)	$93 million	($11) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other deferred debits and other assets (non-current portion)	$23 million	($23) million	Entergy Wholesale Commodities

Liabilities:
Electricity forwards, swaps and options	Other current liabilities (current portion)	$11 million	($11) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other non-current liabilities (non-current portion)	$49 million	($25) million	Entergy Wholesale Commodities

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Instrument	Balance Sheet Location	Fair Value (a)	Offset (a)	Business

Derivatives not designated as hedging instruments

Assets:
Electricity forwards, swaps and options	Prepayments and other (current portion)	$21 million	($8) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other deferred debits and other assets (non-current portion)	$3 million	($3) million	Entergy Wholesale Commodities

Liabilities:
Electricity forwards, swaps and options	Other current liabilities (current portion)	$8 million	($8) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other non-current liabilities (non-current portion)	$2 million	($1) million	Entergy Wholesale Commodities
Natural gas swaps	Other current liabilities	$16 million	$-	Utility

The fair values of Entergy’s derivative instruments in the consolidated balance sheet as of December 31, 2010 are as follows:

Instrument	Balance Sheet Location	Fair Value (a)	Offset (a)	Business

Derivatives designated as hedging instruments

Assets:
Electricity forwards, swaps and options	Prepayments and other (current portion)	$160 million	($7) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other deferred debits and other assets (non-current portion)	$82 million	($29) million	Entergy Wholesale Commodities

Liabilities:
Electricity forwards, swaps and options	Other current liabilities (current portion)	$5 million	($5) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other non-current liabilities (non-current portion)	$47 million	($30) million	Entergy Wholesale Commodities

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Instrument	Balance Sheet Location	Fair Value (a)	Offset (a)	Business
Derivatives not designated as hedging instruments

Assets:
Electricity forwards, swaps and options	Prepayments and other (current portion)	$2 million	$-	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other deferred debits and other assets (non-current portion)	$14 million	($8) million	Entergy Wholesale Commodities

Liabilities:
Electricity forwards, swaps and options	Other current liabilities (current portion)	$2 million	($2) million	Entergy Wholesale Commodities
Electricity forwards, swaps and options	Other non-current liabilities (non-current portion)	$7 million	($7) million	Entergy Wholesale Commodities
Natural gas swaps	Other current liabilities	$2 million	$-	Utility

(a)

The balances of derivative assets and liabilities in these tables are presented gross. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presented on the Entergy Consolidated Balance Sheets on a net basis in accordance with accounting guidance for Derivatives and Hedging.

The effect of Entergy’s derivative instruments designated as cash flow hedges on the consolidated income statements for the three months ended September 30, 2011 and 2010 are as follows:

Instrument	Amount of gain recognized in OCI (effective portion)	Income Statement location	Amount of gain reclassified from accumulated OCI into income (effective portion)

2011
Electricity forwards, swaps and options	$40 million	Competitive businesses operating revenues	$48 million

2010
Electricity forwards, swaps and options	$118 million	Competitive businesses operating revenues	$43 million

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The effect of Entergy’s derivative instruments designated as cash flow hedges on the consolidated income statements for the nine months ended September 30, 2011 and 2010 are as follows:

Instrument	Amount of gain (loss) recognized in OCI (effective portion)	Income Statement location	Amount of gain reclassified from accumulated OCI into income (effective portion)

2011
Electricity forwards, swaps and options	($14) million	Competitive businesses operating revenues	$109 million

2010
Electricity forwards, swaps and options	$315 million	Competitive businesses operating revenues	$146 million

Electricity over-the-counter instruments that financially settle against day-ahead power pool prices are used to manage price exposure for Entergy Wholesale Commodities generation. Based on market prices as of September 30, 2011, cash flow hedges relating to power sales totaled $63 million of net unrealized gains. Approximately $81 million is expected to be reclassified from accumulated other comprehensive income (OCI) to operating revenues in the next twelve months. The actual amount reclassified from accumulated OCI could vary, however, due to future changes in market prices. Gains totaling approximately $48 million and $43 million were realized on the maturity of cash flow hedges, before taxes of $17 million and $15 million, for the three months ended September 30, 2011 and 2010, respectively. Gains totaling approximately $109 million and $146 million were realized on the maturity of cash flow hedges, before taxes of $38 million and $51 million, for the nine months ended September 30, 2011 and 2010, respectively. Unrealized gains or losses recorded in OCI result from hedging power output at the Entergy Wholesale Commodities power plants. The related gains or losses from hedging power are included in operating revenues when realized. The maximum length of time over which Entergy is currently hedging the variability in future cash flows with derivatives for forecasted power transactions at September 30, 2011 is approximately 3.25 years. Planned generation currently sold forward from Entergy Wholesale Commodities power plants is 94% for the remaining quarter of 2011, of which approximately 46% is sold under financial derivatives and the remainder under normal purchase/sale contracts. The change in the value of Entergy’s cash flow hedges due to ineffectiveness was $6.2 million and $8.4 million for the three and nine months ended September 30, 2011, respectively. The change in the value of Entergy’s cash flow hedges due to ineffectiveness was insignificant for the three and nine months ended September 30, 2010. The ineffective portion of cash flow hedges is recorded in competitive business operating revenues. Certain of the agreements to sell the power produced by Entergy Wholesale Commodities power plants contain provisions that require an Entergy subsidiary to provide collateral to secure its obligations when the current market prices exceed the contracted power prices. The primary form of collateral to satisfy these requirements is an Entergy Corporation guaranty. As of September 30, 2011, hedge contracts with three counterparties were in a liability position (approximately $3 million total), but were significantly below the amount of the guarantee provided under the contract and no cash collateral was required. If the Entergy Corporation credit rating falls below investment grade, the effect of the corporate guarantee is ignored and Entergy would have to post collateral equal to the estimated outstanding liability under the contract at the applicable date. Entergy may effectively liquidate a cash flow hedge instrument by entering into a contract offsetting the original hedge, and then de-designating the original hedge in this situation. Gains or losses accumulated in OCI prior to de-designation continue to be deferred in OCI until they are included in income as the original hedged transaction occurs. From the point of de-designation, the gains or losses on the original hedge and the offsetting contract are recorded as assets or liabilities on the balance sheet and offset as they flow through to earnings.

Natural gas over-the-counter swaps that financially settle against NYMEX futures are used to manage fuel price volatility for the Utility’s Louisiana and Mississippi customers. All benefits or costs of the program are recorded in fuel costs. The total volume of natural gas swaps outstanding as of September 30, 2011 is 27,100,000 MMBtu for Entergy, 7,660,000 MMBtu for Entergy Gulf States Louisiana, 10,960,000 MMBtu for Entergy Louisiana, and

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

6,250,000 MMBtu for Entergy Mississippi, and 2,230,000 MMBtu for Entergy New Orleans. Credit support for these natural gas swaps is covered by master agreements that do not require collateralization based on mark-to-market value, but do carry adequate assurance language that may lead to collateralization requests.

The effect of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for the three months ended September 30, 2011 and 2010 is as follows:

Instrument	Amount of gain (loss) recognized in OCI	Income Statement location	Amount of gain (loss) recorded in income

2011
Natural gas swaps	$-	Fuel, fuel-related expenses, and gas purchased for resale	($19) million
Electricity forwards, swaps and options de-designated as hedged items	($2) million	Competitive business operating revenues	$2 million

2010
Natural gas swaps	$-	Fuel, fuel-related expenses, and gas purchased for resale	($28) million
Electricity forwards, swaps and options de-designated as hedged items	$12 million	Competitive business operating revenues	$-

The effect of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for the nine months ended September 30, 2011 and 2010 is as follows:

Instrument	Amount of gain recognized in OCI	Income Statement location	Amount of gain (loss) recorded in income

2011
Natural gas swaps	$-	Fuel, fuel-related expenses, and gas purchased for resale	($31) million
Electricity forwards, swaps and options de-designated as hedged items	$4 million	Competitive business operating revenues	$8 million

2010
Natural gas swaps	$-	Fuel, fuel-related expenses, and gas purchased for resale	($91) million
Electricity forwards, swaps and options de-designated as hedged items	$15 million	Competitive business operating revenues	$-

Due to regulatory treatment, the natural gas swaps are marked to market through fuel, fuel-related expenses, and gas purchased for resale and then such amounts are simultaneously reversed and recorded as offsetting regulatory assets or liabilities. The gains or losses recorded as fuel expenses when the swaps are settled are recovered through fuel cost recovery mechanisms.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair values of the Registrant Subsidiaries’ derivative instruments on their balance sheets as of September 30, 2011 are as follows:

Instrument	Balance Sheet Location	Fair Value	Registrant

Derivatives not designated as hedging instruments

Liabilities:
Natural gas swaps	Other current liabilities	$4.4 million	Entergy Gulf States Louisiana
Natural gas swaps	Other current liabilities	$6.4 million	Entergy Louisiana
Natural gas swaps	Other current liabilities	$3.6 million	Entergy Mississippi
Natural gas swaps	Other current liabilities	$1.3 million	Entergy New Orleans

The fair values of the Registrant Subsidiaries’ derivative instruments on their balance sheets as of December 31, 2010 are as follows:

Instrument	Balance Sheet Location	Fair Value	Registrant

Derivatives not designated as hedging instruments

Assets:
Natural gas swaps	Prepayments and other	$0.3 million	Entergy Mississippi

Liabilities:
Natural gas swaps	Other current liabilities	$1.0 million	Entergy Gulf States Louisiana
Natural gas swaps	Other current liabilities	$0.4 million	Entergy Louisiana
Natural gas swaps	Other current liabilities	$0.5 million	Entergy New Orleans

The effects of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their statements of income for the three months ended September 30, 2011 and 2010 are as follows:

Instrument	Statement of Income Location	Amount of loss recorded in income	Registrant

2011
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($5.0) million	Entergy Gulf States Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($7.5) million	Entergy Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($4.4) million	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($1.1) million	Entergy New Orleans

2010
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($8.2) million	Entergy Gulf States Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($11.7) million	Entergy Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($6.4) million	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($2.1) million	Entergy New Orleans

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The effects of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their statements of income for the nine months ended September 30, 2011 and 2010 are as follows:

Instrument	Statement of Income Location	Amount of loss recorded in income	Registrant

2011
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($9.2) million	Entergy Gulf States Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($12.5) million	Entergy Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($6.9) million	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($2.0) million	Entergy New Orleans

2010
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($24.5) million	Entergy Gulf States Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($38.7) million	Entergy Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($26.0) million	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($2.1) million	Entergy New Orleans

Fair Values

The estimated fair values of Entergy’s financial instruments and derivatives are determined using bid prices, market quotes, and financial modeling. Considerable judgment is required in developing the estimates of fair value. Therefore, estimates are not necessarily indicative of the amounts that Entergy could realize in a current market exchange. Gains or losses realized on financial instruments other than forward energy contracts held by competitive businesses are reflected in future rates and therefore do not accrue to the benefit or detriment of shareholders. Entergy considers the carrying amounts of most financial instruments classified as current assets and liabilities to be a reasonable estimate of their fair value because of the short maturity of these instruments.

Accounting standards define fair value as an exit price, or the price that would be received to sell an asset or the amount that would be paid to transfer a liability in an orderly transaction between knowledgeable market participants at the date of measurement. Entergy and the Registrant Subsidiaries use assumptions or market input data that market participants would use in pricing assets or liabilities at fair value. The inputs can be readily observable, corroborated by market data, or generally unobservable. Entergy and the Registrant Subsidiaries endeavor to use the best available information to determine fair value.

Accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy establishes the highest priority for unadjusted market quotes in an active market for the identical asset or liability and the lowest priority for unobservable inputs. The three levels of the fair value hierarchy are:

Level 1 - Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of individually owned common stocks, cash equivalents, debt instruments, and gas hedge contracts.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Level 2 - Level 2 inputs are inputs other than quoted prices included in Level 1 that are, either directly or indirectly, observable for the asset or liability at the measurement date. Assets are valued based on prices derived by independent third parties that use inputs such as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. Prices are reviewed and can be challenged with the independent parties and/or overridden by Entergy if it is believed such would be more reflective of fair value. Level 2 inputs include the following:

-	quoted prices for similar assets or liabilities in active markets;

-	quoted prices for identical assets or liabilities in inactive markets;

-	inputs other than quoted prices that are observable for the asset or liability; or

-	inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 2 consists primarily of individually owned debt instruments or shares in common trusts. Common trust funds are stated at estimated fair value based on the fair market value of the underlying investments.

Level 3 - Level 3 inputs are pricing inputs that are generally less observable or unobservable from objective sources. These inputs are used with internally developed methodologies to produce management’s best estimate of fair value for the asset or liability. Level 3 consists primarily of derivative power contracts used as cash flow hedges of power sales at merchant power plants.

The values for the cash flow hedges that are recorded as derivative contract assets or liabilities are based on both observable inputs including public market prices and unobservable inputs such as model-generated prices for longer-term markets and are classified as Level 3 assets and liabilities. The amounts reflected as the fair value of derivative assets or liabilities are based on the estimated amount that the contracts are in-the-money at the balance sheet date (treated as an asset) or out-of-the-money at the balance sheet date (treated as a liability) and would equal the estimated amount receivable or payable by Entergy if the contracts were settled at that date. These derivative contracts include cash flow hedges that swap fixed for floating cash flows for sales of the output from Entergy’s Entergy Wholesale Commodities business. The fair values are based on the mark-to-market comparison between the fixed contract prices and the floating prices determined each period from a combination of quoted forward power market prices for the period for which such curves are available, and model-generated prices using quoted forward gas market curves and estimates regarding heat rates to convert gas to power and the costs associated with the transportation of the power from the plants’ bus bar to the contract’s point of delivery, generally a power market hub, for the period thereafter. The differences between the fixed price in the swap contract and these market-related prices multiplied by the volume specified in the contract and discounted at the counterparties’ credit adjusted risk free rate are recorded as derivative contract assets or liabilities. As of September 30, 2011, Entergy had in-the-money derivative contracts with a fair value of $73 million with counterparties or their guarantor who are all currently investment grade. $3 million of the derivative contracts as of September 30, 2011 are out-of-the-money contracts supported by corporate guarantees, which would require additional cash or letters of credit in the event of a decrease in Entergy Corporation’s credit rating to below investment grade.

The following table sets forth, by level within the fair value hierarchy, Entergy’s assets and liabilities that are accounted for at fair value on a recurring basis as of September 30, 2011 and December 31, 2010. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect their placement within the fair value hierarchy levels.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	851	$	-	$	-	$	851
Decommissioning trust funds (a):
Equity securities		371		1,559		-		1,930
Debt securities		656		980		-		1,636
Power contracts		-		-		95		95
Securitization recovery trust account		43		-		-		43
Storm reserve escrow account		334		-		-		334
	$	2,255	$	2,539	$	95	$	4,889

Liabilities:
Gas hedge contracts	$	16	$	-	$	-	$	16
Power contracts		-		-		25		25
	$	16	$	-	$	25	$	41

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	1,218	$	-	$	-	$	1,218
Decommissioning trust funds (a):
Equity securities		387		1,689		-		2,076
Debt securities		497		1,023		-		1,520
Power contracts		-		-		214		214
Securitization recovery trust account		43		-		-		43
Storm reserve escrow account		329		-		-		329
	$	2,474	$	2,712	$	214	$	5,400

Liabilities:
Power contracts	$	-	$	-	$	17	$	17
Gas hedge contracts		2		-		-		2
	$	2	$	-	$	17	$	19

The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended September 30, 2011 and 2010:

	2011			2010
	(In Millions)

Balance as of beginning of period	$	98		$	297

Unrealized gains from price changes		3			124
Unrealized gains on originations		17			6
Realized losses on settlements		(48	)		(43	)

Balance as of September 30,	$	70		$	384

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

	2011			2010
	(In Millions)

Balance as of January 1,	$	197		$	200

Unrealized gains/(losses) from price changes		(33	)		316
Unrealized gains on originations		15			14
Realized losses on settlements		(109	)		(146	)

Balance as of September 30,	$	70		$	384

The following table sets forth, by level within the fair value hierarchy, the Registrant Subsidiaries’ assets that are accounted for at fair value on a recurring basis as of September 30, 2011 and December 31, 2010. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.

Entergy Arkansas

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Decommissioning trust funds (a):
Equity securities	$	9.8	$	288.3	$	-	$	298.1
Debt securities		77.2		129.5		-		206.7
Securitization recovery trust account		7.9		-		-		7.9
	$	94.9	$	417.8	$	-	$	512.7

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	101.9	$	-	$	-	$	101.9
Decommissioning trust funds (a):
Equity securities		3.4		316.3		-		319.7
Debt securities		41.4		159.7		-		201.1
Securitization recovery trust account		2.4		-		-		2.4
	$	149.1	$	476.0	$	-	$	625.1

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Gulf States Louisiana

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	25.6	$	-	$	-	$	25.6
Decommissioning trust funds (a):
Equity securities		6.1		207.5		-		213.6
Debt securities		41.1		136.7		-		177.8
Storm reserve escrow account		90.2		-		-		90.2
	$	163.0	$	344.2	$	-	$	507.2

Liabilities:
Gas hedge contracts	$	4.4	$	-	$	-	$	4.4

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	154.9	$	-	$	-	$	154.9
Decommissioning trust funds (a):
Equity securities		3.8		231.1		-		234.9
Debt securities		32.2		126.5		-		158.7
Storm reserve escrow account		90.1		-		-		90.1
	$	281.0	$	357.6	$	-	$	638.6

Liabilities:
Gas hedge contracts	$	1.0	$	-	$	-	$	1.0

Entergy Louisiana

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	51.4	$	-	$	-	$	51.4
Decommissioning trust funds (a):
Equity securities		3.2		129.0		-		132.2
Debt securities		47.5		55.9		-		103.4
Storm reserve escrow account		201.2		-		-		201.2
	$	303.3	$	184.9	$	-	$	488.2

Liabilities:
Gas hedge contracts	$	6.4	$	-	$	-	$	6.4

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	122.5	$	-	$	-	$	122.5
Decommissioning trust funds (a):
Equity securities		1.3		142.6		-		143.9
Debt securities		45.7		50.9		-		96.6
Storm reserve escrow account		201.0		-		-		201.0
	$	370.5	$	193.5	$	-	$	564.0

Liabilities:
Gas hedge contracts	$	0.4	$	-	$	-	$	0.4

Entergy Mississippi

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Storm reserve escrow account	$	31.8	$	-	$	-	$	31.8

Liabilities:
Gas hedge contracts	$	3.6	$	-	$	-	$	3.6

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Gas hedge contracts	$	0.3	$	-	$	-	$	0.3
Storm reserve escrow account		31.9		-		-		31.9
	$	32.2	$	-	$	-	$	32.2

Entergy New Orleans

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	41.9	$	-	$	-	$	41.9
Storm reserve escrow account		10.7		-		-		10.7
	$	52.6	$	-	$	-	$	52.6

Liabilities:
Gas hedge contracts	$	1.3	$	-	$	-	$	1.3

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	53.6	$	-	$	-	$	53.6
Storm reserve escrow account		6.0		-		-		6.0
	$	59.6	$	-	$	-	$	59.6

Liabilities:
Gas hedge contracts	$	0.5	$	-	$	-	$	0.5

Entergy Texas

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	39.8	$	-	$	-	$	39.8
Securitization recovery trust account		35.5		-		-		35.5
	$	75.3	$	-	$	-	$	75.3

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	33.6	$	-	$	-	$	33.6
Securitization recovery trust account		40.6		-		-		40.6
	$	74.2	$	-	$	-	$	74.2

System Energy

2011	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	162.3	$	-	$	-	$	162.3
Decommissioning trust funds (a):
Equity securities		0.3		206.8		-		207.1
Debt securities		126.9		59.2		-		186.1
	$	289.5	$	266.0	$	-	$	555.5

2010	Level 1		Level 2		Level 3		Total
	(In Millions)
Assets:
Temporary cash investments	$	262.9	$	-	$	-	$	262.9
Decommissioning trust funds (a):
Equity securities		3.1		220.9		-		224.0
Debt securities		95.7		68.2		-		163.9
	$	361.7	$	289.1	$	-	$	650.8

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

(a)

The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to approximate the returns of major market indexes. Fixed income securities are held in various governmental and corporate securities with an average coupon rate of 4.15%. See Note 9 for additional information on the investment portfolios.

NOTE 9. DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, and System Energy)

Entergy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts. The NRC requires Entergy subsidiaries to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point 1 and 2, Vermont Yankee, and Palisades (NYPA currently retains the decommissioning trusts and liabilities for Indian Point 3 and FitzPatrick). The funds are invested primarily in equity securities; fixed-rate, fixed-income securities; and cash and cash equivalents.

Entergy records decommissioning trust funds on the balance sheet at their fair value. Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatory liabilities/assets. For the nonregulated portion of River Bend, Entergy Gulf States Louisiana has recorded an offsetting amount of unrealized gains/(losses) in other deferred credits. Decommissioning trust funds for Pilgrim, Indian Point 1 and 2, Vermont Yankee, and Palisades do not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains recorded on the assets in these trust funds are recognized in the accumulated other comprehensive income component of common shareholders’ equity because these assets are classified as available for sale. Unrealized losses (where cost exceeds fair market value) on the assets in these trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings. Generally, Entergy records realized gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The securities held as of September 30, 2011 and December 31, 2010 are summarized as follows:

	Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
2011
Equity Securities	$	1,930	$	277	$	40
Debt Securities		1,636		115		5
Total	$	3,566	$	392	$	45


2010
Equity Securities	$	2,076	$	436	$	9
Debt Securities		1,520		67		12
Total	$	3,596	$	503	$	21

Deferred taxes on unrealized gains/(losses) are recorded in other comprehensive income for the decommissioning trusts which do not meet the criteria for regulatory accounting treatment as described above. Unrealized gains/(losses) above are reported before deferred taxes of $106 million and $130 million as of September 30, 2011 and December 31, 2010, respectively. The amortized cost of debt securities was $1,504 million as of September 30, 2011 and $1,475 million as of December 31, 2010. As of September 30, 2011, the debt securities have an average coupon rate of approximately 4.15%, an average duration of approximately 5.46 years, and an average maturity of approximately 8.65

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

years. The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index. A relatively small percentage of the securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of September 30, 2011:

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$393	$30	$166	$3
More than 12 months	39	10	54	2
Total	$432	$40	$220	$5

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$15	$1	$474	$11
More than 12 months	105	8	4	1
Total	$120	$9	$478	$12

The unrealized losses in excess of twelve months on equity securities above relate to Entergy’s Utility operating companies and System Energy.

The fair value of debt securities, summarized by contractual maturities, as of September 30, 2011 and December 31, 2010 are as follows:

	2011		2010
	(In Millions)
Less than 1 year	$	49	$	37
1 year - 5 years		553		557
5 years - 10 years		603		512
10 years - 15 years		183		163
15 years - 20 years		47		47
20 years+		201		204
Total	$	1,636	$	1,520

During the three months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $417 million and $487 million, respectively. During the three months ended September 30, 2011 and 2010, gross gains of $12 million and $10 million, respectively, and gross losses of $3 million and $2 million, respectively, were reclassified out of other comprehensive income into earnings.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

During the nine months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $1,053 million and $1,974 million, respectively. During the nine months ended September 30, 2011 and 2010, gross gains of $21 million and $34 million, respectively, and gross losses of $9 million and $6 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Arkansas

Entergy Arkansas holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts. The securities held as of September 30, 2011 and December 31, 2010 are summarized as follows:

	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2011
Equity Securities	$298.1	$41.1	$3.9
Debt Securities	206.7	14.6	0.5
Total	$504.8	$55.7	$4.4

2010
Equity Securities	$319.7	$74.2	$0.3
Debt Securities	201.1	11.0	1.0
Total	$520.8	$85.2	$1.3

The amortized cost of debt securities was $192.5 million as of September 30, 2011 and $191.2 million as of December 31, 2010. As of September 30, 2011, the debt securities have an average coupon rate of approximately 3.60%, an average duration of approximately 4.64 years, and an average maturity of approximately 5.25 years. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$119.3	$3.9	$19.0	$0.4
More than 12 months	-	-	1.0	0.1
Total	$119.3	$3.9	$20.0	$0.5

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$-	$-	$44.3	$1.0
More than 12 months	6.6	0.3	-	-
Total	$6.6	$0.3	$44.3	$1.0

The fair value of debt securities, summarized by contractual maturities, as of September 30, 2011 and December 31, 2010 are as follows:

	2011		2010
	(In Millions)

Less than 1 year	$	3.5	$	5.3
1 year - 5 years		84.5		100.1
5 years - 10 years		113.1		85.2
10 years - 15 years		2.7		4.5
15 years - 20 years		-		-
20 years+		2.9		6.0
Total	$	206.7	$	201.1

During the three months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $36.5 million and $46.1 million, respectively. During the three months ended September 30, 2011 and 2010, gross gains of $2.2 million and $2.2 million, respectively, and gross losses of $0.1 million and $0.04 million, respectively, were reclassified out of other comprehensive income into earnings.

