Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes þ No o

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

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

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

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

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

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

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

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

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

On April 5, 2010, Entergy announced that, effective immediately, it ~~plans~~planned to unwind the business infrastructure associated with the proposed separate Non-Utility Nuclear generation (Enexus) and nuclear services (EquaGen) companies while it evaluates and works to preserve its legal rights. Entergy also ~~announced that~~declared its next quarterly dividend on its common shares ~~would be~~of $0.83 per share, an increase from the previous $0.75 per share, and announced that it expected to execute on the $750 million share repurchase program authorized by the Board in the fourth quarter 2009. The amount of repurchases may vary as a result of material changes in business results or capital spending or new investment opportunities. As a result of the plan to unwind the business infrastru cture, Entergy recorded expenses ~~in the first quarter 2010~~ for the write-off of certain capitalized costs incurred in connection with the planned spin-off transaction. These costs are discussed in more detail throughout the "Results of Operations" section below. Entergy expects that it will incur approximately ~~$50~~$40 million, after-tax, in additional expenses in unwinding this business, primarily through the remainder of 2010, including additional write-offs, dis-synergies, and certain other costs.

In July 2010, Entergy withdrew its spin-off transaction petition that was filed with the NYPSC.

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

3

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

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

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

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

The volume/weather variance is primarily due to an increase of ~~2,654~~1,966 GWh, or ~~12%~~9%, in billed electricity usage in all sectors, including the effect of ~~significantly colder-than-normal~~warmer-than-normal weather on the residential sector.

The retail electric price variance is primarily due to increases in the formula rate plan riders at Entergy Gulf States Louisiana effective January 2010 and November 2009, at Entergy Louisiana effective November 2009, and at Entergy Mississippi effective July 2009. See Note 2 to the financial statements in the Form 10-K for further discussion of the formula rate plan increases. The retail electric price increase was partially offset by the recovery in 2009 by Entergy Arkansas of 2008 extraordinary storm costs as approved by the APSC and a base rate decrease at Entergy New Orleans effective June 2009.

The ~~net gas revenue~~rough production cost equalization variance is ~~primarily~~ due to an additional $18.6 million allocation recorded in the ~~effect~~second quarter of ~~significantly colder-than-normal weather on residential sales.~~2009 of 2007 rough production cost equalization receipts ordered by the PUCT to Texas retail customers over what was originally allocated to Entergy Texas prior to the jurisdictional separation of Entergy Gulf States, Inc. into Entergy Gulf States Louisiana and Entergy Texas, effective December 2007, as discussed in Note 2 to the financial statements.

In 2009, Entergy Arkansas capitalized $12.5 million of Ouachita plant service charges that were previously expensed. The result of the capitalization in 2009 was a decrease in net revenues with an offsetting decrease in other operation and maintenance expenses.

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

As shown in the table above, net revenue for Non-Utility Nuclear ~~decreased~~increased by ~~$48~~$33 million, or 8%7%, in the ~~first~~second quarter 2010 compared to the ~~first~~second quarter 2009 primarily due to higher volume resulting from more refueling outage days in 2009, partially offset by lower pricing in its contracts to sell ~~power, partially offset by slightly higher volume resulting from fewer refueling outage days.~~power. Included in net revenue is $12 million and $13 million of amortization of the Palisades purchased power agreement in the ~~first~~second quarters 2010 and 2009, respectively, which is non-cash revenue and is discussed in Note 15 to the financial statements in the Form 10-K. Following are key performance measures for Non-Utility Nuclear for the ~~first~~second quarter 2010 and 2009:

5

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

See the Form 10-K for a discussion of Non-Utility Nuclear's realized price per MWh, including the factors that influence it and the increase in the annual average realized price per MWh from $39.40 for 2003 to $61.07 for 2009. Non-Utility Nuclear is likely to experience a decrease in realized price per MWh in 2010, however, because the realized price for the first six months of 2010 was $58.22 and, as shown in the contracted sale of energy table in "Market and Credit Risk Sensitive Instruments," Non-Utility Nuclear has sold forward 91% of its planned energy output for the remainder of 2010 for an average contracted energy price of ~~$57~~$58 per MWh.

Other operation and maintenance expenses ~~increased~~decreased from ~~$422~~$483 million for the ~~three months ended March 31,~~second quarter 2009 to ~~$435~~$471 million for the ~~three months ended March 31,~~second quarter 2010 primarily due to:

Other income decreased primarily due to a decrease of $11 million in carrying charges on storm restoration costs recorded in the first quarter 2009 and a decrease in allowance for equity funds used during construction due to higher construction work in progress in 2009 primarily as a result of Hurricane Gustav and Hurricane Ike. The decrease was partially offset by higher earnings on decommissioning trust funds.costs.

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

Other income increased in the second quarter 2010 primarily due to $69 million in charges in 2009 resulting from the recognition of impairments that are not considered temporary of certain equity securities held in Non-Utility Nuclear's decommissioning trust funds.

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

The effective income tax rate for the second quarter 2009 was 28.1%. The reduction in the effective income tax rate versus the statutory rate of 35% for the second quarter 2009 was primarily due to:

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

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

7

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

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

The volume/weather variance is primarily due to an increase of 4,621 GWh, or 10%, in billed electricity usage in all sectors, including the effect on the residential sector of colder-than-normal weather in the first quarter 2010 and warmer-than-normal weather in the second quarter 2010.

The retail electric price variance is primarily due to increases in the formula rate plan riders at Entergy Gulf States Louisiana effective January 2010 and November 2009, at Entergy Louisiana effective November 2009, and at Entergy Mississippi effective July 2009. See Note 2 to the financial statements in the Form 10-K for further discussion of the formula rate plan increases. The retail electric price increase was partially offset by the recovery in 2009 by Entergy Arkansas of 2008 extraordinary storm costs as approved by the APSC and a base rate decrease at Entergy New Orleans effective June 2009.

The rough production cost equalization variance is due to an additional $18.6 million allocation recorded in the second quarter of 2009 of 2007 rough production cost equalization receipts ordered by the PUCT to Texas retail customers over what was originally allocated to Entergy Texas prior to the jurisdictional separation of Entergy Gulf States, Inc. into Entergy Gulf States Louisiana and Entergy Texas, effective December 2007, as discussed in Note 2 to the financial statements.

In 2009, Entergy Arkansas capitalized $12.5 million of Ouachita plant service charges that were previously expensed. The result of the capitalization in 2009 was a decrease in net revenues with an offsetting decrease in other operation and maintenance expenses.

The net gas revenue variance is primarily due to the effect of colder-than-normal weather on residential sales in the first quarter 2010.

8

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

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

As shown in the table above, net revenue for Non-Utility Nuclear decreased by $15 million, or 1%, in the six months ended June 30, 2010 compared to the six months ended June 30, 2009 primarily due to lower pricing in its contracts to sell power, substantially offset by higher volume resulting from more refueling outage days in 2009. Included in net revenue is $23 million and $26 million of amortization of the Palisades purchased power agreement in the six months ended June 30, 2010 and 2009, respectively, which is non-cash revenue and is discussed in Note 15 to