During the nine months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $82.7 million and $178.4 million, respectively. During the nine months ended September 30, 2011 and 2010, gross gains of $3.5 million and $4.8 million, respectively, and gross losses of $0.1 million and $0.6 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Gulf States Louisiana

Entergy Gulf States Louisiana holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts. The securities held as of September 30, 2011 and December 31, 2010 are summarized as follows:

	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2011
Equity Securities	$213.6	$20.4	$4.1
Debt Securities	177.8	15.3	0.3
Total	$391.4	$35.7	$4.4

2010
Equity Securities	$234.9	$41.7	$1.4
Debt Securities	158.7	8.8	0.8
Total	$393.6	$50.5	$2.2

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The amortized cost of debt securities was $164.2 million as of September 30, 2011 and $150.0 million as of December 31, 2010. As of September 30, 2011, the debt securities have an average coupon rate of approximately 4.67%, an average duration of approximately 6.01 years, and an average maturity of approximately 9.30 years. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$56.7	$3.5	$17.9	$0.2
More than 12 months	2.5	0.6	1.1	0.1
Total	$59.2	$4.1	$19.0	$0.3

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$-	$-	$22.6	$0.6
More than 12 months	18.6	1.4	0.9	0.2
Total	$18.6	$1.4	$23.5	$0.8

The fair value of debt securities, summarized by contractual maturities, as of September 30, 2011 and December 31, 2010 are as follows:

	2011		2010
	(In Millions)

Less than 1 year	$	5.0	$	4.7
1 year - 5 years		36.3		35.0
5 years - 10 years		58.8		54.2
10 years - 15 years		61.2		48.1
15 years - 20 years		5.1		3.7
20 years+		11.4		13.0
Total	$	177.8	$	158.7

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

During the three months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $35.9 million and $4.8 million, respectively. During the three months ended September 30, 2011 and 2010, gross gains of $0.8 million and $0.05 million, respectively, and gross losses of $0.4 million and $0.2 million, respectively, were reclassified out of other comprehensive income into earnings.

During the nine months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $56.5 million and $83.6 million, respectively. During the nine months ended September 30, 2011 and 2010, gross gains of $1.3 million and $1.6 million, respectively, and gross losses of $0.5 million and $0.4 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Louisiana

Entergy Louisiana holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts. The securities held as of September 30, 2011 and December 31, 2010 are summarized as follows:

	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2011
Equity Securities	$132.2	$18.0	$5.0
Debt Securities	103.4	8.8	0.2
Total	$235.6	$26.8	$5.2

2010
Equity Securities	$143.9	$31.0	$1.7
Debt Securities	96.6	5.3	0.1
Total	$240.5	$36.3	$1.8

The amortized cost of debt securities was $89.5 million as of September 30, 2011 and $91.0 million as of December 31, 2010. As of September 30, 2011, the debt securities have an average coupon rate of approximately 3.96%, an average duration of approximately 4.68 years, and an average maturity of approximately 9.12 years. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$34.9	$2.7	$4.3	$0.2
More than 12 months	9.1	2.3	0.1	-
Total	$44.0	$5.0	$4.4	$0.2

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$-	$-	$4.8	$0.1
More than 12 months	18.9	1.7	0.2	-
Total	$18.9	$1.7	$5.0	$0.1

The fair value of debt securities, summarized by contractual maturities, as of September 30, 2011 and December 31, 2010 are as follows:

	2011		2010
	(In Millions)

Less than 1 year	$	4.3	$	5.3
1 year - 5 years		33.8		28.1
5 years - 10 years		26.5		31.5
10 years - 15 years		20.0		14.1
15 years - 20 years		1.8		2.9
20 years+		17.0		14.7
Total	$	103.4	$	96.6

During the three months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $3.7 million and $2.7 million, respectively. During the three months ended September 30, 2011 and 2010, gross gains of $0 million and $0.03 million, respectively, and gross losses of $0.04 million and $0.03 million, respectively, were reclassified out of other comprehensive income into earnings.

During the nine months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $11.5 million and $29.4 million, respectively. During the nine months ended September 30, 2011 and 2010, gross gains of $0.09 million and $0.6 million, respectively, and gross losses of $0.07 million and $0.1 million, respectively, were reclassified out of other comprehensive income into earnings.

System Energy

System Energy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts. The securities held as of September 30, 2011 and December 31, 2010 are summarized as follows:

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2011
Equity Securities	$207.1	$20.7	$14.7
Debt Securities	186.1	9.3	0.2
Total	$393.2	$30.0	$14.9

2010
Equity Securities	$224.0	$37.3	$5.2
Debt Securities	163.9	4.4	1.5
Total	$387.9	$41.7	$6.7

The amortized cost of debt securities was $171.9 million as of September 30, 2011 and $159.3 million as of December 31, 2010. As of September 30, 2011, the debt securities have an average coupon rate of approximately 3.44%, an average duration of approximately 4.99 years, and an average maturity of approximately 6.72 years. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$77.1	$8.0	$23.9	$0.2
More than 12 months	27.1	6.7	-	-
Total	$104.2	$14.7	$23.9	$0.2

	Equity Securities		Debt Securities
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)

Less than 12 months	$-	$-	$63.0	$1.5
More than 12 months	61.1	5.2	-	-
Total	$61.1	$5.2	$63.0	$1.5

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair value of debt securities, summarized by contractual maturities, as of September 30, 2011 and December 31, 2010 are as follows:

	2011		2010
	(In Millions)

Less than 1 year	$	6.1	$	1.8
1 year - 5 years		96.4		79.8
5 years - 10 years		58.5		52.3
10 years - 15 years		0.5		2.5
15 years - 20 years		4.8		3.8
20 years+		19.8		23.7
Total	$	186.1	$	163.9

During the three months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $60.4 million and $98.5 million, respectively. During the three months ended September 30, 2011 and 2010, gross gains of $1.6 million and $2.2 million, respectively, and gross losses of $0.04 million and $0.1 million, respectively, were reclassified out of other comprehensive income into earnings.

During the nine months ended September 30, 2011 and 2010, proceeds from the dispositions of securities amounted to $166.9 million and $236.7 million, respectively. During the nine months ended September 30, 2011 and 2010, gross gains of $2.1 million and $3.6 million, respectively, and gross losses of $1.0 million and $0.3 million, respectively, were reclassified out of other comprehensive income into earnings.

Other-than-temporary impairments and unrealized gains and losses

Entergy, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, and System Energy evaluate unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred. The assessment of whether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt security before recovery of its amortized costs. Further, if Entergy does not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss). Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the three and nine months ended September 30, 2011 and 2010. The assessment of whether an investment in an equity security has suffered an other-than-temporary impairment continues to be based on a number of factors including, first, whether Entergy has the ability and intent to hold the investment to recover its value, the duration and severity of any losses, and, then, whether it is expected that the investment will recover its value within a reasonable period of time. Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments. Entergy did not record material charges to other income in the three and nine months ended September 30, 2011 and 2010, respectively, resulting from the recognition of the other-than-temporary impairment of certain equity securities held in its decommissioning trust funds.

NOTE 10. INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

See Note 3 to the financial statements in the Form 10-K for a discussion of tax proceedings. Following are updates to that discussion.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Income Tax Litigation

As discussed in more detail in the Form 10-K, in October 2010 the United States Tax Court entered a decision in favor of Entergy for tax years 1997 and 1998. There were two issues before the Court, depreciation of street lighting assets and the ability to credit the UK Windfall Tax as a foreign tax credit. The IRS has not appealed street lighting depreciation, but has appealed the foreign tax credit matter to the United States Court of Appeals for the Fifth Circuit and oral argument has been scheduled for November 2011.

Other Tax Matters

During the second quarter 2011, Entergy effectively settled an uncertain tax position with the IRS resulting in the reversal of a provision for uncertain tax positions of approximately $41 million.

In August 2011, Entergy entered into a settlement agreement with the IRS relating to the mark-to-market income tax treatment of various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility. See Note 8 to the financial statements in the Form 10-K for further details regarding this contract and a previous LPSC-approved settlement regarding sharing of tax benefits from the tax treatment of the contract.

With respect to income tax accounting for wholesale electric power purchase agreements, Entergy recognized income for tax purposes of approximately $1.5 billion, which represents a reversal of previously deducted temporary differences on which deferred taxes had been provided. Also in connection with this settlement, Entergy recognized a gain for income tax purposes of approximately $1.03 billion on the formation of a wholly-owned subsidiary in 2005 with a corresponding step-up in the tax basis of depreciable assets resulting in additional tax depreciation at Entergy Louisiana. Because Entergy Louisiana is entitled to deduct additional tax depreciation of $1.03 billion in the future, Entergy Louisiana recorded a deferred tax asset for this additional tax basis. The tax expense associated with the gain is offset by recording the deferred tax asset and by utilization of net operating losses. With the recording of the deferred tax asset, there was a corresponding increase to Entergy Louisiana’s member’s equity account. After consideration of the taxable income recognition and the additional depreciation deductions provided for in the settlement, Entergy’s net operating loss carryover was reduced by approximately $2.5 billion.

The agreement with the IRS effectively settled the tax treatment of various wholesale electric power purchase and sale agreements, resulting in the reversal in third quarter 2011 of approximately $422 million of deferred tax liabilities and liabilities for uncertain tax positions at Entergy Louisiana, with a corresponding reduction in income tax expense. Under the terms of an LPSC-approved settlement, Entergy Louisiana will share over a 15-year period a portion of the benefits of the settlement with its customers, and recorded a $199 million regulatory charge and a corresponding regulatory liability to reflect this obligation.

During the second quarter 2011, Entergy filed an Application for Change in Accounting Method related to the allocation of overhead costs between production and non-production activity. The accounting method affects the amount of overhead that will be capitalized or deducted for tax purposes.

NOTE 11. PROPERTY, PLANT, AND EQUIPMENT (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Acquisition

In April 2011, Entergy Louisiana purchased Unit 2 of the Acadia Energy Center, a 580 MW generating unit located near Eunice, Louisiana, from an independent power producer. The Acadia Energy Center, which entered commercial service in 2002, consists of two combined-cycle gas-fired generating units, each nominally rated at 580 MW. Entergy Louisiana purchased 100 percent of Acadia Unit 2 and a 50 percent ownership interest in the facility’s common assets for approximately $300 million. In a separate transaction, Cleco Power acquired Acadia Unit 1 and the other 50 percent interest in the facility’s common assets. Cleco Power will serve as operator for the entire facility. The FERC and the LPSC approved the transaction.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Construction Expenditures in Accounts Payable

Construction expenditures included in accounts payable at September 30, 2011 are $122.9 million for Entergy, $12.9 million for Entergy Arkansas, $13.6 million for Entergy Gulf States Louisiana, $23.8 million for Entergy Louisiana, $2.7 million for Entergy Mississippi, $0.2 million for Entergy New Orleans, $2.4 million for Entergy Texas, and $25.2 million for System Energy.

Vermont Yankee

See Impairment of Long-Lived Assets in Note 1 to the financial statements in the Form 10-K, including a discussion of the Vermont Yankee nuclear power plant. Following are updates to that discussion.

In March 2011, the NRC renewed Vermont Yankee’s operating license for an additional 20 years, as a result of which the license now expires in 2032. In May 2011, the Vermont Department of Public Service and the New England Coalition petitioned the United States Court of Appeals for the District of Columbia seeking judicial review of the NRC’s issuance of the renewed operating license alleging that the license had been issued without a valid and effective water quality certification under Section 401 of the Clean Water Act. Entergy Nuclear Vermont Yankee and Entergy Nuclear Operations, Inc. intervened in the proceeding. Motions by the parties for summary disposition were denied by the court, which set a briefing schedule on the merits that ends in February 2012. Oral argument may be scheduled after briefing is completed.

On April 18, 2011, Entergy Nuclear Vermont Yankee, the owner of Vermont Yankee, and Entergy Nuclear Operations, the operator of Vermont Yankee, filed a complaint in the United States District Court for the District of Vermont seeking a declaratory judgment and injunctive relief to prevent the state of Vermont from forcing Vermont Yankee to cease operation on March 21, 2012. Specifically the complaint asserts, in part, the following:

Atomic Energy Act Preemption. Under the Supremacy Clause of the U.S. Constitution, the U.S. Supreme Court held in 1983 that a state has no authority over (1) nuclear power plant licensing and operations or (2) the radiological safety of a nuclear power plant. In violation of these legal principles, Vermont has asserted that it can shut down a federally licensed and operating nuclear power plant, and that it can regulate the plant based upon Vermont’s safety concerns.

Federal Power Act Preemption and the Commerce Clause of the U.S. Constitution. Vermont is prohibited from conditioning post-March 2012 operation of Vermont Yankee on the plant’s agreement to provide power to Vermont utilities at preferential wholesale rates. The Federal Power Act preempts any state interference with the FERC’s exclusive regulation of rates in the wholesale power market. The Commerce Clause of the U.S. Constitution bars a state from discriminatory regulation of private markets that favors in-state over out-of-state residents.

In addition to seeking a declaratory judgment, the complaint also requests a preliminary and permanent injunction enjoining the enforcement of Vermont statutes, regulations, or other laws purporting to regulate the operation and licensing and/or the radiological safety of Vermont Yankee; enjoining Vermont and its officials from undertaking any steps, based on denial of a certificate of public good, to shutdown Vermont Yankee, to prevent Vermont Yankee from delivering power to the interstate grid, or to prohibit the storage at Vermont Yankee of spent nuclear fuel; and enjoining Vermont and its officials from conditioning Vermont Yankee’s continued operation upon Entergy Nuclear Vermont Yankee’s agreement to provide below-market wholesale electricity rates to Vermont retail utilities. On April 22, 2011, Entergy Nuclear Vermont Yankee and Entergy Nuclear Operations filed in the proceeding a motion for a preliminary injunction. A hearing on the motion for a preliminary injunction was held on June 23 and 24, 2011. On July 18, 2011, the court denied Entergy’s motion for preliminary injunction solely on the ground that Entergy had not

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

shown that any irreparable harm it might suffer before the trial on the complaint for a declaratory judgment would be ameliorated or redressed by a preliminary injunction. The court’s preliminary injunction ruling did not decide whether Entergy had shown a likelihood of success on the merits of its preemption claims. A trial on the complaint for a declaratory judgment was held in September 2011 and the decision of the court is pending.

As discussed further in the Form 10-K, after evaluating various factors, including the progress of the litigation in the U.S. District Court, if Entergy concludes that Vermont Yankee is unlikely to operate significantly beyond its original license expiration date in 2012, it could result in an impairment of part or all of the carrying value of the plant. In preparing its third quarter 2011 financial statements Entergy evaluated these factors and concluded that the carrying value of Vermont Yankee is not impaired as of September 30, 2011. As of September 30, 2011 the net carrying value of the plant, including nuclear fuel, is $459 million.

NOTE 12. VARIABLE INTEREST ENTITIES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, System Energy)

See Note 18 to the financial statements in the Form 10-K for a discussion of variable interest entities. See Note 4 to the financial statements herein for details of the nuclear fuel companies’ credit facility and commercial paper borrowings and long-term debt.

Entergy Louisiana and System Energy are each considered to hold a variable interest in the lessors from which they lease, respectively, undivided interests representing approximately 9.3% of the Waterford 3 and 11.5% of the Grand Gulf nuclear plants. Entergy Louisiana and System Energy are the lessees under these arrangements, which are described in more detail in Note 10 to the consolidated financial statements in the Form 10-K. Entergy Louisiana made payments on its lease, including interest, of $12.8 million and $9.8 million in the three months ended September 30, 2011 and 2010, respectively. Entergy Louisiana made payments on its lease, including interest, of $50.4 million and $35.1 million in the nine months ended September 30, 2011 and 2010, respectively. System Energy made payments on its lease, including interest, of $2.0 million and $2.9 million in the three months ended September 30, 2011 and 2010, respectively. System Energy made payments on its lease, including interest, of $49.4 million and $48.6 million in the nine months ended September 30, 2011 and 2010, respectively.

__________________________________

In the opinion of the management of Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas and System Energy, the accompanying unaudited financial statements contain all adjustments (consisting primarily of normal recurring accruals and reclassification of previously reported amounts to conform to current classifications) necessary for a fair statement of the results for the interim periods presented. The business of the Registrant Subsidiaries is subject to seasonal fluctuations, however, with the peak periods occurring during the third quarter. The results for the interim periods presented should not be used as a basis for estimating results of operations for a full year.

Table of Contents

Part I, Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of September 30, 2011, evaluations were performed under the supervision and with the participation of Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy (individually "Registrant" and collectively the "Registrants") management, including their respective Principal Executive Officers (PEO) and Principal Financial Officers (PFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on the evaluations, each PEO and PFO has concluded that, as to the Registrant or Registrants for which they serve as PEO or PFO, the Registrant’s or Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms; and that the Registrant’s or Registrants’ disclosure controls and procedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant’s or Registrants’ management, including their respective PEOs and PFOs, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Controls over Financial Reporting

Under the supervision and with the participation of the Registrants’ management, including their respective PEOs and PFOs, the Registrants evaluated changes in internal control over financial reporting that occurred during the quarter ended September 30, 2011 and found no change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Third Quarter 2011 Compared to Third Quarter 2010

Net income decreased $12.3 million primarily due to a higher effective income tax rate, lower net revenue, higher taxes other than income taxes, and lower other income. The decrease was partially offset by lower other operation and maintenance expenses and lower interest expense.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income decreased $7.1 million primarily due to higher other operation and maintenance expenses, a higher effective income tax rate, and lower other income, partially offset by lower depreciation and amortization expenses, higher net revenue, and lower interest expense.

Net Revenue

Third Quarter 2011 Compared to Third Quarter 2010

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory credits. Following is an analysis of the change in net revenue comparing the third quarter 2011 to the third quarter 2010.

	Amount
	(In Millions)

2010 net revenue	$	397.0
Volume/weather		(8.8	)
Miscellaneous insignificant items		6.2
2011 net revenue	$	394.4

The volume/weather variance is primarily due to the effect of less favorable weather on residential and commercial sales as compared to the same period in 2010, partially offset by more favorable weather-adjusted usage.

Gross operating revenues and fuel expenses

Gross operating revenues increased primarily due to an increase of $71.7 million in fuel cost recovery revenues due to a change in the energy cost recovery rider effective April 2011.

Fuel expenses increased primarily due to an increase in the recovery from customers of deferred fuel costs.

Table of Contents

Entergy Arkansas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

	Amount
	(In Millions)

2010 net revenue	$	980.1
Retail electric price		28.1
Volume/weather		(13.6	)
Capacity acquisition recovery		(10.2	)
Other		1.2
2011 net revenue	$	985.6

The retail electric price variance is primarily due to a base rate increase effective July 2010. See Note 2 to the financial statements in the Form 10-K for discussion of the rate case settlement.

The capacity acquisition recovery variance is primarily due to the cessation of the capacity acquisition rider to recover expenses incurred because those costs are recovered in base rates effective July 2010.

Other Income Statement Variances

Third Quarter 2011 Compared to Third Quarter 2010

Other operation and maintenance expenses decreased primarily due to a $5.7 million decrease in compensation and benefits costs resulting from an increase in the accrual for incentive-based compensation in 2010.

Taxes other than income taxes increased primarily due to an increase in local franchise taxes resulting from higher retail electric revenues as compared with the same period in 2010. There is no effect on net income as these taxes are recovered through the franchise tax rider.

Other income decreased primarily due to carrying charges on storm restoration costs recorded in 2010 related to the January 2009 ice storm.

Interest expense decreased primarily due to the refinancing of debt at lower interest rates.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Other operation and maintenance expenses increased primarily due to an increase of $5.3 million in nuclear expenses primarily due to higher labor and contract costs, and an increase of $4.1 million in fossil costs due to higher fossil plant outage costs. The increase was offset by an $8.1 million decrease in compensation and benefits costs resulting from an increase in the accrual for incentive-based compensation in 2010.

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

Other income decreased primarily due to carrying charges on storm restoration costs recorded in 2010 related to the January 2009 ice storm.

Interest expense decreased primarily due to the refinancing of debt at lower interest rates.

Table of Contents

Entergy Arkansas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Income Taxes

The effective income tax rates for the third quarter 2011 and the nine months ended September 30, 2011 were 45.9% and 43.8% respectively. The differences in the effective income tax rates for the third quarter 2011 and the nine months ended September 30, 2011 versus the federal statutory rate of 35.0% are primarily due to state income taxes, an adjustment to the provision for uncertain tax positions, and book and tax differences related to utility plant items.

The effective income tax rates for the third quarter 2010 and the nine months ended September 30, 2010 were 38.4% and 40.3%, respectively. The differences in the effective income tax rates for the third quarter 2010 and the nine months ended September 30, 2010 versus the federal statutory rate of 35.0% were primarily due to certain book and tax differences related to utility plant items and state income taxes, partially offset by the amortization of investment tax credits.

Liquidity and Capital Resources

April 2011 Storms

In April 2011, several thunderstorms with either tornados or straight-line winds caused damage to Entergy Arkansas’s transmission and distribution lines, equipment, poles, and other facilities. The incurred cost of repairing that damage is $70 million, of which $19 million is operating and maintenance costs that are charged against the storm cost provision, and the remainder is capital investment.

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

	2011			2010
	(In Thousands)

Cash and cash equivalents at beginning of period	$	106,102		$	86,233

Cash flow provided by (used in):
Operating activities		334,762			453,333
Investing activities		(359,111	)		(231,198	)
Financing activities		(78,971	)		(201,080	)
Net increase (decrease) in cash and cash equivalents		(103,320	)		21,055

Cash and cash equivalents at end of period	$	2,782		$	107,288

Operating Activities

Cash flow from operations decreased $118.6 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to a change of $53.2 million in deferred fuel costs primarily due to a reduction in the rough production cost equalization recovery rate because Entergy Arkansas’s obligation has decreased, an increase of $47.6 million in pension contributions, and spending resulting from the April 2011 storms discussed above. The decrease was partially offset by income tax payments of $56.8 million in 2010. See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits funding. In the third quarter 2010 the Registrant Subsidiaries made tax payments in accordance with the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement. The payments resulted from the reversal of temporary differences for which the Registrant Subsidiaries previously received cash tax benefits.

Table of Contents

Entergy Arkansas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Investing Activities

Net cash flow used in investing activities increased $127.9 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to an increase in nuclear fuel purchases primarily due to the purchase of nuclear fuel from System Fuels because the Utility companies will now purchase nuclear fuel as System Fuels procures it, rather than primarily at the time of refueling. The increase is also due to $51 million in storm restoration spending resulting from the April 2011 storms, as discussed above. The increase was partially offset by money pool activity.

Decreases in Entergy Arkansas’s receivable from the money pool are a source of cash flow, and Entergy Arkansas’s receivable from the money pool decreased by $41.5 million in the nine months ended September 30, 2011, compared to increasing by $8.1 million for the nine months ended September 30, 2010. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

Financing Activities

Net cash flow used in financing activities decreased $122.1 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to a $56.3 million decrease in dividends paid on common stock and money pool activity, partially offset by a decrease of $37.8 million in net borrowings from the nuclear fuel company variable interest entity credit facility.

Increases in Entergy Arkansas’s payable to the money pool are a source of cash flow, and Entergy Arkansas’s payable to the money pool increased by $32.1 million for the nine months ended September 30, 2011.

Capital Structure

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

	September 30, 2011			December 31, 2010

Debt to capital		55.5	%		55.9	%
Effect of excluding the securitization bonds		(1.6	)%		(1.6	)%
Debt to capital, excluding securitization bonds (1)		53.9	%		54.3	%
Effect of subtracting cash		(0.0	)%		(1.5	)%
Net debt to net capital, excluding securitization bonds (1)		53.9	%		52.8	%

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

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, preferred stock without sinking fund, and shareholders’ equity. Net capital consists of capital less cash and cash equivalents. Entergy Arkansas uses the net debt to net capital ratio and the ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy Arkansas’s financial condition.

Table of Contents

Entergy Arkansas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Arkansas’s uses and sources of capital. Entergy Arkansas is developing its capital investment plan for 2012 through 2014 and currently anticipates making $1.4 billion in capital investments during that period, including approximately $701 million for maintenance of existing assets. The remaining $662 million is associated with specific investments such as environmental compliance spending, transmission upgrades and system improvements, and other investments, such as potential opportunities through the Utility's supply plan initiatives that support its ability to meet load growth, including the Hot Spring Energy Facility acquisition. Following are additional updates to the information provided in the Form 10-K.

Entergy Arkansas’s receivables from or (payables to) the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

($32,102)	$41,463	$37,000	$28,859

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

In April 2011, Entergy Arkansas entered into a $78 million credit facility that expires in April 2012. No borrowings were outstanding under the credit facility as of September 30, 2011.

Hot Spring Energy Facility Purchase Agreement

State and Local Rate Regulation

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – State and Local Rate Regulation" in the Form 10-K for a discussion of state and local rate regulation.

Federal Regulation

See "System Agreement" and "Independent Coordinator of Transmission" in the "Rate, Cost-recovery, and Other Regulation" section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for updates to the discussion in the Form 10-K.

Table of Contents

Entergy Arkansas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Nuclear Matters

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters" in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks" in the Form 10-K for a discussion of environmental risks.

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 Arkansas’s accounting for nuclear decommissioning costs, unbilled revenue, and qualified pension and other postretirement benefits.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	658,356		$	575,062		$	1,618,687		$	1,647,491

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		100,381			27,961			269,494			310,430
Purchased power		164,901			156,581			373,244			373,561
Nuclear refueling outage expenses		11,172			10,008			31,391			31,867
Other operation and maintenance		129,300			135,045			373,530			360,703
Decommissioning		9,588			9,016			28,327			26,635
Taxes other than income taxes		24,989			23,004			63,520			65,561
Depreciation and amortization		54,483			53,353			163,993			178,056
Other regulatory credits - net		(1,280	)		(6,481	)		(9,611	)		(16,607	)
TOTAL		493,534			408,487			1,293,888			1,330,206

OPERATING INCOME		164,822			166,575			324,799			317,285

OTHER INCOME
Allowance for equity funds used during construction		2,033			677			4,913			3,435
Interest and investment income		3,938			6,073			13,099			19,795
Miscellaneous - net		(1,213	)		(452	)		(3,102	)		(537	)
TOTAL		4,758			6,298			14,910			22,693

INTEREST EXPENSE
Interest expense		20,726			21,863			62,749			67,222
Allowance for borrowed funds used during construction		(818	)		(396	)		(1,919	)		(2,007	)
TOTAL		19,908			21,467			60,830			65,215

INCOME BEFORE INCOME TAXES		149,672			151,406			278,879			274,763

Income taxes		68,727			58,116			122,028			110,819

NET INCOME		80,945			93,290			156,851			163,944

Preferred dividend requirements and other		1,718			1,718			5,155			5,155

EARNINGS APPLICABLE TO
COMMON STOCK	$	79,227		$	91,572		$	151,696		$	158,789

See Notes to Financial Statements.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	2011			2010
	(In Thousands)

OPERATING ACTIVITIES
Net income	$	156,851		$	163,944
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization		255,051			261,978
Deferred income taxes, investment tax credits, and non-current taxes accrued		(17,536	)		54,376
Changes in assets and liabilities:
Receivables		(69,699	)		(22,478	)
Fuel inventory		(8,904	)		(10,265	)
Accounts payable		134,019			(37,034	)
Prepaid taxes and taxes accrued		126,029			-
Interest accrued		(5,716	)		(2,133	)
Deferred fuel costs		8,112			61,311
Other working capital accounts		(129,416	)		44,039
Provisions for estimated losses		(2,491	)		(8,563	)
Other regulatory assets		23,478			(30,562	)
Pension and other postretirement liabilities		(110,423	)		(50,900	)
Other assets and liabilities		(24,593	)		29,620
Net cash flow provided by operating activities		334,762			453,333

INVESTING ACTIVITIES
Construction expenditures		(271,443	)		(212,468	)
Allowance for equity funds used during construction		6,451			3,435
Nuclear fuel purchases		(127,978	)		(12,261	)
Proceeds from sale of equipment		-			2,489
Changes in other investments		-			2,415
Proceeds from nuclear decommissioning trust fund sales		82,655			178,441
Investment in nuclear decommissioning trust funds		(95,723	)		(185,126	)
Change in money pool receivable - net		41,463			(8,141	)
Investment in affiliates		10,994			-
Remittances to transition charge account		(11,866	)		-
Payments from transition charge account		6,336			-
Other		-			18
Net cash flow used in investing activities		(359,111	)		(231,198	)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		54,804			119,782
Retirement of long-term debt		(39,145	)		(100,000	)
Changes in short-term borrowings - net		(4,477	)		(42,307	)
Changes in money pool payable - net		32,102			-
Dividends paid:
Common stock		(117,100	)		(173,400	)
Preferred stock		(5,155	)		(5,155	)
Net cash flow used in financing activities		(78,971	)		(201,080	)

Net increase (decrease) in cash and cash equivalents		(103,320	)		21,055

Cash and cash equivalents at beginning of period		106,102			86,233

Cash and cash equivalents at end of period	$	2,782		$	107,288

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$	64,670		$	65,337
Income taxes	$	-		$	56,847

See Notes to Financial Statements.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	2,782		$	4,250
Temporary cash investments		-			101,852
Total cash and cash equivalents		2,782			106,102
Securitization recovery trust account		7,942			2,412
Accounts receivable:
Customer		140,820			79,905
Allowance for doubtful accounts		(24,735	)		(24,402	)
Associated companies		47,653			82,583
Other		61,079			61,135
Accrued unbilled revenues		76,867			74,227
Total accounts receivable		301,684			273,448
Deferred fuel costs		53,390			61,502
Fuel inventory - at average cost		46,603			37,699
Materials and supplies - at average cost		139,427			140,095
Deferred nuclear refueling outage costs		30,089			23,099
System agreement cost equalization		190,174			52,160
Prepaid taxes		-			86,693
Prepayments and other		10,561			7,877
TOTAL		782,652			791,087

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds		504,773			520,841
Non-utility property - at cost (less accumulated depreciation)		1,679			1,684
Other		3,182			14,176
TOTAL		509,634			536,701

UTILITY PLANT
Electric		7,963,491			7,787,348
Property under capital lease		1,252			1,303
Construction work in progress		173,286			114,324
Nuclear fuel		254,186			188,611
TOTAL UTILITY PLANT		8,392,215			8,091,586
Less - accumulated depreciation and amortization		3,819,208			3,683,001
UTILITY PLANT - NET		4,573,007			4,408,585

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		91,145			98,836
Other regulatory assets (includes securitization property of
$108,470 as of September 30, 2011 and $118,505 as of
December 31, 2010)		876,662			892,449
Other		25,933			23,710
TOTAL		993,740			1,014,995

TOTAL ASSETS	$	6,859,033		$	6,751,368

See Notes to Financial Statements.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

		2011		2010
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	-	$	35,000
Short-term borrowings		58,300		62,777
Accounts payable:
Associated companies		252,932		92,627
Other		117,166		114,454
Customer deposits		79,530		72,535
Taxes accrued		39,336		-
Accumulated deferred income taxes		74,601		82,820
Interest accrued		21,304		27,020
Other		31,724		21,115
TOTAL		674,893		508,348

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		1,649,784		1,661,365
Accumulated deferred investment tax credits		43,436		44,928
Other regulatory liabilities		102,429		140,801
Decommissioning		630,491		602,164
Accumulated provisions		5,479		7,970
Pension and other postretirement liabilities		305,502		415,925
Long-term debt (includes securitization bonds of $119,923 as
of September 30, 2011 and $124,066 as of December 31, 2010)		1,882,056		1,828,910
Other		10,111		20,701
TOTAL		4,629,288		4,722,764

Commitments and Contingencies

Preferred stock without sinking fund		116,350		116,350

COMMON EQUITY
Common stock, $0.01 par value, authorized 325,000,000
shares; issued and outstanding 46,980,196 shares in 2011
and 2010		470		470
Paid-in capital		588,444		588,444
Retained earnings		849,588		814,992
TOTAL		1,438,502		1,403,906

TOTAL LIABILITIES AND EQUITY	$	6,859,033	$	6,751,368

See Notes to Financial Statements.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON EQUITY
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

	Common Equity
	Common Stock		Paid-in Capital		Retained Earnings			Total
Balance at December 31, 2009	$	470	$	588,444	$	822,647		$	1,411,561

Net income		-		-		163,944			163,944
Common stock dividends		-		-		(173,400	)		(173,400	)
Preferred stock dividends		-		-		(5,155	)		(5,155	)

Balance at September 30, 2010	$	470	$	588,444	$	808,036		$	1,396,950


Balance at December 31, 2010	$	470	$	588,444	$	814,992		$	1,403,906

Net income		-		-		156,851			156,851
Common stock dividends		-		-		(117,100	)		(117,100	)
Preferred stock dividends		-		-		(5,155	)		(5,155	)

Balance at September 30, 2011	$	470	$	588,444	$	849,588		$	1,438,502

See Notes to Financial Statements.

Table of Contents

ENTERGY ARKANSAS, INC. AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended					Increase/
Description	2011			2010		(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	280		$	245	$	35			14
Commercial		146			123		23			19
Industrial		134			112		22			20
Governmental		6			5		1			20
Total retail		566			485		81			17
Sales for resale:
Associated companies		75			70		5			7
Non-associated companies		22			17		5			29
Other		(5	)		3		(8	)		(267	)
Total	$	658		$	575	$	83			14

Billed Electric Energy
Sales (GWh):
Residential		2,769			2,777		(8	)		-
Commercial		1,905			1,910		(5	)		-
Industrial		2,003			2,006		(3	)		-
Governmental		81			83		(2	)		(2	)
Total retail		6,758			6,776		(18	)		-
Sales for resale:
Associated companies		1,937			1,852		85			5
Non-associated companies		267			150		117			78
Total		8,962			8,778		184			2


	Nine Months Ended					Increase/
Description		2011			2010	(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	612		$	628	$	( 16	)		(3	)
Commercial		345			343		2			1
Industrial		318			322		(4	)		(1	)
Governmental		15			15		-			-
Total retail		1,290			1,308		(18	)		(1	)
Sales for resale:
Associated companies		212			225		(13	)		(6	)
Non-associated companies		69			57		12			21
Other		48			57		(9	)		(16	)
Total	$	1,619		$	1,647	$	( 28	)		(2	)

Billed Electric Energy
Sales (GWh):
Residential		6,674			6,802		(128	)		(2	)
Commercial		4,690			4,718		(28	)		(1	)
Industrial		5,320			5,331		(11	)		-
Governmental		210			211		(1	)		-
Total retail		16,894			17,062		(168	)		(1	)
Sales for resale:
Associated companies		5,318			5,908		(590	)		(10	)
Non-associated companies		892			537		355			66
Total		23,104			23,507		(403	)		(2	)

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Third Quarter 2011 Compared to Third Quarter 2010

Net income decreased $25 million primarily due to lower net revenue, a higher effective income tax rate, and higher depreciation and amortization expenses, partially offset by lower other operation and maintenance expenses.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income remained relatively unchanged, decreasing $0.2 million, primarily due to lower net revenue and higher depreciation and amortization expenses, offset by lower interest expense and lower other operation and maintenance expenses.

Net Revenue

Third Quarter 2011 Compared to Third Quarter 2010

	Amount
	(In Millions)

2010 net revenue	$	282.1
Retail electric price		(16.7	)
Volume/weather		(10.3	)
Other		(1.3	)
2011 net revenue	$	253.8

The retail electric price variance is primarily due to the deferral of prior year purchased power capacity costs recovered throughout 2011 and an increase in credits passed on to customers as a result of the Act 55 storm cost financing. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Hurricane Gustav and Hurricane Ike” and Note 2 to the financial statements in the Form 10-K for a discussion of the Act 55 storm cost financing.

The volume/weather variance is primarily due to a decrease in sales volume in the unbilled period as well as a decrease of 43 GWh, or 1%, in billed electricity usage, including the effect of less favorable weather on the residential and commercial sectors.

Table of Contents

Entergy Gulf States Louisiana, L.L.C.

Management’s Financial Discussion and Analysis

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

	Amount
	(In Millions)

2010 net revenue	$	729.4
Retail electric price		(17.9	)
Fuel recovery		8.4
Other		(1.3	)
2011 net revenue	$	718.6

The retail electric price variance is primarily due to an increase in credits passed on to customers as a result of the Act 55 storm cost financing. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Hurricane Gustav and Hurricane Ike” and Note 2 to the financial statements in the Form 10-K for a discussion of the Act 55 storm cost financing.

The fuel recovery variance resulted primarily from an adjustment to deferred fuel costs in the first quarter 2010.

Other Income Statement Variances

Third Quarter 2011 Compared to Third Quarter 2010

Other operation and maintenance expenses decreased primarily due to:

·	a $4.1 million decrease in compensation and benefits costs resulting from an increase in the accrual for incentive-based compensation in 2010; and

·	a decrease of $2.1 million in transmission expenses primarily due to lower transmission equalization expenses in 2011.

Depreciation and amortization expenses increased primarily due to a revision in the second quarter 2010 related to depreciation on storm cost-related assets. Recovery of the storm cost-related assets will now be through the Act 55 financing of storm costs as approved by the LPSC in June 2010. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Hurricane Gustav and Hurricane Ike” and Note 2 to the financial statements in the Form 10-K for a discussion of the Act 55 storm cost financing.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Other operation and maintenance expenses decreased primarily due to:

·	a decrease of $5.9 million in transmission expenses primarily due to lower transmission equalization expenses in 2011;

·	a $3.7 million decrease in compensation and benefits costs resulting from an increase in the accrual for incentive-based compensation in 2010; and

·	a decrease of $3.3 million in fossil expenses primarily due to lower fossil plant outage costs.

The decrease was offset by an increase of $3.5 million in nuclear expenses due to increased materials costs and higher nuclear labor costs as well as several individually insignificant items.

Table of Contents

Entergy Gulf States Louisiana, L.L.C.

Management’s Financial Discussion and Analysis

Depreciation and amortization expenses increased primarily due to a revision in the second quarter 2010 related to depreciation on storm cost-related assets and an increase in plant in service. Recovery of the storm cost-related assets will now be through the Act 55 financing of storm costs as approved by the LPSC in June 2010. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Hurricane Gustav and Hurricane Ike” and Note 2 to the financial statements in the Form 10-K for a discussion of the Act 55 storm cost financing.

Interest expense decreased primarily due to:

·	redemptions of first mortgage bonds of $68 million in June 2010 and $304 million in November 2010, partially offset by the issuance of first mortgage bonds of $250 million in October 2010. See Note 4 to the financial statements in the Form 10-K for details of long-term debt; and

·	interest expense accrued in 2010 related to the expected result of the LPSC Staff audit of the fuel adjustment clause for the period 1995 through 2004.

Income Taxes

The effective income tax rate was 42.5% for the third quarter 2011 and 39.4% for the nine months ended September 30, 2011. The differences in the effective income tax rates for the third quarter 2011 and for the nine months ended September 30, 2011 versus the federal statutory rate of 35% are primarily due to state income taxes, book and tax differences related to utility plant items, and the provision for uncertain tax positions, partially offset by book and tax differences related to non-taxable distributions earned on the preferred membership interests purchased from Entergy Holdings Company with the proceeds received from the Act 55 storm cost financings.

The effective income tax rate was 34.1% for the third quarter 2010 and 38.7% for the nine months ended September 30, 2010. The difference in the effective income tax rates for the third quarter 2010 versus the federal statutory rate of 35% was primarily due to book and tax differences related to Act 55 storm cost financing, partially offset by flow-through book and tax timing differences. The difference in the effective income tax rate for the nine months ended September 30, 2010 versus the federal statutory rate of 35% was primarily due to certain book and tax differences related to utility plant items and state income taxes, partially offset by book and tax differences related to Act 55 storm cost financing and the amortization of investment tax credits.

Liquidity and Capital Resources

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

	2011			2010
	(In Thousands)

Cash and cash equivalents at beginning of period	$	155,173		$	144,460

Cash flow provided by (used in):
Operating activities		314,457			571,576
Investing activities		(179,431	)		(438,753	)
Financing activities		(264,335	)		(147,806	)
Net decrease in cash and cash equivalents		(129,309	)		(14,983	)

Cash and cash equivalents at end of period	$	25,864		$	129,477

Table of Contents

Entergy Gulf States Louisiana, L.L.C.

Management’s Financial Discussion and Analysis

Operating Activities

Net cash flow provided by operating activities decreased $257.1 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to:

·	proceeds of $240.3 million received from the LURC as a result of the Act 55 storm cost financings in 2010;

·	higher nuclear refueling outage spending at River Bend. River Bend had a refueling outage in 2011 and did not have one in 2010; and

·	an increase of $6.7 million in pension contributions. See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits.

The decrease was partially offset by income tax payments of $38.2 million made in 2010. In the third quarter 2010 the Registrant Subsidiaries made tax payments in accordance with the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement. The payments result from the reversal of temporary differences for which the Registrant Subsidiaries previously received cash tax benefits.

Investing Activities

Net cash flow used in investing activities decreased $259.3 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to:

the investment of $150.3 million in affiliate securities and the investment of $90 million in the storm reserve escrow account as a result of the Act 55 storm cost financings. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Hurricane Gustav and Hurricane Ike” and Note 2 to the financial statements in the Form 10-K for a discussion of the Act 55 storm cost financing; and

·	money pool activity.

The decrease was partially offset by an increase in nuclear fuel purchases because River Bend had a refueling outage in 2011 and did not have one in 2010.

Decreases in Entergy Gulf States Louisiana’s receivable from the money pool are a source of cash flow, and Entergy Gulf States Louisiana’s receivable from the money pool decreased by $49.7 million for the nine months ended September 30, 2011 compared to decreasing by $4.8 million for the nine months ended September 30, 2010. The money pool is an inter-company borrowing arrangement designed to reduce the Utility operating companies’ need for external short-term borrowings.

Financing Activities

Net cash flow used in financing activities increased $116.5 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to an increase of $157.6 million in common equity distributions, partially offset by an increase in net borrowings against the nuclear fuel company variable interest entity credit facility in 2011. See Note 4 to the financial statements for a discussion of the credit facility.

Table of Contents

Entergy Gulf States Louisiana, L.L.C.

Management’s Financial Discussion and Analysis

Capital Structure

Entergy Gulf States Louisiana’s capitalization is balanced between equity and debt, as shown in the following table. The increase in the debt to capital ratio for Entergy Gulf States Louisiana as of September 30, 2011 is primarily due to a decrease in member’s equity as a result of an increase of $157.7 million in common equity distributions.

	September 30, 2011	December 31, 2010

Debt to capital	53.8%	51.2%
Effect of subtracting cash	(0.4)%	(2.6)%
Net debt to net capital	53.4%	48.6%

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 and member’s equity. Net capital consists of capital less cash and cash equivalents. Entergy Gulf States Louisiana 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 Gulf States Louisiana’s financial condition.

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Gulf States Louisiana’s uses and sources of capital. Entergy Gulf States Louisiana is developing its capital investment plan for 2012 through 2014 and currently anticipates making $646 million in capital investments during that period, including approximately $457 million for maintenance of existing assets. The remaining $189 million is associated with specific investments such as environmental compliance spending, transmission upgrades and system improvements, and other investments such as potential opportunities through the Utility's supply plan initiatives that support its ability to meet load growth. Following are additional updates to the information provided in the Form 10-K.

Entergy Gulf States Louisiana’s receivables from the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

$13,280	$63,003	$45,373	$50,131

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

As discussed in the Form 10-K, Entergy Gulf States Louisiana has a credit facility in the amount of $100 million scheduled to expire in August 2012. No borrowings were outstanding under the facility as of September 30, 2011.

New Nuclear Development

See the Form 10-K for a discussion of the project option being developed by Entergy Gulf States Louisiana and Entergy Louisiana for new nuclear generation at River Bend. In March 2010, Entergy Gulf States Louisiana and Entergy Louisiana filed with the LPSC seeking approval to continue the development activities. Discovery is complete and the parties have filed testimony and pre-hearing briefs. The testimony and pre-hearing brief of the LPSC Staff generally support the request of Entergy Gulf States Louisiana and Entergy Louisiana, although other parties filed briefs, without supporting testimony, in opposition to the request. An evidentiary hearing was held in October 2011 and the ALJ’s decision is pending.

Table of Contents

Entergy Gulf States Louisiana, L.L.C.

Management’s Financial Discussion and Analysis

Entergy Louisiana’s Ninemile Point Unit 6 Self-Build Project

In June 2011, Entergy Louisiana filed with the LPSC an application seeking certification that the public necessity and convenience would be served by Entergy Louisiana’s construction of a combined-cycle gas turbine generating facility (Ninemile 6) at its existing Ninemile Point electric generating station. Ninemile 6 will be a nominally-sized 550 MW unit that is estimated to cost approximately $721 million to construct, excluding interconnection and transmission upgrades. Entergy Gulf States Louisiana joined in the application, seeking certification of its purchase under a life-of-unit power purchase agreement of up to 35% of the capacity and energy generated by Ninemile 6. The Ninemile 6 capacity and energy is proposed to be allocated 55% to Entergy Louisiana, 25% to Entergy Gulf States Louisiana, and 20% to Entergy New Orleans. Entergy New Orleans has filed a request with the City Council to approve its purchase under a life-of-unit power purchase agreement of this capacity and energy. The City Council has approved a procedural schedule that leads to a decision in the first quarter 2012. If the City Council does not approve this power purchase agreement in a timely manner, then an allocation of 65% to Entergy Louisiana and 35% to Entergy Gulf States Louisiana is proposed. If approvals are obtained from the LPSC and other permitting agencies, Ninemile 6 construction is expected to begin in 2012, and the unit is expected to commence commercial operation by mid-2015. The ALJ has established a schedule for the LPSC proceeding that includes February 27 - March 7, 2012 hearing dates.

State and Local Rate Regulation

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – State and Local Rate Regulation" in the Form 10-K for a discussion of state and local rate regulation. Following are updates to that discussion.

Table of Contents

Entergy Gulf States Louisiana, L.L.C.

Management’s Financial Discussion and Analysis

Federal Regulation

Nuclear Matters

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters" in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks" in the Form 10-K for a discussion of environmental risks.

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 Gulf States Louisiana’s accounting for nuclear decommissioning costs, unbilled revenue, and qualified pension and other postretirement benefits.

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.
INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	587,275		$	622,200		$	1,565,964		$	1,576,985
Natural gas		9,673			10,572			49,444			63,687
TOTAL		596,948			632,772			1,615,408			1,640,672

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		135,034			117,475			291,592			250,464
Purchased power		224,452			235,010			622,949			667,037
Nuclear refueling outage expenses		4,454			6,448			13,796			17,771
Other operation and maintenance		89,081			95,433			255,566			262,312
Decommissioning		3,572			3,374			10,565			9,978
Taxes other than income taxes		20,668			20,258			58,246			56,668
Depreciation and amortization		35,784			28,752			107,183			96,554
Other regulatory credits - net		(16,373	)		(1,803	)		(17,695	)		(6,233	)
TOTAL		496,672			504,947			1,342,202			1,354,551

OPERATING INCOME		100,276			127,825			273,206			286,121

OTHER INCOME
Allowance for equity funds used during construction		2,273			1,329			6,176			4,140
Interest and investment income		10,269			11,288			30,100			30,666
Miscellaneous - net		(2,643	)		(1,996	)		(6,515	)		(5,348	)
TOTAL		9,899			10,621			29,761			29,458

INTEREST EXPENSE
Interest expense		20,731			22,620			63,311			78,225
Allowance for borrowed funds used during construction		(931	)		(869	)		(2,624	)		(2,668	)
TOTAL		19,800			21,751			60,687			75,557

INCOME BEFORE INCOME TAXES		90,375			116,695			242,280			240,022

Income taxes		38,429			39,756			95,352			92,846

NET INCOME		51,946			76,939			146,928			147,176

Preferred distribution requirements and other		206			206			619			621


EARNINGS APPLICABLE TO COMMON EQUITY	$	51,740		$	76,733		$	146,309		$	146,555

See Notes to Financial Statements.

Table of Contents

(Page left blank intentionally)

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	2011			2010
	(In Thousands)

OPERATING ACTIVITIES
Net income	$	146,928		$	147,176
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization		154,739			142,212
Deferred income taxes, investment tax credits, and non-current taxes accrued		(21,223	)		94,696
Changes in assets and liabilities:
Receivables		(153,380	)		(95,713	)
Fuel inventory		9,427			5,308
Accounts payable		(64,105	)		53,474
Prepaid taxes and taxes accrued		148,158			(24,945	)
Interest accrued		5,877			10,043
Deferred fuel costs		(1,596	)		(20,694	)
Other working capital accounts		75,582			17,511
Provisions for estimated losses		1,670			82,647
Other regulatory assets		27,171			144,721
Pension and other postretirement liabilities		(16,605	)		(10,070	)
Other assets and liabilities		1,814			25,210
Net cash flow provided by operating activities		314,457			571,576

INVESTING ACTIVITIES
Construction expenditures		(156,944	)		(171,142	)
Allowance for equity funds used during construction		6,176			4,140
Insurance proceeds		-			2,243
Nuclear fuel purchases		(73,853	)		(33,363	)
Proceeds from the sale of nuclear fuel		9,647			-
Investment in affiliates		-			(150,264	)
Payment to storm reserve escrow account		-			(90,026	)
Proceeds from nuclear decommissioning trust fund sales		56,543			83,625
Investment in nuclear decommissioning trust funds		(70,623	)		(91,860	)
Change in money pool receivable - net		49,723			4,758
Changes in other investments - net		-			3,136
Other		(100	)		-
Net cash flow used in investing activities		(179,431	)		(438,753	)

FINANCING ACTIVITIES
Retirement of long-term debt		-			(12,721	)
Changes in credit borrowings - net		18,500			(8,300	)
Dividends/distributions paid:
Common equity		(281,950	)		(124,300	)
Preferred membership interests		(619	)		(621	)
Other		(266	)		(1,864	)
Net cash flow used in financing activities		(264,335	)		(147,806	)

Net decrease in cash and cash equivalents		(129,309	)		(14,983	)

Cash and cash equivalents at beginning of period		155,173			144,460

Cash and cash equivalents at end of period	$	25,864		$	129,477

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized	$	55,073		$	65,992
Income taxes	$	(7	)	$	38,220

Noncash financing activities:
Repayment by Entergy Texas of assumed long-term debt	$	-		$	167,742

See Notes to Financial Statements.

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.
BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	247		$	231
Temporary cash investments		25,617			154,942
Total cash and cash equivalents		25,864			155,173
Accounts receivable:
Customer		89,266			60,369
Allowance for doubtful accounts		(1,587	)		(1,306	)
Associated companies		187,280			119,252
Other		31,241			27,728
Accrued unbilled revenues		60,116			56,616
Total accounts receivable		366,316			262,659
Fuel inventory - at average cost		16,400			25,827
Materials and supplies - at average cost		112,019			113,302
Deferred nuclear refueling outage costs		25,572			7,372
Prepaid taxes		-			40,946
Prepayments and other		6,502			5,127
TOTAL		552,673			610,406

OTHER PROPERTY AND INVESTMENTS
Investment in affiliate preferred membership interests		339,664			339,664
Decommissioning trust funds		391,365			393,580
Non-utility property - at cost (less accumulated depreciation)		161,652			156,845
Storm reserve escrow account		90,225			90,125
Other		12,610			12,011
TOTAL		995,516			992,225

UTILITY PLANT
Electric		7,010,486			6,907,268
Natural gas		128,786			124,020
Construction work in progress		131,703			119,017
Nuclear fuel		195,231			202,609
TOTAL UTILITY PLANT		7,466,206			7,352,914
Less - accumulated depreciation and amortization		3,888,652			3,812,394
UTILITY PLANT - NET		3,577,554			3,540,520

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		225,397			234,406
Other regulatory assets		252,721			270,883
Deferred fuel costs		100,124			100,124
Other		16,010			14,832
TOTAL		594,252			620,245

TOTAL ASSETS	$	5,719,995		$	5,763,396

See Notes to Financial Statements.

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.
BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

		2011			2010
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	60,000		$	-
Accounts payable:
Associated companies		91,142			71,601
Other		70,126			160,246
Customer deposits		49,332			48,631
Taxes accrued		107,212			-
Accumulated deferred income taxes		6,762			1,749
Interest accrued		33,138			27,261
Deferred fuel costs		20,705			22,301
Pension and other postretirement liabilities		7,702			7,415
System agreement cost equalization		87,140			-
Other		21,082			15,049
TOTAL		554,341			354,253

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		1,376,749			1,405,374
Accumulated deferred investment tax credits		82,355			84,858
Other regulatory liabilities		66,306			83,479
Decommissioning and asset retirement cost liabilities		354,719			339,925
Accumulated provisions		99,350			97,680
Pension and other postretirement liabilities		203,540			220,432
Long-term debt		1,543,011			1,584,332
Long-term payables - associated companies		31,522			32,596
Other		32,834			51,254
TOTAL		3,790,386			3,899,930

Commitments and Contingencies

EQUITY
Preferred membership interests without sinking fund		10,000			10,000
Member's equity		1,403,857			1,539,517
Accumulated other comprehensive loss		(38,589	)		(40,304	)
TOTAL		1,375,268			1,509,213

TOTAL LIABILITIES AND EQUITY	$	5,719,995		$	5,763,396

See Notes to Financial Statements.

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.
STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

			Common Equity
	Preferred Membership Interests		Member's Equity			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2009	$	10,000	$	1,473,930		$	(42,171	)	$	1,441,759

Net income		-		147,176			-			147,176
Other comprehensive income:
Pension and other postretirement liabilities (net of tax expense of $1,556)		-		-			1,614			1,614
Total comprehensive income										148,790

Dividends/distributions declared on common equity		-		(124,300	)		-			(124,300	)
Dividends/distributions declared on preferred membership interests		-		(621	)		-			(621	)
Other		-		(15	)		-			(15	)

Balance at September 30, 2010	$	10,000	$	1,496,170		$	(40,557	)	$	1,465,613


Balance at December 31, 2010	$	10,000	$	1,539,517		$	(40,304	)	$	1,509,213

Net income		-		146,928			-			146,928
Other comprehensive income:
Pension and other postretirement liabilities (net of tax expense of $1,522)		-		-			1,715			1,715
Total comprehensive income										148,643

Dividends/distributions declared on common equity		-		(281,950	)		-			(281,950	)
Dividends/distributions declared on preferred membership interests		-		(619	)		-			(619	)
Other		-		(19	)		-			(19	)

Balance at September 30, 2011	$	10,000	$	1,403,857		$	(38,589	)	$	1,375,268

See Notes to Financial Statements.

Table of Contents

ENTERGY GULF STATES LOUISIANA, L.L.C.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended				Increase/
Description	2011		2010		(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	166	$	167	$	(1	)		(1	)
Commercial		125		125		-			-
Industrial		136		130		6			5
Governmental		5		5		-			-
Total retail		432		427		5			1
Sales for resale:
Associated companies		136		163		(27	)		(17	)
Non-associated companies		14		16		(2	)		(13	)
Other		5		16		(11	)		(69	)
Total	$	587	$	622	$	(35	)		(6	)

Billed Electric Energy
Sales (GWh):
Residential		1,802		1,844		(42	)		(2	)
Commercial		1,516		1,548		(32	)		(2	)
Industrial		2,299		2,276		23			1
Governmental		61		53		8			15
Total retail		5,678		5,721		(43	)		(1	)
Sales for resale:
Associated companies		2,462		2,804		(342	)		(12	)
Non-associated companies		243		340		(97	)		(29	)
Total		8,383		8,865		(482	)		(5	)


	Nine Months Ended				Increase/
Description		2011		2010	(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	386	$	393	$	(7	)		(2	)
Commercial		325		324		1			-
Industrial		379		371		8			2
Governmental		16		15		1			7
Total retail		1,106		1,103		3			-
Sales for resale:
Associated companies		381		372		9			2
Non-associated companies		42		62		(20	)		(32	)
Other		37		40		(3	)		(8	)
Total	$	1,566	$	1,577	$	(11	)		(1	)

Billed Electric Energy
Sales (GWh):
Residential		4,278		4,364		(86	)		(2	)
Commercial		4,004		3,991		13			-
Industrial		6,819		6,605		214			3
Governmental		168		160		8			5
Total retail		15,269		15,120		149			1
Sales for resale:
Associated companies		6,598		6,710		(112	)		(2	)
Non-associated companies		753		1,297		(544	)		(42	)
Total		22,620		23,127		(507	)		(2	)

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Third Quarter 2011 Compared to Third Quarter 2010

Net income increased $243.4 million primarily due to a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts, which resulted in a $422 million reduction in income tax expense. The net income effect was partially offset by a $199 million regulatory charge, which reduced net revenue, because a portion of the benefits will be shared with customers. See Note 10 to the financial statements for additional discussion of the settlement and benefit sharing.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income increased $260.7 million primarily due to a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts, which resulted in a $422 million reduction in income tax expense. The net income effect was partially offset by a $199 million regulatory charge, which reduced net revenue, because a portion of the benefits will be shared with customers. See Note 10 to the financial statements for additional discussion of the settlement and benefit sharing.

Net Revenue

Third Quarter 2011 Compared to Third Quarter 2010

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges (credits). Following is an analysis of the change in net revenue comparing the third quarter 2011 to the third quarter 2010.

	Amount
	(In Millions)

2010 net revenue	$	314.0
Mark-to-market tax settlement sharing		(198.7	)
Retail electric price		18.7
Other		(3.7	)
2011 net revenue	$	130.3

The retail electric price variance is primarily due to a formula rate plan increase effective May 2011. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the formula rate plan increase.

100

Table of Contents

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Other regulatory charges (credits)

Other regulatory credits decreased primarily due to a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts because a portion of the benefits of the settlement will be shared with customers. See Note 10 to the financial statements for additional discussion of the settlement and benefit sharing.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

	Amount
	(In Millions)

2010 net revenue	$	821.4
Mark-to-market tax settlement sharing		(198.7	)
Retail electric price		23.2
Other		4.2
2011 net revenue	$	650.1

Other regulatory charges (credits)

Income Taxes

The effective income tax rate was 727.8% for the third quarter 2011 and (359.5)% for the nine months ended September 30, 2011. The differences in the effective income tax rates for the third quarter 2011 and the nine months ended September 30, 2011 versus the federal statutory rate of 35.0% are primarily due to the reversal in the third quarter 2011 for uncertain tax positions resulting from a settlement with the IRS related to the mark-to-market income tax treatment of power purchase contracts. See Note 10 to the financial statements for additional discussion of the settlement.

The effective income tax rate for the third quarter of 2010 was 25.7%. The difference in the effective income tax rate for the third quarter of 2010 versus the federal statutory rate of 35.0% was primarily due to book and tax differences related to Act 55 storm cost financing, allowance for equity funds used during construction, and state income taxes, partially offset by certain book and tax differences related to utility plant items. The effective income tax rate for the nine months ended September 30, 2010 was 28.1%. The difference in the effective income tax rate for the nine months ended September 30, 2010 versus the federal statutory rate of 35.0% was primarily due to book and tax differences related to Act 55 storm cost financing and allowance for equity funds used during construction, partially offset by certain book and tax differences related to utility plant items.

101

Table of Contents

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

	2011			2010
	(In Thousands)

Cash and cash equivalents at beginning of period	$	123,254		$	151,849

Cash flow provided by (used in):
Operating activities		248,173			821,481
Investing activities		(699,523	)		(806,079	)
Financing activities		381,593			127,085
Net increase (decrease) in cash and cash equivalents		(69,757	)		142,487

Cash and cash equivalents at end of period	$	53,497		$	294,336

Operating Activities

Cash flow provided by operating activities decreased $573.3 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to proceeds of $462.4 million received in 2010 from the LURC as a result of the Act 55 storm cost financings, decreased recovery of fuel costs due to a decrease in the amount of deferred fuel to be recovered compared to the same period in the prior year, and the purchase of $28.1 million of fuel oil from System Fuels because System Fuels will no longer procure fuel oil for the Utility companies.

Investing Activities

Net cash flow used in investing activities decreased $106.6 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to:

the investment in 2010 of $262.4 million in affiliate securities and the investment of $200 million in the storm reserve escrow account as a result of the Act 55 storm cost financings. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Hurricane Gustav and Hurricane Ike” and Note 2 to the financial statements in the Form 10-K for a discussion of the Act 55 storm cost financing.; and

·	money pool activity.

The increase was partially offset by:

·	the purchase of the Acadia Power Plant for approximately $300 million in April 2011; and

·	an increase in nuclear fuel purchases because of the timing of refueling outages and the purchase of nuclear fuel from System Fuels because the Utility companies will now purchase nuclear fuel as System Fuels procures it, rather than primarily at the time of refueling.

Decreases in Entergy Louisiana’s receivable from the money pool are a source of cash flow, and Entergy Louisiana’s receivable from the money pool decreased by $22.8 million for the nine months ended September 30, 2011 compared to increasing by $50.8 million for the nine months ended September 30, 2010. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

102

Table of Contents

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Financing Activities

Net cash flow provided by financing activities increased $254.5 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to the following cash flow activity:

·	the issuance by Entergy Louisiana Investment Recovery Funding, L.L.C., a wholly owned subsidiary of Entergy Louisiana, of $207.2 million of senior secured investment recovery bonds with a coupon of 2.04% in September 2011;

·	the issuance of $200 million of 4.8% Series first mortgage bonds in March 2011;

·	an increase in borrowings on the nuclear fuel company variable interest entity’s credit facility;

·	the issuance of the $20 million Series F note by the nuclear fuel company variable interest entity in March 2011;

·	the retirement of $55 million of 4.67% Series first mortgage bonds in June 2010; and

·	the retirement of the $30 million Series D note by the nuclear fuel company variable interest entity in January 2010.

These increases were offset by a principal payment of $35.5 million in 2011 for the Waterford 3 sale-leaseback obligation compared to a principal payment of $17.3 million in 2010 and $31.2 million in common equity dividends paid in 2011.

Capital Structure

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

	September 30, 2011	December 31, 2010

Debt to capital	43.8%	46.1%
Effect of excluding securitization bonds	(0.6)%	0.0%
Debt to capital, excluding securitization bonds (1)	43.2%	46.1%
Effect of subtracting cash	(2.4)%	(1.7)%
Net debt to net capital, excluding securitization bonds (1)	40.8%	44.4%

(1)	Calculation excludes the securitization bonds, which are non-recourse to Entergy Louisiana.

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 and member’s equity. Net capital consists of capital less cash and cash equivalents. Entergy Louisiana uses the net debt to net capital ratio and the ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy Louisiana’s financial condition.

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Louisiana’s uses and sources of capital. Entergy Louisiana is developing its capital investment plan for 2012 through 2014 and currently anticipates making $1.9 billion in capital investments during that period, including approximately $651 million for maintenance of existing assets. The remaining $1.2 billion is associated with specific investments such as environmental compliance spending, transmission upgrades and system improvements, and other investments, such as the Waterford 3 steam generator replacement and potential opportunities through the Utility's supply plan initiatives that support its ability to meet load growth, including the Ninemile Point Unit 6 self-build project. Following are additional updates to the information provided in the Form 10-K.

103

Table of Contents

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Louisiana’s receivables from the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

$27,107	$49,887	$103,593	$52,807

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

As discussed in the Form 10-K, Entergy Louisiana has a credit facility in the amount of $200 million scheduled to expire in August 2012. No borrowings were outstanding under the facility as of September 30, 2011.

In September 2011, Entergy Louisiana Investment Recovery Funding I, L.L.C., a company wholly-owned and consolidated by Entergy Louisiana, issued $207.2 million of senior secured investment recovery bonds to recover Entergy Louisiana’s investment recovery costs associated with the cancelled Little Gypsy repowering project. The bonds have a coupon of 2.04% and an expected maturity date of June 2021. With the proceeds, Entergy Louisiana Investment Recovery Funding purchased from Entergy Louisiana the investment recovery property, which is the right to recover from customers through an investment recovery charge amounts sufficient to service the bonds. In accordance with the financing order, Entergy Louisiana will apply the proceeds it received from the sale of the investment recovery property as a reimbursement for previously-incurred investment recovery costs.

Acadia Unit 2 Purchase Agreement

As discussed more fully in the Form 10-K, in October 2009, Entergy Louisiana announced that it 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 acquired the plant on April 29, 2011.

Little Gypsy Repowering Project

See the Form 10-K for a discussion of the Little Gypsy repowering project. As discussed in the Form 10-K, in January 2011 all parties conducted a mediation on the disputed issues, and thereafter, reached agreement on a settlement of all disputed issues, including cost recovery and cost allocation. The settlement provides for Entergy Louisiana to recover $200 million as of March 31, 2011, and carrying costs on that amount on specified terms thereafter. The settlement also provides for Entergy Louisiana to recover the approved project costs by securitization. In April 2011, Entergy Louisiana filed an application with the LPSC to authorize the securitization of the investment recovery costs associated with the project and to issue a financing order by which Entergy Louisiana may accomplish such securitization. In August 2011 the LPSC issued an order approving the settlement and also issued a financing order for the securitization. See the discussion above and in Note 4 to the financial statements for a discussion of the September 2011 issuance of the securitization bonds.

Waterford 3 Steam Generator Replacement Project

104

Table of Contents

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

generators. Entergy Louisiana has formally reported its findings to the NRC. At this time, a requirement to perform a mid-cycle outage for further inspections in order to allow the plant to continue operation until its Fall 2012 refueling outage is not anticipated. Entergy Louisiana currently expects the cost of the project, including carrying costs, to increase to approximately $687 million if the replacement occurs during the Fall 2012 refueling outage.

New Nuclear Development

Ninemile Point Unit 6 Self-Build Project

In June 2011, Entergy Louisiana filed with the LPSC an application seeking certification that the public necessity and convenience would be served by Entergy Louisiana’s construction of a combined-cycle gas turbine generating facility (Ninemile 6) at its existing Ninemile Point electric generating station. Ninemile 6 will be a nominally-sized 550 MW unit that is estimated to cost approximately $721 million to construct, excluding interconnection and transmission upgrades. Entergy Gulf States Louisiana joined in the application, seeking certification of its purchase under a life-of-unit power purchase agreement of up to 35% of the capacity and energy generated by Ninemile 6. The Ninemile 6 capacity and energy is proposed to be allocated 55% to Entergy Louisiana, 25% to Entergy Gulf States Louisiana, and 20% to Entergy New Orleans. Entergy New Orleans has filed a request with the City Council to approve its purchase under a life-of-unit power purchase agreement of this capacity and energy. The City Council has approved a procedural schedule that leads to a decision in the first quarter 2012. If the City Council does not approve this power purchase agreement in a timely manner, then an allocation of 65% to Entergy Louisiana and 35% to Entergy Gulf States Louisiana is proposed. If approvals are obtained from the LPSC and other permitting agencies, Ninemile 6 construction is expected to begin in 2012, and the unit is expected to commence commercial operation by mid-2015. The ALJ has established a schedule for the LPSC proceeding that includes February 27 - March 7, 2012 hearing dates.

State and Local Rate Regulation

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – State and Local Rate Regulation" in the Form 10-K for a discussion of state and local rate regulation.

105

Table of Contents

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Federal Regulation

Nuclear Matters

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters" in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks" in the Form 10-K for a discussion of environmental risks.

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 Louisiana’s accounting for nuclear decommissioning costs, unbilled revenue, and qualified pension and other postretirement benefits.

106

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	786,814		$	768,190		$	1,954,095		$	1,999,187

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		221,832			213,587			450,589			516,262
Purchased power		239,484			245,043			670,408			677,518
Nuclear refueling outage expenses		6,861			6,293			21,042			18,563
Other operation and maintenance		107,740			112,931			320,544			319,617
Decommissioning		6,219			5,790			18,328			17,065
Taxes other than income taxes		18,232			18,269			53,316			51,427
Depreciation and amortization		52,991			49,878			154,414			147,396
Other regulatory charges (credits) - net		195,161			(4,473	)		182,951			(15,976	)
TOTAL		848,520			647,318			1,871,592			1,731,872

OPERATING INCOME (LOSS)		(61,706	)		120,872			82,503			267,315

OTHER INCOME
Allowance for equity funds used during construction		8,278			7,551			23,929			21,078
Interest and investment income		21,975			22,950			66,101			57,858
Miscellaneous - net		(1,353	)		(687	)		(2,007	)		(2,759	)
TOTAL		28,900			29,814			88,023			76,177

INTEREST EXPENSE
Interest expense		25,363			28,867			84,698			90,056
Allowance for borrowed funds used during construction		(4,373	)		(5,044	)		(12,776	)		(14,080	)
TOTAL		20,990			23,823			71,922			75,976

INCOME (LOSS) BEFORE INCOME TAXES		(53,796	)		126,863			98,604			267,516

Income taxes (benefit)		(391,518	)		32,543			(354,521	)		75,105

NET INCOME		337,722			94,320			453,125			192,411

Preferred dividend requirements and other		1,738			1,738			5,213			5,213

EARNINGS APPLICABLE TO
COMMON EQUITY	$	335,984		$	92,582		$	447,912		$	187,198

See Notes to Financial Statements.

107

Table of Contents

(Page left blank intentionally)

108

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	2011			2010
	(In Thousands)

OPERATING ACTIVITIES
Net income	$	453,125		$	192,411
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization		212,963			212,507
Deferred income taxes, investment tax credits, and non-current taxes accrued		(273,339	)		59,004
Changes in assets and liabilities:
Receivables		(110,234	)		(112,911	)
Fuel inventory		(25,623	)		-
Accounts payable		(72	)		10,024
Prepaid taxes and taxes accrued		17,526			36,387
Interest accrued		1,342			(3,502	)
Deferred fuel costs		(41,969	)		17,681
Other working capital accounts		(13,528	)		(7,157	)
Provisions for estimated losses		(7,802	)		202,439
Other regulatory assets		84,811			235,374
Pension and other postretirement liabilities		(42,095	)		(19,284	)
Other assets and liabilities		(6,932	)		(1,492	)
Net cash flow provided by operating activities		248,173			821,481

INVESTING ACTIVITIES
Construction expenditures		(314,799	)		(316,756	)
Allowance for equity funds used during construction		23,929			21,078
Nuclear fuel purchases		(135,404	)		-
Proceeds from the sale of nuclear fuel		11,570			-
Payment for purchase of plant		(299,589	)		-
Payment to storm reserve escrow account		-			(200,060	)
Investment in affiliates		-			(262,430	)
Changes in other investments - net		-			9,353
Proceeds from nuclear decommissioning trust fund sales		11,491			29,419
Investment in nuclear decommissioning trust funds		(19,279	)		(35,468	)
Change in money pool receivable - net		22,780			(50,786	)
Other		(222	)		(429	)
Net cash flow used in investing activities		(699,523	)		(806,079	)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		420,076			240,725
Retirement of long-term debt		(35,547	)		(102,326	)
Changes in short-term borrowings - net		33,477			(6,101	)
Distributions paid:
Common equity		(31,200	)		-
Preferred membership interests		(5,213	)		(5,213	)
Net cash flow provided by financing activities		381,593			127,085

Net increase (decrease) in cash and cash equivalents		(69,757	)		142,487

Cash and cash equivalents at beginning of period		123,254			151,849

Cash and cash equivalents at end of period	$	53,497		$	294,336

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid/(received) during the period for:
Interest - net of amount capitalized	$	80,354		$	90,774
Income taxes	$	(77	)	$	10,580

Noncash investing and financing activities:
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.

109

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	2,076		$	708
Temporary cash investments		51,421			122,546
Total cash and cash equivalents		53,497			123,254
Accounts receivable:
Customer		178,272			85,799
Allowance for doubtful accounts		(1,988	)		(1,961	)
Associated companies		62,514			81,050
Other		10,344			14,594
Accrued unbilled revenues		89,453			71,659
Total accounts receivable		338,595			251,141
Accumulated deferred income taxes		-			7,072
Fuel inventory		25,626			3
Materials and supplies - at average cost		141,020			138,047
Deferred nuclear refueling outage costs		31,111			11,364
Prepaid taxes		7,484			25,010
Prepayments and other		16,751			10,719
TOTAL		614,084			566,610

OTHER PROPERTY AND INVESTMENTS
Investment in affiliate preferred membership interests		807,424			807,424
Decommissioning trust funds		235,557			240,535
Storm reserve escrow account		201,194			200,972
Non-utility property - at cost (less accumulated depreciation)		806			946
TOTAL		1,244,981			1,249,877

UTILITY PLANT
Electric		7,782,897			7,216,146
Property under capital lease		264,266			264,266
Construction work in progress		593,623			521,172
Nuclear fuel		146,188			134,528
TOTAL UTILITY PLANT		8,786,974			8,136,112
Less - accumulated depreciation and amortization		3,633,888			3,457,190
UTILITY PLANT - NET		5,153,086			4,678,922

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		134,753			235,404
Other regulatory assets (includes securitization property of
$203,814 as of September 30, 2011 and
$- as of December 31, 2010)		678,586			662,746
Deferred fuel costs		67,998			67,998
Other		34,798			26,866
TOTAL		916,135			993,014

TOTAL ASSETS	$	7,928,286		$	7,488,423

See Notes to Financial Statements.

110

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

		2011			2010
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	25,309		$	35,550
Short-term borrowings		56,543			23,066
Accounts payable:
Associated companies		78,047			148,528
Other		127,079			140,564
Customer deposits		85,495			84,437
Accumulated deferred income taxes		1,100			-
Interest accrued		33,231			31,889
Deferred fuel costs		17,258			59,227
Pension and other postretirement liabilities		8,835			8,632
Other		31,680			17,514
TOTAL		464,577			549,407

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		1,125,149			1,896,685
Accumulated deferred investment tax credits		74,075			76,453
Other regulatory liabilities		281,933			88,899
Decommissioning		339,504			321,176
Accumulated provisions		215,754			223,556
Pension and other postretirement liabilities		303,427			345,725
Long-term debt (includes securitization bonds of
$207,122 as of September 30, 2011 and
$- as of December 31, 2010)		2,173,151			1,771,566
Other		61,836			78,085
TOTAL		4,574,829			4,802,145

Commitments and Contingencies

EQUITY
Preferred membership interests without sinking fund		100,000			100,000
Member's equity		2,812,375			2,061,833
Accumulated other comprehensive loss		(23,495	)		(24,962	)
TOTAL		2,888,880			2,136,871

TOTAL LIABILITIES AND EQUITY	$	7,928,286		$	7,488,423

See Notes to Financial Statements.

111

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND COMPREHENSIVE INCOME
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

			Common Equity
	Preferred Membership Interests		Member's Equity			Accumulated Other Comprehensive Income (Loss)			Total
Balance at December 31, 2009	$	100,000	$	1,837,348		$	(25,539	)	$	1,911,809

Net income		-		192,411			-			192,411
Other comprehensive income:
Pension and other postretirement liabilities (net of tax expense of $1,132)		-		-			1,335			1,335
Total comprehensive income										193,746

Dividends/distributions declared on preferred membership interests		-		(5,213	)		-			(5,213	)

Balance at September 30, 2010	$	100,000	$	2,024,546		$	(24,204	)	$	2,100,342


Balance at December 31, 2010	$	100,000	$	2,061,833		$	(24,962	)	$	2,136,871

Net income		-		453,125			-			453,125
Additional non-cash contribution resulting from tax settlement		-		333,830			-			333,830
Other comprehensive income:
Pension and other postretirement liabilities (net of tax expense of $1,097)		-		-			1,467			1,467
Total comprehensive income										788,422
Dividends/distributions declared on common equity		-		(31,200	)		-			(31,200	)
Dividends/distributions declared on preferred membership interests		-		(5,213	)		-			(5,213	)

Balance at September 30, 2011	$	100,000	$	2,812,375		$	(23,495	)	$	2,888,880

See Notes to Financial Statements.

112

Table of Contents

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended				Increase/
Description	2011		2010		(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	296	$	282	$	14			5
Commercial		169		160		9			6
Industrial		256		212		44			21
Governmental		12		11		1			9
Total retail		733		665		68			10
Sales for resale:
Associated companies		40		86		(46	)		(53	)
Non-associated companies		1		1		-			-
Other		13		16		(3	)		(19	)
Total	$	787	$	768	$	19			2

Billed Electric Energy
Sales (GWh):
Residential		3,089		3,111		(22	)		(1	)
Commercial		1,833		1,835		(2	)		-
Industrial		4,305		3,739		566			15
Governmental		124		121		3			2
Total retail		9,351		8,806		545			6
Sales for resale:
Associated companies		669		1,288		(619	)		(48	)
Non-associated companies		35		12		23			192
Total		10,055		10,106		(51	)		(1	)


	Nine Months Ended				Increase/
Description		2011		2010	(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	667	$	674	$	(7	)		(1	)
Commercial		422		418		4			1
Industrial		649		620		29			5
Governmental		32		32		-			-
Total retail		1,770		1,744		26			1
Sales for resale:
Associated companies		109		181		(72	)		(40	)
Non-associated companies		6		4		2			50
Other		69		70		(1	)		(1	)
Total	$	1,954	$	1,999	$	(45	)		(2	)

Billed Electric Energy
Sales (GWh):
Residential		7,441		7,521		(80	)		(1	)
Commercial		4,729		4,673		56			1
Industrial		11,720		10,666		1,054			10
Governmental		358		365		(7	)		(2	)
Total retail		24,248		23,225		1,023			4
Sales for resale:
Associated companies		1,772		2,481		(709	)		(29	)
Non-associated companies		118		71		47			66
Total		26,138		25,777		361			1

113

Table of Contents

ENTERGY MISSISSIPPI, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Third Quarter 2011 Compared to Third Quarter 2010

Net income remained relatively unchanged, decreasing $1 million, primarily due to a higher effective income tax rate, substantially offset by lower interest expense.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income decreased $5.3 million primarily due to higher other operation and maintenance expenses and a higher effective income tax rate, partially offset by lower interest expense and higher net revenue.

Net Revenue

Third Quarter 2011 Compared to Third Quarter 2010

		Amount
		(In Millions)

2010 net revenue		$156.7
Volume/weather		(5.2)
Other		4.3
2011 net revenue		$155.8

The volume/weather variance is primarily due to a decrease of 123 GWh in weather-adjusted usage in the residential and commercial sectors and a decrease in sales volume in the unbilled sales period.

Gross operating revenues and fuel and purchased power expenses

Gross operating revenues decreased primarily due to a decrease of $39.7 million in fuel cost recovery revenues due to lower fuel rates.

Fuel and purchased power expenses decreased primarily due to a decrease in the average market prices of natural gas and purchased power and a decrease in deferred fuel expense as a result of lower fuel revenues, as discussed above.

114

Table of Contents

Entergy Mississippi, Inc.

Management’s Financial Discussion and Analysis

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges. Following is an analysis of the change in net revenue comparing the nine months ended September 30, 2011 to the nine months ended September 30, 2010.

		Amount
		(In Millions)

2010 net revenue		$423.2
Transmission equalization		3.1
Volume/weather		1.5
Other		(0.4)
2011 net revenue		$427.4

The transmission equalization variance is primarily due to the addition in 2011 of transmission investments that are equalized.

The volume/weather variance is primarily due to the effect of more favorable weather on the residential and commercial sectors as compared to the same period in 2010, partially offset by a decrease in sales volume in the unbilled sales period.

Gross operating revenues and fuel and purchased power expenses

Gross operating revenues decreased primarily due to a decrease of $16.6 million in power management rider revenue, partially offset by an increase of $14.3 million in gross wholesale revenues due to an increase in sales to affiliated customers.

Fuel and purchased power expenses decreased primarily due to a decrease in the average market prices of natural gas and purchased power, partially offset by an increase in deferred fuel expense as a result of higher fuel revenues due to higher fuel rates.

Other Income Statement Variances

Third Quarter 2011 Compared to Third Quarter 2010

Interest expense decreased primarily due to a revision caused by FERC’s acceptance of a change in the treatment of funds received from independent power producers for transmission interconnection projects.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Other operation and maintenance expenses increased primarily due to an increase of $3.9 million in legal expenses due to the deferral in 2010 of certain litigation expenses in accordance with regulatory treatment.

Income Taxes

The effective income tax rate was 37.6% for the third quarter 2011 and 36.6% for the nine months ended September 30, 2011. The difference in the effective income tax rate for the third quarter 2011 versus the federal statutory rate of 35% is primarily due to state income taxes. The difference in the effective income tax rate for the nine months ended September 30, 2011 versus the federal statutory rate of 35% is primarily due to state income taxes and book and tax differences related to utility plant items, partially offset by book and tax differences related to the allowance for equity funds used during construction.

115

Table of Contents

Entergy Mississippi, Inc.

Management’s Financial Discussion and Analysis

The effective income tax rate was 33.8% for the third quarter 2010 and 32.7% for the nine months ended September 30, 2010. The difference in the effective income tax rate for the third quarter 2010 versus the federal statutory rate of 35% was primarily due to certain book and tax differences related to utility plant items, the allowance for equity funds used during construction, and an adjustment to the provision for uncertain tax positions, offset by state income taxes. The difference in the effective income tax rate for the nine months ended September 30, 2010 versus the federal statutory rate of 35% was primarily due to the allowance for equity funds used during construction, certain book and tax differences related to utility plant items, and the amortization of investment tax credits, offset by state income taxes.

Liquidity and Capital Resources

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

		2011	2010
		(In Thousands)

Cash and cash equivalents at beginning of period		$1,216	$91,451

Cash flow provided by (used in):
	Operating activities	43,148	66,386
	Investing activities	(109,146)	(111,906)
	Financing activities	65,761	(45,913)
Net decrease in cash and cash equivalents		(237)	(91,433)

Cash and cash equivalents at end of period		$979	$18

Operating Activities

Cash flow provided by operating activities decreased $23.2 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to the purchase of $42.6 million of fuel oil from System Fuels because System Fuels will no longer procure fuel oil for the Utility companies and an increase of $11 million in pension contributions, partially offset by a smaller under-recovery of deferred fuel costs. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates” in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits.

Investing Activities

Cash flow used in investing activities decreased $2.8 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to a decrease in construction expenditures because of a $49 million payment in 2010 to a System Energy subsidiary for costs associated with the development of new nuclear generation at Grand Gulf and the repayment by System Fuels of Entergy Mississippi’s $5.5 million investment in System Fuels. The decrease was substantially offset by money pool activity, an increase in transmission construction expenditures resulting from an increase in reliability work in 2011, and the repayment by Entergy New Orleans in 2010 of a $7.6 million note issued in resolution of its bankruptcy proceedings.

116

Table of Contents

Entergy Mississippi, Inc.

Management’s Financial Discussion and Analysis

Decreases in Entergy Mississippi’s receivable from the money pool are a source of cash flow, and Entergy Mississippi’s receivable from the money pool decreased $31.4 million for the nine months ended September 30, 2010. Entergy Mississippi did not have a receivable from the money pool for the nine months ended September 30, 2011. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

Financing Activities

Entergy Mississippi’s financing activities provided $65.8 million of cash for the nine months ended September 30, 2011 compared to using $45.9 million of cash for the nine months ended September 30, 2010 primarily due to:

·	the issuance of $275 million of first mortgage bonds in 2011 compared to the issuance of $80 million of first mortgage bonds in 2010; and

·	a decrease of $40.1 million in common equity distributions, partially offset by:

·	the redemption of $180 million of first mortgage bonds in 2011 compared to the redemption of $100 million of first mortgage bonds in 2010; and

·	money pool activity.

Decreases in Entergy Mississippi’s payable to the money pool are a use of cash flow, and Entergy Mississippi’s payable to the money pool decreased by $17.6 million for the nine months ended September 30, 2011 compared to increasing by $22.4 million for the nine months ended September 30, 2010.

Capital Structure

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

	September 30, 2011	December 31, 2010

Debt to capital	52.3%	51.8%
Effect of subtracting cash	0.1%	0.0%
Net debt to net capital	52.4%	51.8%

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, preferred stock without sinking fund, and common equity. Net capital consists of capital less cash and cash equivalents. Entergy Mississippi 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 Mississippi’s financial condition.

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Mississippi’s uses and sources of capital. Entergy Mississippi is developing its capital investment plan for 2012 through 2014 and currently anticipates making $714 million in capital investments during that period, including approximately $388 million for maintenance of existing assets. The remaining $326 million is associated with specific investments such as environmental compliance spending, transmission upgrades and system improvements, and other investments, such as potential opportunities through the Utility's supply plan initiatives that support its ability to meet load growth, including the Hinds Energy Facility acquisition. Following are additional updates to the information provided in the Form 10-K.

117

Table of Contents

Entergy Mississippi, Inc.

Management’s Financial Discussion and Analysis

Entergy Mississippi’s receivables from or (payables to) the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

($15,617)	($33,255)	($22,441)	$31,435

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

In May 2011, Entergy Mississippi renewed its three separate credit facilities through May 2012 in the aggregate amount of $70 million. No borrowings were outstanding under the credit facilities as of September 30, 2011.

Hinds Energy Facility Purchase Agreement

New Nuclear Development

As discussed further in the Form 10-K, Entergy Mississippi is developing a project option for new nuclear generation at Grand Gulf Nuclear Station, pursuant to the Mississippi Baseload Act and the Mississippi Public Utilities Act. In October 2010, Entergy Mississippi filed an application with the MPSC requesting that the MPSC determine that it is in the public interest to preserve the option to construct new nuclear generation at Grand Gulf and that the MPSC approve the deferral of Entergy Mississippi’s costs incurred to date and in the future related to this project, including the accrual of AFUDC or similar carrying charges. In October 2011, Entergy Mississippi and the Mississippi Public Utilities Staff filed with the MPSC a joint stipulation. The stipulation states that there should be a deferral of the $57 million of costs incurred through September 2011 in connection with planning, evaluation, monitoring, and other and related generation resource development activities for new nuclear generation at Grand Gulf. The costs shall be treated as a regulatory asset until the proceeding is resolved. The MPU Staff and Entergy Mississippi also agree that the MPSC should conduct a hearing during 2012 to consider the relief requested by Entergy Mississippi in its application, including evidence regarding whether costs incurred in connection with planning,

118

Table of Contents

Entergy Mississippi, Inc.

Management’s Financial Discussion and Analysis

evaluation, monitoring, and other and related generation resource development activities for new nuclear generation at Grand Gulf were prudently incurred and are otherwise allowable. The MPU Staff and Entergy Mississippi further agree that such prudently incurred costs shall be recoverable in a manner to be determined by the MPSC. In the Stipulation, the MPU Staff and Entergy Mississippi agree that the development of a nuclear unit project option is consistent with the Mississippi Baseload Act. The MPU Staff and Entergy Mississippi further agree that the deferral of costs incurred in connection with planning, evaluation, monitoring, and other and related generation resource development activities for new nuclear generation at Grand Gulf also is consistent with the Mississippi Baseload Act. Entergy Mississippi will not accrue carrying charges or continue to accrue AFUDC on the costs, pending the outcome of the proceeding.

State and Local Rate Regulation

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - State and Local Rate Regulation" in the Form 10-K for a discussion of the formula rate plan and fuel and purchased power cost recovery. Following is an update to that discussion.

Formula Rate Plan

Federal Regulation

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 Mississippi’s accounting for unbilled revenue and qualified pension and other postretirement benefits.

119

Table of Contents

ENTERGY MISSISSIPPI, INC.
INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	365,406		$	407,906		$	956,581		$	959,956

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		111,804			137,516			243,674			220,806
Purchased power		95,319			118,273			270,823			302,367
Other operation and maintenance		53,231			54,552			156,577			153,331
Taxes other than income taxes		18,279			17,928			52,841			50,537
Depreciation and amortization		23,476			22,527			69,630			66,907
Other regulatory charges (credits) - net		2,525			(4,592	)		14,700			13,581
TOTAL		304,634			346,204			808,245			807,529

OPERATING INCOME		60,772			61,702			148,336			152,427

OTHER INCOME
Allowance for equity funds used during construction		1,927			1,815			6,246			4,914
Interest and investment income		120			49			187			370
Miscellaneous - net		(742	)		109			(2,579	)		164
TOTAL		1,305			1,973			3,854			5,448

INTEREST EXPENSE
Interest expense		10,155			13,332			38,604			42,475
Allowance for borrowed funds used during construction		(1,072	)		(1,013	)		(3,474	)		(2,742	)
TOTAL		9,083			12,319			35,130			39,733

INCOME BEFORE INCOME TAXES		52,994			51,356			117,060			118,142

Income taxes		19,925			17,342			42,849			38,666

NET INCOME		33,069			34,014			74,211			79,476

Preferred dividend requirements and other		707			707			2,121			2,121

EARNINGS APPLICABLE TO
COMMON STOCK	$	32,362		$	33,307		$	72,090		$	77,355

See Notes to Financial Statements.

120

Table of Contents

ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	2011			2010
	(In Thousands)

OPERATING ACTIVITIES
Net income	$	74,211		$	79,476
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization		69,630			66,907
Deferred income taxes, investment tax credits, and non-current taxes accrued		34,947			27,892
Changes in assets and liabilities:
Receivables		(19,389	)		(56,998	)
Fuel inventory		(43,219	)		(1,307	)
Accounts payable		(2,248	)		7,364
Taxes accrued		(1,729	)		14
Interest accrued		774			363
Deferred fuel costs		(30,750	)		(77,487	)
Other working capital accounts		4,518			23,388
Provisions for estimated losses		(693	)		(3,172	)
Other regulatory assets		(2,311	)		10,110
Pension and other postretirement liabilities		(26,110	)		(13,686	)
Other assets and liabilities		(14,483	)		3,522
Net cash flow provided by operating activities		43,148			66,386

INVESTING ACTIVITIES
Construction expenditures		(121,813	)		(159,870	)
Allowance for equity funds used during construction		6,246			4,914
Proceeds from sale of assets		868			3,951
Change in money pool receivable - net		-			31,435
Changes in other investments - net		26			7,629
Investments in affiliates		5,527			-
Other		-			35
Net cash flow used in investing activities		(109,146	)		(111,906	)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		268,820			77,167
Retirement of long-term debt		(180,000	)		(100,000	)
Change in money pool payable - net		(17,638	)		22,441
Dividends paid:
Common stock		(3,300	)		(43,400	)
Preferred stock		(2,121	)		(2,121	)
Net cash flow provided by (used in) financing activities		65,761			(45,913	)

Net decrease in cash and cash equivalents		(237	)		(91,433	)

Cash and cash equivalents at beginning of period		1,216			91,451

Cash and cash equivalents at end of period	$	979		$	18

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$	35,861		$	40,168
Income taxes	$	-		$	1,127

See Notes to Financial Statements.

121

Table of Contents

ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	970		$	1,207
Temporary cash investments		9			9
Total cash and cash equivalents		979			1,216
Accounts receivable:
Customer		76,264			58,204
Allowance for doubtful accounts		(1,055	)		(985	)
Associated companies		43,906			41,803
Other		10,919			7,500
Accrued unbilled revenues		37,591			41,714
Total accounts receivable		167,625			148,236
Deferred fuel costs		33,907			3,157
Accumulated deferred income taxes		4,228			19,308
Fuel inventory - at average cost		50,097			6,878
Materials and supplies - at average cost		35,518			34,499
Prepayments and other		6,761			4,902
TOTAL		299,115			218,196

OTHER PROPERTY AND INVESTMENTS
Non-utility property - at cost (less accumulated depreciation)		4,732			4,753
Storm reserve escrow account		31,836			31,862
TOTAL		36,568			36,615

UTILITY PLANT
Electric		3,280,847			3,174,148
Property under capital lease		11,343			13,197
Construction work in progress		143,942			147,169
TOTAL UTILITY PLANT		3,436,132			3,334,514
Less - accumulated depreciation and amortization		1,219,922			1,166,463
UTILITY PLANT - NET		2,216,210			2,168,051

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		64,650			63,533
Other regulatory assets		254,646			253,231
Other		21,156			22,009
TOTAL		340,452			338,773

TOTAL ASSETS	$	2,892,345		$	2,761,635

See Notes to Financial Statements.

122

Table of Contents

ENTERGY MISSISSIPPI, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	-		$	80,000
Accounts payable:
Associated companies		59,717			75,128
Other		44,876			53,417
Customer deposits		67,763			65,873
Taxes accrued		26,010			27,739
Interest accrued		21,868			21,094
System agreement cost equalization		38,136			36,650
Other		13,915			9,895
TOTAL		272,285			369,796

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		703,652			680,467
Accumulated deferred investment tax credits		5,823			6,541
Obligations under capital lease		8,777			10,747
Other regulatory liabilities		4,034			262
Asset retirement cost liabilities		5,615			5,375
Accumulated provisions		38,773			39,466
Pension and other postretirement liabilities		78,802			104,912
Long-term debt		920,424			745,378
Other		8,765			22,086
TOTAL		1,774,665			1,615,234

Commitments and Contingencies

Preferred stock without sinking fund		50,381			50,381

COMMON EQUITY
Common stock, no par value, authorized 12,000,000
shares; issued and outstanding 8,666,357 shares in 2011 and 2010		199,326			199,326
Capital stock expense and other		(690	)		(690	)
Retained earnings		596,378			527,588
TOTAL		795,014			726,224

TOTAL LIABILITIES AND EQUITY	$	2,892,345		$	2,761,635

See Notes to Financial Statements.

123

Table of Contents

ENTERGY MISSISSIPPI, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

	Common Equity
	Common Stock		Capital Stock Expense and Other			Retained Earnings			Total
Balance at December 31, 2009	$	199,326	$	(690	)	$	490,129		$	688,765

Net income		-		-			79,476			79,476
Common stock dividends		-		-			(43,400	)		(43,400	)
Preferred stock dividends		-		-			(2,121	)		(2,121	)

Balance at September 30, 2010	$	199,326	$	(690	)	$	524,084		$	722,720


Balance at December 31, 2010	$	199,326	$	(690	)	$	527,588		$	726,224

Net income		-		-			74,211			74,211
Common stock dividends		-		-			(3,300	)		(3,300	)
Preferred stock dividends		-		-			(2,121	)		(2,121	)

Balance at September 30, 2011	$	199,326	$	(690	)	$	596,378		$	795,014

See Notes to Financial Statements.

124

Table of Contents

ENTERGY MISSISSIPPI, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended				Increase/
Description	2011		2010		(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	159	$	191	$	( 32	)		(17	)
Commercial		117		133		(16	)		(12	)
Industrial		37		44		(7	)		(16	)
Governmental		10		11		(1	)		(9	)
Total retail		323		379		(56	)		(15	)
Sales for resale:
Associated companies		28		14		14			100
Non-associated companies		9		12		(3	)		(25	)
Other		5		3		2			67
Total	$	365	$	408	$	( 43	)		(11	)

Billed Electric Energy
Sales (GWh):
Residential		2,020		2,071		(51	)		(2	)
Commercial		1,522		1,528		(6	)		-
Industrial		641		622		19			3
Governmental		120		118		2			2
Total retail		4,303		4,339		(36	)		(1	)
Sales for resale:
Associated companies		111		76		35			46
Non-associated companies		122		175		(53	)		(30	)
Total		4,536		4,590		(54	)		(1	)


	Nine Months Ended				Increase/
Description		2011		2010	(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	394	$	407	$	( 13	)		(3	)
Commercial		311		314		(3	)		(1	)
Industrial		111		110		1			1
Governmental		28		29		(1	)		(3	)
Total retail		844		860		(16	)		(2	)
Sales for resale:
Associated companies		56		34		22			65
Non-associated companies		22		30		(8	)		(27	)
Other		35		36		(1	)		(3	)
Total	$	957	$	960	$	( 3	)		-

Billed Electric Energy
Sales (GWh):
Residential		4,715		4,851		(136	)		(3	)
Commercial		3,834		3,797		37			1
Industrial		1,745		1,690		55			3
Governmental		316		314		2			1
Total retail		10,610		10,652		(42	)		-
Sales for resale:
Associated companies		316		230		86			37
Non-associated companies		274		357		(83	)		(23	)
Total		11,200		11,239		(39	)		-

125

Table of Contents

ENTERGY NEW ORLEANS, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Third Quarter 2011 Compared to Third Quarter 2010

Net income increased $3.5 million primarily due to lower other operation and maintenance expenses, offset by lower net revenue and a higher effective income tax rate.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income increased $3.6 million primarily due to lower other operation and maintenance expenses and lower interest expense, offset by lower net revenue and a higher effective income tax rate.

Net Revenue

Third Quarter 2011 Compared to Third Quarter 2010

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges (credits). Following is an analysis of the changes in net revenue comparing the third quarter 2011 to the third quarter 2010.

		Amount
		(In Millions)

2010 net revenue		$81.0
Retail electric price		(5.3)
Gas cost recovery asset		(2.5)
Other		(1.7)
2011 net revenue		$71.5

The retail electric price variance is primarily due to a formula rate plan decrease effective October 2010. See Note 2 to the financial statements in the Form 10-K for a discussion of the formula rate plan filing.

The gas cost recovery asset variance is primarily due to the recognition in 2010 of a $3 million gas operations regulatory asset associated with the settlement of Entergy New Orleans’ electric and gas formula rate plan case and the amortization of that asset. See Note 2 to the financial statements in the Form 10-K for additional discussion of the formula rate plan settlement.

Gross operating revenues

Gross operating revenues decreased primarily due to a decrease of $8.0 million in electric fuel cost recovery revenues due to lower fuel rates and a formula rate plan decrease effective October 2010, as discussed above, partially offset by an increase in gross wholesale revenue due to increased sales to affiliated customers.

126

Table of Contents

Entergy New Orleans, Inc.

Management’s Financial Discussion and Analysis

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges (credits). Following is an analysis of the changes in net revenue comparing the nine months ended September 30, 2011 to the nine months ended September 30, 2010.

		Amount
		(In Millions)

2010 net revenue		$217.2
Retail electric price		(13.7)
Net gas revenue		(5.8)
Gas cost recovery asset		(3.0)
Volume/weather		5.7
Other		(1.2)
2011 net revenue		$199.2

The net gas revenue variance is primarily due to milder weather compared to last year.

The gas cost recovery asset variance is primarily due to the recognition in 2010 of a $3 million gas operations regulatory asset associated with the settlement of Entergy New Orleans’ electric and gas formula rate plan. See Note 2 to the financial statements in the Form 10-K for additional discussion of the formula rate plan settlement.

The volume/weather variance is primarily due to an increase in electricity usage as a result of an increase in customers in the residential and commercial sectors, partially offset by the effect of less favorable weather on residential sales. Billed electricity usage increased 75 GWh compared to the same period in the prior year, an increase of 2%, and total reported customers increased 3% compared to last year.

Gross operating revenues

Gross operating revenues decreased primarily due to:

·	a decrease of $15.0 million in electric fuel cost recovery revenues due to lower fuel rates;

·	a decrease of $13.7 million in gross gas revenues primarily due to lower fuel cost recovery revenues as a result of lower fuel rates and the effect of milder weather; and

·	a formula rate plan decrease effective October 2010, as discussed above.

The decrease was partially offset by an increase in gross wholesale revenue due to increased sales to affiliated customers and more favorable volume/weather, as discussed above.

Other Income Statement Variances

Third Quarter 2011 Compared to Third Quarter 2010

Other operation and maintenance expenses decreased primarily due to the deferral in 2011 of $13.4 million of 2010 Michoud plant maintenance costs pursuant to the settlement of Entergy New Orleans’ 2010 test year formula rate plan filing approved by the City Council in September 2011. See Note 2 to the financial statements for more discussion of the 2010 test year formula rate plan filing and settlement.

127

Table of Contents

Entergy New Orleans, Inc.

Management’s Financial Discussion and Analysis

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Other operation and maintenance expenses decreased primarily due to the deferral in 2011 of $13.4 million of 2010 Michoud plant maintenance costs pursuant to the settlement of Entergy New Orleans’ 2010 test year formula rate plan filing approved by the City Council in September 2011 and a decrease of $12.7 million in fossil expenses due to higher plant outage costs in 2010 due to a greater scope of work at the Michoud plant. See Note 2 to the financial statements for more discussion of the 2010 test year formula rate plan filing and settlement.

Interest expense decreased primarily due to the repayment in May 2010 of the notes payable issued to affiliates as part of Entergy New Orleans’ plan of reorganization and the repayment, at maturity, of $30 million of 4.98% Series first mortgage bonds in July 2010.

Income Taxes

The effective income tax rate was 43.9% for the third quarter 2011 and 40.6% for the nine months ended September 30, 2011. The differences in the effective income tax rates for the third quarter 2011 and the nine months ended September 30, 2011 versus the federal statutory rate of 35% are primarily due to reserves for uncertain tax positions, state income taxes and book and tax differences related to utility plant items, partially offset by flow-through tax accounting.

The effective income tax rate was 34.6% for the third quarter 2010 and 32.2% for the nine months ended September 30, 2010. The difference in the effective income tax rate for the nine months ended September 30, 2010 versus the federal statutory rate of 35% was primarily due to flow-through book and tax timing differences, partially offset by state income taxes and certain book and tax differences related to utility plant items.

Liquidity and Capital Resources

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

		2011	2010
		(In Thousands)

Cash and cash equivalents at beginning of period		$54,986	$191,191

Cash flow provided by (used in):
	Operating activities	60,952	65,362
	Investing activities	(43,019)	(19,138)
	Financing activities	(29,554)	(137,266)
Net decrease in cash and cash equivalents		(11,621)	(91,042)

Cash and cash equivalents at end of period		$43,365	$100,149

Operating Activities

Cash flow provided by operating activities decreased $4.4 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to the receipt of $19.2 million of Community Development Block Grant funds in 2010 related to Hurricane Katrina costs offset by income tax payments of $21.3 million also made in 2010. In the third quarter 2010 the Registrant Subsidiaries made tax payments in accordance with the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement. The payments resulted from the reversal of temporary differences for which the Registrant Subsidiaries previously received cash tax benefits.

128

Table of Contents

Entergy New Orleans, Inc.

Management’s Financial Discussion and Analysis

Investing Activities

Net cash flow used in investing activities increased $23.9 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to money pool activity and a withdrawal in 2010 from the storm escrow account related to Hurricane Gustav costs. The increase was partially offset by a decrease in construction expenditures due to decreased spending on the gas system rebuild project and System Fuels repayment of Entergy New Orleans’s $3.3 million investment in System Fuels.

Increases in Entergy New Orleans’s receivable from the money pool are a use of cash flow, and Entergy New Orleans’s receivable from the money pool increased by $0.3 million for the nine months ended September 30, 2011 compared to decreasing by $31.2 million for the nine months ended September 30, 2010. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

Financing Activities

Net cash flow used in financing activities decreased $107.7 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to the repayment in 2010 of $74.3 million of affiliate notes payable that were issued to affiliates as part of Entergy New Orleans’s plan of reorganization and the repayment, at maturity, of $30 million of 4.98% Series first mortgage bonds in July 2010.

Capital Structure

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

	September 30, 2011	December 31, 2010

Debt to capital	43.2%	44.2%
Effect of subtracting cash	(7.2)%	(9.5)%
Net debt to net capital	36.0%	34.7%

Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable and long-term debt, including the currently maturing portion. Capital consists of debt, preferred stock without sinking fund, and shareholders’ equity. Net capital consists of capital less cash and cash equivalents. Entergy New Orleans 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 New Orleans’s financial condition.

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy New Orleans’s uses and sources of capital. Entergy New Orleans is developing its capital investment plan for 2012 through 2014 and currently anticipates making $204 million in capital investments during that period, including approximately $128 million for maintenance of existing assets. The remaining $76 million is associated with specific investments such as environmental compliance spending, transmission upgrades and system improvements, and other investments, such as potential opportunities through the Utility's supply plan initiatives that support its ability to meet load growth. Following are additional updates to the information provided in the Form 10-K.

Entergy New Orleans’s receivables from the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

$22,110	$21,820	$34,940	$66,149

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

129

Table of Contents

Entergy New Orleans, Inc.

Management’s Financial Discussion and Analysis

Entergy Louisiana’s Ninemile Point Unit 6 Self-Build Project

In June 2011, Entergy Louisiana filed with the LPSC an application seeking certification that the public necessity and convenience would be served by Entergy Louisiana’s construction of a combined-cycle gas turbine generating facility (Ninemile 6) at its existing Ninemile Point electric generating station. Ninemile 6 will be a nominally-sized 550 MW unit that is estimated to cost approximately $721 million to construct, excluding interconnection and transmission upgrades. Entergy Gulf States Louisiana joined in the application, seeking certification of its purchase under a life-of-unit power purchase agreement of up to 35% of the capacity and energy generated by Ninemile 6. The Ninemile 6 capacity and energy is proposed to be allocated 55% to Entergy Louisiana, 25% to Entergy Gulf States Louisiana, and 20% to Entergy New Orleans. Entergy New Orleans has filed a request with the City Council to approve its purchase under a life-of-unit power purchase agreement of this capacity and energy. The City Council has approved a procedural schedule that leads to a decision in the first quarter 2012. If the City Council does not approve this purchase agreement in a timely manner, then an allocation of 65% to Entergy Louisiana and 35% to Entergy Gulf States Louisiana is proposed. If approvals are obtained from the LPSC and other permitting agencies, Ninemile 6 construction is expected to begin in 2012, and the unit is expected to commence commercial operation by mid-2015. The ALJ has established a schedule for the LPSC proceeding that includes February 27 - March 7, 2012 hearing dates.

State and Local Rate Regulation

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Rate, Cost-recovery, and Other Regulation - State and Local Rate Regulation and Fuel-Cost Recovery" in the Form 10-K for a discussion of state and local rate regulation. Following is an update to the discussion in the Form 10-K.

Federal Regulation

Environmental Risks

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks" in the Form 10-K for a discussion of environmental risks.

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 New Orleans’s accounting for unbilled revenue and qualified pension and other postretirement benefits.

130

Table of Contents

ENTERGY NEW ORLEANS, INC.
INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	165,266		$	172,908		$	413,777		$	417,540
Natural gas		16,766			16,691			77,009			90,739
TOTAL		182,032			189,599			490,786			508,279

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		53,013			51,184			133,698			123,142
Purchased power		57,052			59,031			156,433			168,169
Other operation and maintenance		14,722			33,414			70,828			98,595
Taxes other than income taxes		11,564			12,503			32,716			34,574
Depreciation and amortization		8,473			8,795			26,371			26,320
Other regulatory charges (credits) - net		477			(1,585	)		1,434			(253	)
TOTAL		145,301			163,342			421,480			450,547

OPERATING INCOME		36,731			26,257			69,306			57,732

OTHER INCOME
Allowance for equity funds used during construction		147			174			369			535
Interest and investment income		59			160			122			456
Miscellaneous - net		(317	)		(209	)		(848	)		(680	)
TOTAL		(111	)		125			(357	)		311

INTEREST EXPENSE
Interest expense		2,768			2,785			8,321			10,378
Allowance for borrowed funds used during construction		(67	)		(84	)		(167	)		(258	)
TOTAL		2,701			2,701			8,154			10,120

INCOME BEFORE INCOME TAXES		33,919			23,681			60,795			47,923

Income taxes		14,899			8,200			24,684			15,414

NET INCOME		19,020			15,481			36,111			32,509

Preferred dividend requirements and other		241			242			724			724

EARNINGS APPLICABLE TO
COMMON STOCK	$	18,779		$	15,239		$	35,387		$	31,785

See Notes to Financial Statements.

131

Table of Contents

(Page left blank intentionally)

132

Table of Contents

ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)
	2011			2010
	(In Thousands)
OPERATING ACTIVITIES
Net income	$	36,111		$	32,509
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization		26,371			26,320
Deferred income taxes, investment tax credits, and non-current taxes accrued		(9,129	)		(56,664	)
Changes in assets and liabilities:
Receivables		4,013			(3,350	)
Fuel inventory		(1,171	)		(750	)
Accounts payable		(8,504	)		(330	)
Taxes accrued		30,435			50,278
Interest accrued		(773	)		(2,149	)
Deferred fuel costs		(769	)		5,649
Other working capital accounts		(3,822	)		(8,114	)
Provisions for estimated losses		6,571			(6,451	)
Other regulatory assets		(6,769	)		6,474
Pension and other postretirement liabilities		(11,200	)		(7,394	)
Other assets and liabilities		(412	)		29,334
Net cash flow provided by operating activities		60,952			65,362

INVESTING ACTIVITIES
Construction expenditures		(41,607	)		(56,088	)
Allowance for equity funds used during construction		369			535
Change in money pool receivable - net		(290	)		31,209
Investment in affiliates		3,256			-
Changes in other investments - net		(4,747	)		5,091
Other		-			115
Net cash flow used in investing activities		(43,019	)		(19,138	)

FINANCING ACTIVITIES
Retirement of long-term debt		-			(104,993	)
Dividends paid:
Common stock		(27,800	)		(31,200	)
Preferred stock		(724	)		(724	)
Other		(1,030	)		(349	)
Net cash flow used in financing activities		(29,554	)		(137,266	)

Net decrease in cash and cash equivalents		(11,621	)		(91,042	)

Cash and cash equivalents at beginning of period		54,986			191,191

Cash and cash equivalents at end of period	$	43,365		$	100,149

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$	8,343		$	12,020
Income taxes		-		$	21,325

See Notes to Financial Statements.

133

Table of Contents

ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents
Cash	$	1,423		$	1,386
Temporary cash investments		41,942			53,600
Total cash and cash equivalents		43,365			54,986
Accounts receivable:
Customer		40,982			38,160
Allowance for doubtful accounts		(680	)		(734	)
Associated companies		38,642			44,842
Other		1,393			1,824
Accrued unbilled revenues		19,132			19,100
Total accounts receivable		99,469			103,192
Accumulated deferred income taxes		13,039			15,092
Fuel inventory - at average cost		3,817			2,646
Materials and supplies - at average cost		10,110			9,896
Prepayments and other		6,197			5,375
TOTAL		175,997			191,187

OTHER PROPERTY AND INVESTMENTS
Non-utility property at cost (less accumulated depreciation)		1,016			1,016
Storm reserve escrow account		10,700			5,953
TOTAL		11,716			6,969

UTILITY PLANT
Electric		808,221			822,003
Natural gas		210,698			206,148
Construction work in progress		12,047			11,669
TOTAL UTILITY PLANT		1,030,966			1,039,820
Less - accumulated depreciation and amortization		525,225			531,871
UTILITY PLANT - NET		505,741			507,949

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Deferred fuel costs		4,080			4,080
Other regulatory assets		141,950			135,282
Other		5,548			8,081
TOTAL		151,578			147,443

TOTAL ASSETS	$	845,032		$	853,548

See Notes to Financial Statements.

134

Table of Contents

ENTERGY NEW ORLEANS, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

	2011		2010
	(In Thousands)

CURRENT LIABILITIES
Accounts payable:
Associated companies	$	25,620	$	25,140
Other		21,109		30,093
Customer deposits		21,591		21,206
Taxes accrued		30,435		-
Interest accrued		2,055		2,828
Deferred fuel costs		6,158		6,927
System agreement cost equalization		10,889		15,510
Other		4,105		2,655
TOTAL CURRENT LIABILITIES		121,962		104,359

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		172,360		180,290
Accumulated deferred investment tax credits		1,613		1,835
Regulatory liability for income taxes - net		37,998		40,142
Asset retirement cost liabilities		3,411		3,396
Accumulated provisions		17,777		11,206
Pension and other postretirement liabilities		37,615		48,815
Long-term debt		166,599		167,215
Gas system rebuild insurance proceeds		57,132		75,700
Other		9,572		9,184
TOTAL NON-CURRENT LIABILITIES		504,077		537,783


Commitments and Contingencies

Preferred stock without sinking fund		19,780		19,780

COMMON EQUITY
Common stock, $4 par value, authorized 10,000,000
shares; issued and outstanding 8,435,900 shares in 2011
and 2010		33,744		33,744
Paid-in capital		36,294		36,294
Retained earnings		129,175		121,588
TOTAL		199,213		191,626

TOTAL LIABILITIES AND EQUITY	$	845,032	$	853,548

See Notes to Financial Statements.

135

Table of Contents

ENTERGY NEW ORLEANS, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

	Common Equity
	Common Stock		Paid-in Capital		Retained Earnings			Total
Balance at December 31, 2009	$	33,744	$	36,294	$	138,548		$	208,586

Net income		-		-		32,509			32,509
Common stock dividends		-		-		(31,200	)		(31,200	)
Preferred stock dividends		-		-		(724	)		(724	)

Balance at September 30, 2010	$	33,744	$	36,294	$	139,133		$	209,171


Balance at December 31, 2010	$	33,744	$	36,294	$	121,588		$	191,626

Net income		-		-		36,111			36,111
Common stock dividends		-		-		(27,800	)		(27,800	)
Preferred stock dividends		-		-		(724	)		(724	)

Balance at September 30, 2011	$	33,744	$	36,294	$	129,175		$	199,213

See Notes to Financial Statements.

136

Table of Contents

ENTERGY NEW ORLEANS, INC.
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended				Increase/
Description	2011		2010		(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	61	$	71	$	(10	)		(14	)
Commercial		47		55		(8	)		(15	)
Industrial		9		11		(2	)		(18	)
Governmental		18		22		(4	)		(18	)
Total retail		135		159		(24	)		(15	)
Sales for resale:
Associated companies		27		12		15			125
Other		3		2		1			50
Total	$	165	$	173	$	(8	)		(5	)

Billed Electric Energy
Sales (GWh):
Residential		620		608		12			2
Commercial		561		555		6			1
Industrial		140		139		1			1
Governmental		223		231		(8	)		(3	)
Total retail		1,544		1,533		11			1
Sales for resale:
Associated companies		269		184		85			46
Non-associated companies		3		1		2			200
Total		1,816		1,718		98			6


	Nine Months Ended				Increase/
Description		2011		2010	(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	143	$	158	$	(15	)		(9	)
Commercial		121		133		(12	)		(9	)
Industrial		24		27		(3	)		(11	)
Governmental		47		54		(7	)		(13	)
Total retail		335		372		(37	)		(10	)
Sales for resale:
Associated companies		66		34		32			94
Other		13		12		1			8
Total	$	414	$	418	$	(4	)		(1	)

Billed Electric Energy
Sales (GWh):
Residential		1,511		1,473		38			3
Commercial		1,480		1,441		39			3
Industrial		381		380		1			-
Governmental		602		605		(3	)		-
Total retail		3,974		3,899		75			2
Sales for resale:
Associated companies		867		488		379			78
Non-associated companies		14		10		4			40
Total		4,855		4,397		458			10

137

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Third Quarter 2011 Compared to Third Quarter 2010

Net income increased $9.7 million primarily due to higher net revenue, partially offset by higher taxes other than income taxes.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income increased $13.8 million primarily due to higher net revenue, partially offset by higher taxes other than income taxes.

Net Revenue

Third Quarter 2011 Compared to Third Quarter 2010

		Amount
		(In Millions)

2010 net revenue		$162.9
Volume/weather		10.5
Retail electric price		9.6
Net wholesale revenue		3.5
Purchased power capacity		(4.8)
Other		0.1
2011 net revenue		$181.8

The volume/weather variance is primarily due to the effect of more favorable weather on residential and commercial sales compared to the same period last year and an increase in usage in the industrial sector primarily in the chemicals and refining industries.

The retail electric price variance is primarily due to rate actions, including an annual base rate increase of $59 million beginning August 2010, with an additional increase of $9 million beginning May 2011, as a result of the settlement of the December 2009 rate case. See Note 2 to the financial statements in the Form 10-K for further discussion of the rate case settlement.

The net wholesale revenue variance is primarily due to higher revenue in 2011 as a result of sales to Entergy Gulf States Louisiana.

The purchased power capacity variance is primarily due to price increases for ongoing purchased power capacity and additional capacity purchases.

138

Table of Contents

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Gross operating revenues and fuel and purchased power expenses

Gross operating revenues increased primarily due to:

·	an increase of $12.6 million in fuel cost recovery revenues due to interim fuel refunds in 2010, offset by lower fuel rates. The interim fuel refunds and the PUCT approvals are discussed in Note 2 to the financial statements in the Form 10-K;

·	an increase of $10.5 million related to volume/weather as discussed above; and

·	base rate increases effective August 2010 and May 2011, as discussed above.

Fuel and purchased power expenses increased primarily due to an increase in deferred fuel expense due to interim fuel refunds in 2010, as discussed above.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

		Amount
		(In Millions)

2010 net revenue		$423.7
Retail electric price		31.3
Volume/weather		20.4
Purchased power capacity		(18.6)
Net wholesale revenue		(4.1)
Other		(1.6)
2011 net revenue		$451.1

The volume/weather variance is primarily due to an increase of 680 GWh, or 5%, in billed electricity usage, including the effect of more favorable weather on residential and commercial sales compared to last year. Usage in the industrial sector increased primarily in the chemicals and refining industries.

The purchased power capacity variance is primarily due to price increases for ongoing purchased power capacity and additional capacity purchases.

The net wholesale revenue variance is primarily due to a decrease in sales to municipal and co-op customers compared to the same period in 2010.

139

Table of Contents

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Gross operating revenues, fuel and purchased power expenses, and other regulatory charges

Gross operating revenues increased primarily due to:

·	base rate increases effective August 2010 and May 2011, as discussed above; and

·	an increase of $20.4 million related to volume/weather, as discussed above.

The increase was partially offset by a decrease of $12.4 million in fuel cost recovery revenues due to lower fuel rates, offset by lower interim fuel refunds in 2011 versus 2010. The interim fuel refunds and the PUCT approvals are discussed in Note 2 to the financial statements in the Form 10-K.

Fuel and purchased power expenses increased primarily due to an increase in the average market prices of coal and purchased power, coupled with an increase in deferred fuel expense as a result of lower interim fuel refunds in 2011 versus 2010, offset by lower fuel revenues, as discussed above.

Other regulatory charges decreased primarily due to the distribution in the first quarter 2011 of $17.4 million to customers of the 2007 rough production cost equalization remedy receipts. See Note 2 to the financial statements in the Form 10-K for further discussion of the rough production cost equalization proceedings.

Other Income Statement Variances

Third Quarter 2011 Compared to Third Quarter 2010

Other operation and maintenance expenses decreased primarily due to:

·	the amortization of $11 million of rate case expenses in 2010. See Note 2 to the financial statements in the Form 10-K for further discussion of the rate case settlement; and

·	a $2.6 million decrease in compensation and benefits costs, resulting from an increase in the accrual for incentive-based compensation in 2010.

The decrease was partially offset by:

·	an increase of $2.3 million in fossil expenses due to higher plant maintenance costs in 2011;

·	an increase of $2 million in transmission expenses primarily due to higher transmission equalization expenses in 2011;

·	an increase of $1.7 million due to a change in the classification of over-recovery of energy efficiency costs, which has no effect on net income; and

·	several individually insignificant items.

Taxes other than income taxes increased primarily due to a provision recorded for sales and use taxes.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Other operation and maintenance expenses decreased primarily due to:

·	the amortization of $11 million of rate case expenses in 2010. See Note 2 to the financial statements in the Form 10-K for further discussion of the rate case settlement;

·	a decrease of $4.7 million in fossil expenses due to higher plant outage expenses in 2010 due to the larger scope of the outages in 2010; and

·	a $3.1 million decrease in compensation and benefits costs, resulting from an increase in the accrual for incentive-based compensation in 2010.

140

Table of Contents

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

The decrease was partially offset by:

·	an increase of $4 million due to a change in the classification of over-recovery of energy efficiency costs, which has no effect on net income;

·	an increase of $3.6 million in transmission expenses primarily due to higher transmission equalization expenses in 2011; and

·	several individually insignificant items.

Taxes other than income taxes increased primarily due to a provision recorded for sales and use taxes.

Income Taxes

The effective income tax rate was 36.6% for the third quarter 2011 and 37.3% for the nine months ended September 30, 2011. The differences in the effective income tax rate for the third quarter 2011 and for the nine months ended September 30, 2011 versus the federal statutory rate of 35% are primarily due to book and tax differences related to utility plant items and state income taxes, partially offset by the amortization of investment tax credits and book and tax differences related to allowance for equity funds used during construction.

The effective income tax rate was 38.5% for the third quarter 2010 and 39.3% for the nine months ended September 30, 2010. The difference in the effective income tax rate for the third quarter 2010 versus the federal statutory rate of 35% was primarily due to certain book and tax differences related to utility plant items. The difference in the effective income tax rate for the nine months ended September 30, 2010 versus the federal statutory rate of 35% was primarily due to certain book and tax differences related to utility plant items and state income taxes, partially offset by book and tax differences related to allowance for equity funds used during construction and the amortization of investment tax credits.

Liquidity and Capital Resources

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

		2011	2010
		(In Thousands)

Cash and cash equivalents at beginning of period		$35,342	$200,703

Cash flow provided by (used in):
	Operating activities	105,955	(326)
	Investing activities	(120,682)	(76,769)
	Financing activities	20,631	(77,933)
Net increase (decrease) in cash and cash equivalents		5,904	(155,028)

Cash and cash equivalents at end of period		$41,246	$45,675

Operating Activities

Entergy Texas’ operating activities provided $106 million in cash for the nine months ended September 30, 2011 compared to using $0.3 million in cash for the nine months ended September 30, 2010 primarily due to $73.4 million of fuel cost refunds for the nine months ended September 30, 2011 versus $145.8 million of fuel cost refunds for the nine months ended September 30, 2010. See Note 2 to the financial statements herein for discussion of the 2011 fuel cost refund and see Note 2 in the Form 10-K for discussion of the 2010 fuel cost refund.

141

Table of Contents

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Investing Activities

Net cash flow used in investing activities increased $43.9 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to money pool activity, partially offset by the timing of remittances to and payments from the transition charge account as a result of the issuance of $546 million in securitization bonds in November 2009. See Note 5 to the financial statements in the Form 10-K for further discussion of the issuance of the securitization bonds.

Increases in Entergy Texas’s receivable from the money pool are a use of cash flow, and Entergy Texas’s receivable from the money pool increased by $7.3 million for the nine months ended September 30, 2011 compared to decreasing by $53.3 million for the nine months ended September 30, 2010. The money pool is an inter-company borrowing arrangement designed to reduce Entergy’s subsidiaries’ need for external short-term borrowings.

Financing Activities

Entergy Texas’ financing activities provided $20.6 million in cash flow for the nine months ended September 30, 2011 compared to using $77.9 million in cash flow for the nine months ended September 30, 2010 primarily due to:

·	the retirement of $190 million of debt assumption liabilities and securitization bonds in 2010 compared to the retirement of $47.9 million of securitization bonds in 2011; and

·	a decrease of $80.6 million in common equity distributions.

This decrease was partially offset by the issuance of $200 million of 3.60% Series mortgage bonds in May 2010 compared to the issuance of $75 million of 4.10% Series first mortgage bonds in September 2011.

Capital Structure

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

	September 30, 2011	December 31, 2010

Debt to capital	65.3%	66.8%
Effect of excluding the securitization bonds	(14.5)%	(16.0)%
Debt to capital, excluding securitization bonds (1)	50.8%	50.8%
Effect of subtracting cash	(1.1)%	(1.0)%
Net debt to net capital, excluding securitization bonds (1)	49.7%	49.8%

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

Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable and long-term debt, including the currently maturing portion and the debt assumption liability. Capital consists of debt and shareholder’s equity. Net capital consists of capital less cash and cash equivalents. Entergy Texas uses the net debt to net capital ratio and the ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy Texas’s financial condition.

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of Entergy Texas’s uses and sources of capital. Entergy Texas is developing its capital investment plan for 2012 through 2014 and currently anticipates making $664 million in capital investments during that period, including approximately $388 million for maintenance of existing assets. The remaining $276 million is associated with specific investments such as environmental compliance spending, plant upgrades, transmission upgrades and system improvements, and other investments such as potential opportunities through the Utility's supply plan initiatives that support its ability to meet load growth. Following are updates to the information provided in the Form 10-K.

142

Table of Contents

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Texas’s receivables from the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

$20,942	$13,672	$16,022	$69,317

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

As discussed in the Form 10-K, Entergy Texas has a credit facility in the amount of $100 million scheduled to expire in August 2012. No borrowings were outstanding under the facility as of September 30, 2011.

In September 2011, Entergy Texas issued $75 million of 4.10% Series first mortgage bonds due September 2021.

State and Local Rate Regulation

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - State and Local Rate Regulation" in the Form 10-K for a discussion of state and local rate regulation.

Federal Regulation

Environmental Risks

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks" in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates" in the Form 10-K for a discussion of the unbilled revenue and qualified pension and other postretirement benefits.

143

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	556,955		$	514,786		$	1,350,262		$	1,322,145

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		127,745			103,386			247,568			238,842
Purchased power		222,283			229,229			613,794			610,805
Other operation and maintenance		52,455			57,747			149,373			153,070
Taxes other than income taxes		22,680			15,141			52,567			45,900
Depreciation and amortization		19,823			17,480			59,059			56,488
Other regulatory charges - net		25,159			19,307			37,816			48,846
TOTAL		470,145			442,290			1,160,177			1,153,951

OPERATING INCOME		86,810			72,496			190,085			168,194

OTHER INCOME
Allowance for equity funds used during construction		946			887			2,493			5,025
Interest and investment income		1,374			2,179			4,112			5,815
Miscellaneous - net		(730	)		(3,672	)		(1,700	)		(2,523	)
TOTAL		1,590			(606	)		4,905			8,317

INTEREST EXPENSE
Interest expense		24,616			21,923			69,657			71,125
Allowance for borrowed funds used during construction		(653	)		(632	)		(1,721	)		(3,143	)
TOTAL		23,963			21,291			67,936			67,982

INCOME BEFORE INCOME TAXES		64,437			50,599			127,054			108,529

Income taxes		23,562			19,467			47,356			42,646

NET INCOME	$	40,875		$	31,132		$	79,698		$	65,883

See Notes to Financial Statements.

144

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	2011			2010
	(In Thousands)

OPERATING ACTIVITIES
Net income	$	79,698		$	65,883
Adjustments to reconcile net income to net cash flow provided by (used in) operating activities:
Depreciation, amortization, and decommissioning		59,059			56,488
Deferred income taxes, investment tax credits, and non-current taxes accrued		51,650			60,787
Changes in assets and liabilities:
Receivables		(123,024	)		(80,774	)
Fuel inventory		4,694			1,475
Accounts payable		20,369			42,552
Taxes accrued		(2,408	)		(11,120	)
Interest accrued		(8,542	)		(4,220	)
Deferred fuel costs		(51,985	)		(52,115	)
Other working capital accounts		51,410			(116,661	)
Provisions for estimated losses		(113	)		(2,507	)
Other regulatory assets		55,428			64,672
Pension and other postretirement liabilities		(18,260	)		(13,043	)
Other assets and liabilities		(12,021	)		(11,743	)
Net cash flow provided by (used in) operating activities		105,955			(326	)

INVESTING ACTIVITIES
Construction expenditures		(120,992	)		(119,518	)
Allowance for equity funds used during construction		2,493			5,025
Insurance proceeds		-			5,293
Change in money pool receivable - net		(7,270	)		53,295
Increase in other investments		-			2,318
Remittances to transition charge account		(69,607	)		(68,095	)
Payments from transition charge account		74,694			44,913
Net cash flow used in investing activities		(120,682	)		(76,769	)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		74,264			198,489
Retirement of long-term debt		(47,853	)		(190,022	)
Dividends paid:
Common stock		(5,780	)		(86,400	)
Net cash flow provided by (used in) financing activities		20,631			(77,933	)

Net increase (decrease) in cash and cash equivalents		5,904			(155,028	)

Cash and cash equivalents at beginning of period		35,342			200,703

Cash and cash equivalents at end of period	$	41,246		$	45,675

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$	74,937		$	72,170
Income taxes	$	-		$	5,124

See Notes to Financial Statements.

145

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011			2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	1,482		$	1,719
Temporary cash investments		39,764			33,623
Total cash and cash equivalents		41,246			35,342
Securitization recovery trust account		35,545			40,632
Accounts receivable:
Customer		99,353			56,358
Allowance for doubtful accounts		(1,892	)		(2,185	)
Associated companies		134,732			53,128
Other		10,892			11,605
Accrued unbilled revenues		45,586			39,471
Total accounts receivable		288,671			158,377
Accumulated deferred income taxes		38,683			44,752
Fuel inventory - at average cost		49,178			53,872
Materials and supplies - at average cost		29,934			28,842
Prepayments and other		17,134			14,856
TOTAL		500,391			376,673

OTHER PROPERTY AND INVESTMENTS
Investments in affiliates - at equity		800			812
Non-utility property - at cost (less accumulated depreciation)		1,004			1,223
Other		17,833			17,037
TOTAL		19,637			19,072

UTILITY PLANT
Electric		3,281,872			3,205,566
Construction work in progress		100,739			80,096
TOTAL UTILITY PLANT		3,382,611			3,285,662
Less - accumulated depreciation and amortization		1,275,905			1,245,729
UTILITY PLANT - NET		2,106,706			2,039,933

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		132,003			127,046
Other regulatory assets (includes securitization property of $717,149 as of September 30, 2011 and $763,841 as of December 31, 2010)		1,102,593			1,168,960
Long-term receivables - associated companies		31,522			32,596
Other		20,405			19,584
TOTAL		1,286,523			1,348,186

TOTAL ASSETS	$	3,913,257		$	3,783,864

See Notes to Financial Statements.

146

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

	2011		2010
	(In Thousands)

CURRENT LIABILITIES
Accounts payable:
Associated companies	$	87,470	$	69,862
Other		72,112		70,325
Customer deposits		37,750		38,376
Taxes accrued		26,143		28,551
Interest accrued		25,135		33,677
Deferred fuel costs		25,445		77,430
Pension and other postretirement liabilities		1,118		1,354
System agreement cost equalization		54,025		-
Other		5,603		4,222
TOTAL		334,801		323,797

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		882,885		829,668
Accumulated deferred investment tax credits		19,738		20,936
Other regulatory liabilities		13,631		26,178
Asset retirement cost liabilities		3,814		3,651
Accumulated provisions		5,207		5,320
Pension and other postretirement liabilities		54,700		72,724
Long-term debt (includes securitization bonds of $759,233 as of September 30, 2011 and $807,066 as of December 31, 2010)		1,686,582		1,659,230
Other		13,691		18,070
TOTAL		2,680,248		2,635,777

Commitments and Contingencies

COMMON EQUITY
Common stock, no par value, authorized 200,000,000 shares;
issued and outstanding 46,525,000 shares in 2011 and 2010		49,452		49,452
Paid-in capital		481,994		481,994
Retained earnings		366,762		292,844
TOTAL		898,208		824,290

TOTAL LIABILITIES AND EQUITY	$	3,913,257	$	3,783,864

See Notes to Financial Statements.

147

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN COMMON EQUITY
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

	Common Equity
	Common Stock		Paid-in Capital		Retained Earnings			Total
Balance at December 31, 2009	$	49,452	$	481,994	$	313,044		$	844,490

Net income		-		-		65,883			65,883
Common stock dividends		-		-		(86,400	)		(86,400	)

Balance at September 30, 2010	$	49,452	$	481,994	$	292,527		$	823,973


Balance at December 31, 2010	$	49,452	$	481,994	$	292,844		$	824,290

Net income		-		-		79,698			79,698
Common stock dividends		-		-		(5,780	)		(5,780	)

Balance at September 30, 2011	$	49,452	$	481,994	$	366,762		$	898,208

See Notes to Financial Statements.

148

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)


	Three Months Ended				Increase/
Description	2011		2010		(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	233	$	195	$	38			19
Commercial		114		94		20			21
Industrial		102		63		39			62
Governmental		7		6		1			17
Total retail		456		358		98			27
Sales for resale:
Associated companies		76		128		(52	)		(41	)
Non-associated companies		23		25		(2	)		(8	)
Other		2		4		(2	)		(50	)
Total	$	557	$	515	$	42			8

Billed Electric Energy
Sales (GWh):
Residential		2,076		1,955		121			6
Commercial		1,318		1,284		34			3
Industrial		1,635		1,494		141			9
Governmental		80		73		7			10
Total retail		5,109		4,806		303			6
Sales for resale:
Associated companies		1,238		1,253		(15	)		(1	)
Non-associated companies		370		385		(15	)		(4	)
Total		6,717		6,444		273			4


	Nine Months Ended				Increase/
Description		2011		2010	(Decrease)			%
	(Dollars In Millions)
Electric Operating Revenues:
Residential	$	501	$	433	$	68			16
Commercial		276		245		31			13
Industrial		261		212		49			23
Governmental		18		17		1			6
Total retail		1,056		907		149			16
Sales for resale:
Associated companies		205		318		(113	)		(36	)
Non-associated companies		59		64		(5	)		(8	)
Other		30		33		(3	)		(9	)
Total	$	1,350	$	1,322	$	28			2

Billed Electric Energy
Sales (GWh):
Residential		4,790		4,706		84			2
Commercial		3,392		3,313		79			2
Industrial		4,696		4,199		497			12
Governmental		222		202		20			10
Total retail		13,100		12,420		680			5
Sales for resale:
Associated companies		3,227		2,904		323			11
Non-associated companies		971		1,079		(108	)		(10	)
Total		17,298		16,403		895			5

149

Table of Contents

SYSTEM ENERGY RESOURCES, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

System Energy’s principal asset consists of a 78.5% ownership interest and 11.5% leasehold interest in Grand Gulf. The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement. Payments under the Unit Power Sales Agreement are System Energy’s only source of operating revenues.

Third Quarter 2011 Compared to Third Quarter 2010

Net income decreased $8 million primarily due to a decrease in rate base that contributed to lower operating income and a higher effective income tax rate, partially offset by higher other income.

Nine Months Ended September 30, 2011 Compared to Nine Months Ended September 30, 2010

Net income decreased $7.8 million primarily due to a decrease in rate base that contributed to lower operating income and a higher effective income tax rate, partially offset by higher other income.

Liquidity and Capital Resources

Cash Flow

Cash flows for the nine months ended September 30, 2011 and 2010 were as follows:

		2011	2010
		(In Thousands)

Cash and cash equivalents at beginning of period		$263,772	$264,482

Cash flow provided by (used in):
	Operating activities	233,804	190,759
	Investing activities	(177,322)	(135,115)
	Financing activities	(142,564)	(41,450)
Net increase (decrease) in cash and cash equivalents		(86,082)	14,194

Cash and cash equivalents at end of period		$177,690	$278,676

Operating Activities

Net cash provided by operating activities increased $43 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to income tax payments of $26.6 million in 2010 and a Grand Gulf refueling outage in 2010 with no refueling outage occurring in 2011. The increase was partially offset by an increase of $12.1 million in pension contributions. In the third quarter 2010 the Registrant Subsidiaries made tax payments in accordance with the Entergy Corporation and Subsidiary Companies Intercompany Income Tax Allocation Agreement. The payments resulted from the reversal of temporary differences for which the Registrant Subsidiaries previously received cash tax benefits. See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits.

150

Table of Contents

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

Investing Activities

Net cash used in investment activities increased $42.2 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to:

·	the proceeds from the transfer, in the first quarter 2010, of $100.3 million in development costs related to Entergy New Nuclear Development, LLC, as discussed in the Form 10-K;

·	an increase in construction expenditures resulting from a $65.5 million power uprate project at Grand Gulf; and

·	the repayment in 2010 of $25.6 million by Entergy New Orleans of a note issued in resolution of its bankruptcy proceedings.

The increase was partially offset by a decrease in nuclear fuel purchases due to the timing of refueling outages.

Decreases in System Energy’s receivable from the money pool are a source of cash flow, and System Energy’s receivable from the money pool decreased $24.4 million in the nine months ended September 30, 2011 compared to increasing $4 million in the nine months ended September 30, 2010. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

Financing Activities

Net cash used in financing activities increased $101.1 million for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010 primarily due to the repayment of $38.3 million in commercial paper in the nine months ended September 30, 2011 as compared to the issuance of $37.8 million in commercial paper and $60 million of 5.33% Series G notes by the nuclear fuel company variable interest entity in the same period in 2010. See Note 4 to the financial statements herein and in the Form 10-K for a discussion of this activity. The increase was partially offset by a decrease of $32.2 million in dividend payments on common stock.

Capital Structure

System Energy’s capitalization is balanced between equity and debt, as shown in the following table.

	September 30, 2011	December 31, 2010

Debt to capital	49.4%	51.7%
Effect of subtracting cash	(6.3)%	(9.0)%
Net debt to net capital	43.1%	42.7%

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 and common shareholder’s equity. Net capital consists of capital less cash and cash equivalents. System Energy 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 System Energy’s financial condition.

Uses and Sources of Capital

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources" in the Form 10-K for a discussion of System Energy’s uses and sources of capital. Following are updates to the information provided in the Form 10-K.

151

Table of Contents

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

uprate project is approximately $734 million, including SMEPA’s share. As in the original estimate, this estimate includes spending on certain major equipment refurbishment and replacement that would have been required over the normal course of the plant’s life even if the uprate were not done. The purpose of performing this major equipment refurbishment and replacement in connection with the uprate is to avoid additional plant outages and construction costs in the future while improving plant reliability. The investment estimate may be revised in the future as System Energy evaluates the progress of the project.

System Energy is developing its capital investment plan for 2012 through 2014 and currently anticipates making $377 million in capital investments during that period, including approximately $55 million for maintenance of existing assets. The remaining $322 million is associated with specific investments, primarily the spending to be made in the course of the implementation of the Grand Gulf uprate project.

System Energy’s receivables from the money pool were as follows:

September 30, 2011	December 31, 2010	September 30, 2010	December 31, 2009
(In Thousands)

$73,570	$97,948	$94,476	$90,507

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

Nuclear Matters

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Nuclear Matters" in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Environmental Risks" in the Form 10-K for a discussion of environmental risks.

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 System Energy’s accounting for nuclear decommissioning costs and qualified pension and other postretirement benefits. The following is an update to that discussion.

Nuclear Decommissioning Costs

152

Table of Contents

SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	Three Months Ended						Nine Months Ended
	2011			2010			2011			2010
	(In Thousands)						(In Thousands)

OPERATING REVENUES
Electric	$	152,431		$	151,781		$	409,946		$	404,783

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale		19,698			21,387			58,873			49,012
Nuclear refueling outage expenses		4,115			4,069			12,204			13,287
Other operation and maintenance		36,493			31,941			100,336			92,231
Decommissioning		7,752			7,912			23,568			23,318
Taxes other than income taxes		5,312			5,600			16,525			17,689
Depreciation and amortization		42,362			41,027			96,608			94,328
Other regulatory credits - net		(1,821	)		(2,188	)		(7,071	)		(7,803	)
TOTAL		113,911			109,748			301,043			282,062

OPERATING INCOME		38,520			42,033			108,903			122,721

OTHER INCOME
Allowance for equity funds used during construction		5,912			2,630			15,433			6,862
Interest and investment income		3,054			4,003			8,103			10,625
Miscellaneous - net		(253	)		(104	)		(502	)		(333	)
TOTAL		8,713			6,529			23,034			17,154

INTEREST EXPENSE
Interest expense		14,548			14,457			33,673			37,177
Allowance for borrowed funds used during construction		(1,800	)		(910	)		(4,716	)		(2,375	)
TOTAL		12,748			13,547			28,957			34,802

INCOME BEFORE INCOME TAXES		34,485			35,015			102,980			105,073

Income taxes		20,222			12,716			47,395			41,719

NET INCOME	$	14,263		$	22,299		$	55,585		$	63,354

See Notes to Financial Statements.

153

Table of Contents

(Page left blank intentionally)

154

Table of Contents

SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited)

	2011			2010
	(In Thousands)
OPERATING ACTIVITIES
Net income	$	55,585		$	63,354
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization		162,492			152,269
Deferred income taxes, investment tax credits, and non-current taxes accrued		(53,032	)		(69,029	)
Changes in assets and liabilities:
Receivables		(2,916	)		(5,668	)
Accounts payable		1,449			(7,970	)
Prepaid taxes and taxes accrued		94,285			77,667
Interest accrued		(35,671	)		(17,978	)
Other working capital accounts		6,928			(19,727	)
Provisions for estimated losses		-			(2,009	)
Other regulatory assets		53,727			38,221
Pension and other postretirement liabilities		(23,598	)		(11,594	)
Other assets and liabilities		(25,445	)		(6,777	)
Net cash flow provided by operating activities		233,804			190,759

INVESTING ACTIVITIES
Construction expenditures		(164,013	)		(113,771	)
Proceeds from the transfer of development costs		-			100,280
Allowance for equity funds used during construction		15,433			6,862
Nuclear fuel purchases		(41,717	)		(129,504	)
Proceeds from the sale of nuclear fuel		12,420			-
Proceeds from nuclear decommissioning trust fund sales		166,890			236,685
Investment in nuclear decommissioning trust funds		(190,713	)		(257,258	)
Changes in money pool receivable - net		24,378			(3,969	)
Changes in other investments		-			25,560
Net cash flow used in investing activities		(177,322	)		(135,115	)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt		-			56,688
Retirement of long-term debt		(38,161	)		(41,715	)
Changes in credit borrowings - net		(38,264	)		37,777
Dividends paid:
Common stock		(62,000	)		(94,200	)
Other		(4,139	)		-
Net cash flow used in financing activities		(142,564	)		(41,450	)

Net increase (decrease) in cash and cash equivalents		(86,082	)		14,194

Cash and cash equivalents at beginning of period		263,772			264,482

Cash and cash equivalents at end of period	$	177,690		$	278,676

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$	28,409		$	23,987
Income taxes	$	-		$	26,617

See Notes to Financial Statements.

155

Table of Contents

SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
September 30, 2011 and December 31, 2010
(Unaudited)

	2011		2010
	(In Thousands)

CURRENT ASSETS
Cash and cash equivalents:
Cash	$	15,350	$	903
Temporary cash investments		162,340		262,869
Total cash and cash equivalents		177,690		263,772
Accounts receivable:
Associated companies		125,420		147,180
Other		5,368		5,070
Total accounts receivable		130,788		152,250
Materials and supplies - at average cost		87,370		84,077
Deferred nuclear refueling outage costs		10,901		22,627
Prepaid taxes		-		68,039
Prepayments and other		2,908		1,142
TOTAL		409,657		591,907

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds		393,170		387,876
TOTAL		393,170		387,876

UTILITY PLANT
Electric		3,395,162		3,362,422
Property under capital lease		480,899		489,175
Construction work in progress		331,611		210,536
Nuclear fuel		135,611		155,282
TOTAL UTILITY PLANT		4,343,283		4,217,415
Less - accumulated depreciation and amortization		2,490,351		2,417,811
UTILITY PLANT - NET		1,852,932		1,799,604

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Regulatory asset for income taxes - net		127,525		126,642
Other regulatory assets		242,124		296,715
Other		21,379		21,326
TOTAL		391,028		444,683

TOTAL ASSETS	$	3,046,787	$	3,224,070

See Notes to Financial Statements.

156

Table of Contents

SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
September 30, 2011 and December 31, 2010
(Unaudited)

	2011		2010
	(In Thousands)

CURRENT LIABILITIES
Currently maturing long-term debt	$	40,163	$	33,740
Short-term borrowings		-		38,264
Accounts payable:
Associated companies		4,851		6,520
Other		40,454		38,447
Taxes accrued		26,246		-
Accumulated deferred income taxes		3,376		8,508
Interest accrued		20,410		56,081
Other		2,519		2,258
TOTAL		138,019		183,818

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued		595,226		617,012
Accumulated deferred investment tax credits		52,148		54,755
Other regulatory liabilities		189,449		201,364
Decommissioning		437,460		452,782
Pension and other postretirement liabilities		81,647		105,245
Long-term debt		746,866		796,728
Other		21		-
TOTAL		2,102,817		2,227,886

Commitments and Contingencies

COMMON EQUITY
Common stock, no par value, authorized 1,000,000 shares;
issued and outstanding 789,350 shares in 2011 and 2010		789,350		789,350
Retained earnings		16,601		23,016
TOTAL		805,951		812,366

TOTAL LIABILITIES AND EQUITY	$	3,046,787	$	3,224,070

See Notes to Financial Statements.

157

Table of Contents

SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Nine Months Ended September 30, 2011 and 2010
(Unaudited) (In Thousands)

	Common Equity
	Common Stock		Retained Earnings			Total
Balance at December 31, 2009	$	789,350	$	40,592		$	829,942

Net income		-		63,354			63,354
Common stock dividends		-		(94,200	)		(94,200	)

Balance at September 30, 2010	$	789,350	$	9,746		$	799,096


Balance at December 31, 2010	$	789,350	$	23,016		$	812,366

Net income		-		55,585			55,585
Common stock dividends		-		(62,000	)		(62,000	)

Balance at September 30, 2011	$	789,350	$	16,601		$	805,951

See Notes to Financial Statements.

158

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See "PART I, Item 1, Litigation" in the Form 10-K for a discussion of legal, administrative, and other regulatory proceedings affecting Entergy. Following is an update to that discussion. Also see "Item 5, Other Information, Environmental Regulation", below, for updates regarding environmental proceedings and regulation and Note 11 to the financial statements for a description of a legal proceeding involving Vermont Yankee.

Texas Power Price Lawsuit

See the Form 10-K for a discussion of the lawsuit filed in August 2003 in the district court of Chambers County, Texas by Texas residents on behalf of a purported class apparently of the Texas retail customers of Entergy Gulf States, Inc. who were billed and paid for electric power from January 1, 1994 to the present. The case is pending in state district court, and a class certification hearing was held in August 2011. The decision of the court on class certification is pending.

Item 1A. Risk Factors

There have been no material changes to the risk factors discussed in "PART I, Item 1A, Risk Factors" in the Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities (1)

Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of a Publicly Announced Plan	Maximum $ Amount of Shares that May Yet be Purchased Under a Plan (2)

7/01/2011-7/31/2011	60,000	$67.79	60,000	$421,016,066
8/01/2011-8/31/2011	-	$-	-	$421,016,066
9/01/2011-9/30/2011	1,078,000	$65.83	1,078,000	$350,052,918
Total	1,138,000	$65.93	1,138,000

(1)

In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options to key employees, which may be exercised to obtain shares of Entergy’s common stock. According to the plans, these shares can be newly issued shares, treasury stock, or shares purchased on the open market. Entergy’s management has been authorized by the Board to repurchase on the open market shares up to an amount sufficient to fund the exercise of grants under the plans. See Note 12 to the financial statements in the Form 10-K for additional discussion of the stock-based compensation plans. In addition to this authority, in October 2010 the Board granted authority for an additional $500 million share repurchase program. The amount of share repurchases under these programs may vary as a result of material changes in business results or capital spending or new investment opportunities.

(2)

Maximum amount of shares that may yet be repurchased does not include an estimate of the amount of shares that may be purchased to fund the exercise of grants under the stock-based compensation plans.

159

Table of Contents

Item 5. Other Information

Environmental Regulation

Following are updates to the Environmental Regulation section of Part I, Item 1 of the Form 10-K.

Clean Air Act and Subsequent Amendments

New Source Review (NSR)

As discussed in the Form 10-K, in September 2010 the owner of a minority interest in Entergy’s White Bluff and Independence facilities, both located in Arkansas, received a request from the EPA for several categories of information concerning capital and maintenance projects at the facilities in order to determine compliance with the Clean Air Act. The EPA request for information does not allege that either facility violated the law. In February 2011, Entergy received a similar request from the EPA and has responded to it. In August 2011, Entergy’s Nelson facility, located in Louisiana, received a similar request for information from the EPA. Entergy is preparing its response to the request.

Ozone Nonattainment

Entergy Texas operates two fossil-fueled generating units in a geographic area that is not in attainment of the currently-enforced national ambient air quality standards for ozone. The nonattainment area that affects Entergy Texas is the Houston-Galveston-Brazoria area. Areas in nonattainment are classified as "marginal," "moderate," "serious," or "severe." When an area fails to meet the ambient air standard, the EPA requires state regulatory authorities to prepare state implementation plans meant to cause progress toward bringing the area into attainment with applicable standards.

The Houston-Galveston-Brazoria area was originally classified as "moderate" nonattainment under the 8-hour standard with an attainment date of June 15, 2010. On June 15, 2007, the Texas governor petitioned the EPA to reclassify Houston-Galveston-Brazoria from "moderate" to "severe." On October 1, 2008, the EPA granted the request by the Texas governor to voluntarily reclassify the Houston-Galveston-Brazoria area from a "moderate" 8-hour ozone nonattainment area to a "severe" 8-hour ozone nonattainment area. The EPA also set April 15, 2010, as the date for the State of Texas to submit a revised state implementation plan (SIP) addressing the "severe" ozone nonattainment area requirements of the Clean Air Act. In March 2010 the Texas commission adopted the Houston-Galveston-Brazoria Attainment Demonstration SIP Revision and the Houston-Galveston-Brazoria Reasonable Further Progress SIP Revision for the 1997 eight-hour ozone standard and associated rules. EPA approval is pending. The area's new attainment date for the 8-hour ozone standard is as expeditiously as practicable, but no later than June 15, 2019.

In December 2006, the EPA's revocation of the 1-hour ozone standard was rejected in a judicial proceeding. As a result, numerous requirements can return for areas that fail to meet 1-hour ozone levels by dates set by the law. These requirements include the potential to increase fees significantly for plants operating in these areas. In addition, it is possible that new emission controls may be required. Specific costs of compliance cannot be estimated at this time, but Entergy is monitoring development of the respective state implementation plans and will develop specific compliance strategies as the plans move through the adoption process. The Houston-Galveston-Brazoria area is classified as “severe” nonattainment for 1-hour ozone.

In March 2008, the EPA revised the National Ambient Air Quality Standard for ozone, creating the potential for additional counties and parishes in which Entergy operates to be placed in nonattainment status. The LDEQ recommended that eleven parishes be designated as nonattainment for the 75 parts per billion ozone standard. Entergy Gulf States Louisiana owns and operates two fossil plants and Entergy Louisiana owns and operates one fossil plant affected by this recommendation. In Arkansas, the governor recommended that Pulaski County be designated in nonattainment with the new ozone standard, where two of Entergy Arkansas’s smaller facilities are located. These initial recommendations were not approved by the EPA, however, due to various procedural delays. In September 2011, the EPA announced that it will begin implementing the 2008 ozone standards by requiring that

160

Table of Contents

states resubmit recommendations for nonattainment status. In Entergy’s utility service area, EPA predicts that the Houston-Galveston-Brazoria, Texas; Baton Rouge, Louisiana; and Memphis, Tennessee/Arkansas areas will be in non-attainment. Nonattainment designations are expected to be final in mid-2012.

Following nonattainment designation, states will be required to develop state implementation plans that outline control requirements that will enable the affected counties and parishes to reach attainment status. Entergy facilities in these areas may be subject to installation of NOx controls, but the degree of control will remain unknown until the state implementation plans are developed. Entergy will continue to monitor and engage in the state implementation plan development process in Entergy states.

Hazardous Air Pollutants

The EPA is developing a Maximum Achievable Control Technology retrofit standard for new and existing coal and oil-fired units. In 2009 the EPA issued an Information Collection Request to gather data needed for promulgation of Hazardous Air Pollutant regulations. In May 2011 the EPA published the proposed rule to regulate Hazardous Air Pollutants for Electric Generating Utilities, and the final rule is expected in November 2011. Entergy is reviewing the proposal and remains involved in the current rulemaking process.

Interstate Air Transport

In March 2005, the EPA finalized the Clean Air Interstate Rule (CAIR), which was intended to reduce SO2 and NOx emissions from electric generation plants in order to improve air quality in twenty-nine eastern states. The rule required a combination of investment of capital to install pollution control equipment and increased operating costs through the purchase of emission allowances. Entergy began implementation in 2007, including installation of controls at several facilities and the development of an emission allowance procurement strategy.

Based on several court challenges, the CAIR was vacated and remanded to the EPA by the D.C. Circuit in 2008. The court allowed the CAIR to become effective in January 2009, while the EPA revised the rule. The EPA released the proposed Transport Rule to replace the CAIR in July 2010. On July 7, 2011, the EPA released its final Cross-State Air Pollution Rule (CSAPR, which previously was referred to as the Transport Rule). The rule is directed at limiting the interstate transport of emissions of NOx and SO2 as precursors to ozone and fine particulate matter. The final rule provides a significantly lower number of allowances to Entergy’s Utility states than did the draft rule. Entergy’s capital investment and annual allowance purchase costs under the CSAPR will depend on the economic assessment of NOx and SO2 allowance markets, the cost of control technologies, generation unit utilization, and the availability and cost of purchased power.

On October 6, 2011, the EPA released a proposed rule increasing the emission allocation budgets for some states and moving the limited trading period back to 2014. This proposal increased the Louisiana NOx allocation budget by 31% and the Mississippi NOx allocation budget by 21%. Entergy continues to review the implications of the July 2011 final rule and the October 2011 proposed rule. While its review is underway, Entergy filed a petition for review with the D.C. Circuit and a petition with the EPA for reconsideration of the rule and stay of its effectiveness. Several other parties have filed similar petitions.

Regional Haze

In June 2005, the EPA issued final Best Available Retrofit Control Technology (BART) regulations that could potentially result in a requirement to install SO2 and NOx pollution control technology on certain of Entergy’s coal and oil generation units. The rule leaves certain BART determinations to the states. The Arkansas Department of Environmental Quality (ADEQ) prepared a State Implementation Plan (SIP) for Arkansas facilities to implement its obligations under the Clean Air Visibility Rule. The ADEQ determined that Entergy Arkansas’s White Bluff power plant affects a Class I Area’s visibility and will be subject to the EPA’s presumptive BART requirements to install scrubbers and low NOx burners. Under then current regulations, the scrubbers would have had to be operational by October 2013. Entergy filed a petition in December 2009 with the Arkansas Pollution Control and Ecology Commission requesting a variance from this deadline, however, because the EPA has not approved Arkansas’s Regional Haze SIP and the EPA has expressed concerns about Arkansas’s Regional Haze SIP and questioned the appropriateness of issuing an air permit prior to that approval. Entergy Arkansas’s petition requested that, consistent with federal law, the compliance deadline be changed to as expeditiously as practicable, but in no event later than

161

Table of Contents

five years after EPA approval of the Arkansas Regional Haze SIP. The Arkansas Pollution Control and Ecology Commission approved the variance in March 2010. In October 2011 the EPA released a proposed rule addressing the Arkansas Regional Haze SIP. In the proposal the EPA disapproves a large portion of the Arkansas Regional Haze SIP including the emission limits for NOx and SO2 at White Bluff. The EPA did not issue a Federal Implementation Plan for regional haze requirements because Arkansas has indicated it wishes to correct its SIP and resubmit it. After the EPA’s proposed rule becomes final there will be a two-year timeframe in which the EPA must approve a SIP issued by Arkansas or issue a Federal Implementation Plan.

Nelson Unit 6 (Entergy Gulf States Louisiana)

Entergy Gulf States Louisiana self-reported to the Louisiana Department of Environmental Quality (LDEQ) potential exceedances of annual carbon monoxide emission limits at the Nelson Unit 6 coal-fired facility for the years 2006-2010 and the failure to report these potential exceedances in semi-annual reporting and in annual Title V compliance certifications. Entergy Gulf States Louisiana is not required to monitor carbon monoxide emissions from Nelson Unit 6 on a regular or continuous schedule. Stack tests performed in 2010 appear to indicate carbon monoxide emissions in excess of the maximum hourly limit for three 1-hour test runs and the annual limit. Comparison of the 2010 stack tests with the most recent previous tests from 2006, however, appear to indicate that the permit limits were calculated incorrectly and should have been higher. The 2010 test emission levels did not cause a violation of National Ambient Air Quality Standards. Additionally, the 2010 stack testing, which was performed in compliance with an EPA data request connected to the EPA’s development of a new air emissions rule, was not taken during a period of normal and representative operations for Nelson Unit 6. Entergy Gulf States Louisiana continues to develop data regarding this matter in coordination with the LDEQ.

Clean Water Act

NPDES Permits and Section 401 Water Quality Certifications

Indian Point

See the Form 10-K for a discussion of Indian Point permitting and water quality certification proceedings. On June 21, 2011, Entergy filed notice with the NRC that the NYSDEC, the agency that would issue or deny a water quality certification for the Indian Point license renewal process, has taken longer than one year to take final action on Entergy’s application for a water quality certification and, therefore, has waived its opportunity to require a certification under the provisions of Section 401 of the Clean Water Act. Entergy submitted its application for a water quality certification to the NYSDEC in April 2009, with a reservation of rights regarding the applicability of Section 401 in this case. After Entergy submitted certain additional information in response to NYSDEC requests for additional information, in February 2010 the NYSDEC staff determined that Entergy’s water quality certification application was complete. In April 2010 the NYSDEC staff issued a proposed notice of denial of Entergy’s water quality certification application (the Notice). NYSDEC staff’s Notice triggered an administrative adjudicatory hearing before NYSDEC ALJs on the proposed Notice that remains ongoing, but no final decision has been rendered. The NYSDEC has notified the NRC that it disagrees with Entergy’s position and does not believe that it has waived the right to require a certification. The NYSDEC ALJs overseeing the agency’s certification adjudicatory process stated in a ruling issued on July 15, 2011 that while the waiver issue is pending before the NRC, the NYSDEC hearing process will continue on selected issues. The hearing began on October 17, 2011 and is expected to continue into 2012.

316(b) Cooling Water Intake Structures

See the Form 10-K for a discussion of the EPA regulations finalized in July 2004 governing the intake of water at large existing power plants employing cooling water intake structures. The rule sought to reduce perceived impacts on aquatic resources by requiring covered facilities to implement technology or other measures to meet EPA-targeted reductions in water use and corresponding perceived aquatic impacts. Entergy, other industry members

162

Table of Contents

and industry groups, environmental groups, and a coalition of northeastern and mid-Atlantic states challenged various aspects of the rule. In January 2007, the U.S. Second Circuit Court of Appeals remanded the rule to the EPA for reconsideration. The court instructed the EPA to reconsider several aspects of the rule that were beneficial to businesses affected by the rule after finding that these provisions of the rule were contrary to the language of the Clean Water Act or were not sufficiently explained in the rule. In April 2008, the U.S. Supreme Court agreed to review the Second Circuit decision on the question of whether the EPA may take into consideration a cost-benefit analysis in developing these regulations, a consideration of potential benefit to businesses affected by the rule that the Second Circuit disallowed. In March 2009, the Supreme Court ruled in favor of the petitioners that cost-benefit analysis may be taken into consideration. The EPA reissued the proposed rule in April 2011, with finalization anticipated by July 27, 2012. Entergy currently is reviewing the revised proposed rule and filed comments with the EPA.

Other Environmental Matters

Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy New Orleans, and Entergy Texas

The Texas Commission on Environmental Quality (TCEQ) notified Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy New Orleans, and Entergy Texas that the TCEQ believes those entities are PRPs concerning contamination existing at the San Angelo Electric Service Company (SESCO) facility in San Angelo, Texas. The facility operated as a transformer repair and scrapping facility from the 1930s until 2003. Both soil and groundwater contamination exists at the site. Entergy Gulf States, Inc. and Entergy Louisiana sent transformers to this facility during the 1980s. Entergy Gulf States Louisiana, Entergy Texas, Entergy Louisiana, and Entergy Arkansas responded to an information request from the TCEQ and continue to cooperate in this investigation. Entergy Gulf States Louisiana, Entergy Texas, and Entergy Louisiana joined a group of PRPs responding to site conditions in cooperation with the State of Texas, creating cost allocation models based on review of SESCO documents and employee interviews, and investigating contribution actions against other PRPs. Entergy Gulf States Louisiana, Entergy Louisiana, and Entergy Texas have agreed to contribute to the remediation of contaminated soil and groundwater at the site in a measure proportionate to those companies’ involvement at the site, while Entergy Arkansas and Entergy New Orleans likely will pay de minimis amounts. Current estimates, although preliminary and variable depending on the level of third-party cost contributions, indicate that Entergy’s total share of remediation costs likely will be less than $1 million. The TCEQ approved an agreed administrative order in September 2006 that allows the implementation of a Remedial Investigation/Feasibility Study at the SESCO site; with the ultimate disposition being a remedial action to remove contaminants of concern. The TCEQ approved the Remedial Investigation Work Plan in May 2007 and field sampling began in July 2007. Off-site removal activities of PCB-impacted soil and debris were completed at the site in December 2010. The Remedial Investigation report was submitted in February 2011 to the TCEQ and was approved on April 15, 2011. The PRP working group prepared a Feasibility Study and description of proposed site remediation and management actions for TCEQ’s review. This information was submitted to the TCEQ in June 2011.

Property

Following is an update to the Entergy Wholesale Commodities, Property section of Part I, Item 1 of the Form 10-K.

Nuclear Generating Stations

As discussed further in the Form 10-K, the NRC operating license for Vermont Yankee was to expire in March 2012. In March 2011 the NRC renewed Vermont Yankee’s operating license for an additional 20 years, as a result of which the license now expires in 2032. In May 2011 the Vermont Department of Public Service and the New England Coalition petitioned the United States Court of Appeals for the District of Columbia seeking judicial review of the NRC’s issuance of the renewed operating license alleging that the license had been issued without a valid and effective water quality certification under Section 401 of the Clean Water Act. Entergy Nuclear Vermont Yankee and Entergy Nuclear Operations, Inc. intervened in the proceeding. Motions by the parties for summary disposition were denied by the court, which set a briefing schedule on the merits that ends in February 2012. Oral argument may be scheduled after briefing is completed. See Note 11 to the financial statements herein for additional discussion of Vermont Yankee.

163

Table of Contents

Earnings Ratios (Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

The Registrant Subsidiaries have calculated ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends/distributions pursuant to Item 503 of Regulation S-K of the SEC as follows:

	Ratios of Earnings to Fixed Charges
	Twelve Months Ended
	December 31,					September 30,
	2006	2007	2008	2009	2010	2011

Entergy Arkansas	3.37	3.19	2.33	2.39	3.91	4.09
Entergy Gulf States Louisiana	3.01	2.84	2.44	2.99	3.58	4.02
Entergy Louisiana	3.23	3.44	3.14	3.52	3.41	2.09
Entergy Mississippi	2.54	3.22	2.92	3.25	3.30	3.45
Entergy New Orleans	1.52	2.74	3.71	3.66	4.41	6.09
Entergy Texas	2.12	2.07	2.04	1.92	2.10	2.31
System Energy	4.05	3.95	3.29	3.73	3.64	3.78

	Ratios of Earnings to Combined Fixed Charges and Preferred Dividends/Distributions
	Twelve Months Ended
	December 31,					September 30,
	2006	2007	2008	2009	2010	2011

Entergy Arkansas	3.06	2.88	1.95	2.09	3.50	3.66
Entergy Gulf States Louisiana	2.90	2.73	2.42	2.95	3.53	3.96
Entergy Louisiana	2.90	3.08	2.87	3.27	3.13	1.89
Entergy Mississippi	2.34	2.97	2.67	3.01	3.06	3.16
Entergy New Orleans	1.35	2.54	3.45	3.38	3.97	5.33

The Registrant Subsidiaries accrue interest expense related to unrecognized tax benefits in income tax expense and do not include it in fixed charges.

Item 6. Exhibits *

	4(a) -	Officer’s Certificate No. 5-B-4 dated September 7, 2011, supplemental to Indenture, Deed of Trust and Security Agreement dated as of October 1, 2008, between Entergy Texas, Inc. and The Bank of New York Mellon, as trustee (4.40 to Form 8-K dated September 13, 2011 in 1-34360).

	12(a) -	Entergy Arkansas’s Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined.

	12(b) -	Entergy Gulf States Louisiana’s Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Distributions, as defined.

164

Table of Contents

	12(c) -	Entergy Louisiana’s Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Distributions, as defined.

	12(d) -	Entergy Mississippi’s Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined.

	12(e) -	Entergy New Orleans’s Computation of Ratios of Earnings to Fixed Charges and of Earnings to Combined Fixed Charges and Preferred Dividends, as defined.

	12(f) -	Entergy Texas’s Computation of Ratios of Earnings to Fixed Charges, as defined.

	12(g) -	System Energy’s Computation of Ratios of Earnings to Fixed Charges, as defined.

	31(a) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation.

	31(b) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation.

	31(c) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas.

	31(d) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas.

	31(e) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Gulf States Louisiana.

	31(f) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Gulf States Louisiana.

	31(g) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana.

	31(h) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana.

	31(i) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi.

	31(j) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi.

	31(k) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans.

	31(l) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans.

	31(m) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Texas.

	31(n) -	Rule 13a-14(a)/15d-14(a) Certification for Entergy Texas.

	31(o) -	Rule 13a-14(a)/15d-14(a) Certification for System Energy.

	31(p) -	Rule 13a-14(a)/15d-14(a) Certification for System Energy.

	32(a) -	Section 1350 Certification for Entergy Corporation.

	32(b) -	Section 1350 Certification for Entergy Corporation.

	32(c) -	Section 1350 Certification for Entergy Arkansas.

	32(d) -	Section 1350 Certification for Entergy Arkansas.

	32(e) -	Section 1350 Certification for Entergy Gulf States Louisiana.

165

Table of Contents

	32(f) -	Section 1350 Certification for Entergy Gulf States Louisiana.

	32(g) -	Section 1350 Certification for Entergy Louisiana.

	32(h) -	Section 1350 Certification for Entergy Louisiana.

	32(i) -	Section 1350 Certification for Entergy Mississippi.

	32(j) -	Section 1350 Certification for Entergy Mississippi.

	32(k) -	Section 1350 Certification for Entergy New Orleans.

	32(l) -	Section 1350 Certification for Entergy New Orleans.

	32(m) -	Section 1350 Certification for Entergy Texas.

	32(n) -	Section 1350 Certification for Entergy Texas.

	32(o) -	Section 1350 Certification for System Energy.

	32(p) -	Section 1350 Certification for System Energy.

	101 INS -	XBRL Instance Document.

	101 SCH -	XBRL Taxonomy Extension Schema Document.

	101 PRE -	XBRL Taxonomy Presentation Linkbase Document.

	101 LAB -	XBRL Taxonomy Label Linkbase Document.

	101 CAL -	XBRL Taxonomy Calculation Linkbase Document.

	101 DEF -	XBRL Definition Linkbase Document.

___________________________

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy Corporation agrees to furnish to the Commission upon request any instrument with respect to long-term debt that is not registered or listed herein as an Exhibit because the total amount of securities authorized under such agreement does not exceed ten percent of the total assets of Entergy Corporation and its subsidiaries on a consolidated basis.

*	Incorporated herein by reference as indicated.

166

Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.

ENTERGY CORPORATION

ENTERGY ARKANSAS, INC.

ENTERGY GULF STATES LOUISIANA, L.L.C.

ENTERGY LOUISIANA, LLC

ENTERGY MISSISSIPPI, INC.

ENTERGY NEW ORLEANS, INC.

ENTERGY TEXAS, INC.

SYSTEM ENERGY RESOURCES, INC.

/s/ Theodore H. Bunting, Jr.

Theodore H. Bunting, Jr

Senior Vice President and Chief Accounting Officer

(For each Registrant and for each as

Principal Accounting Officer)

Date: November 4, 2011

167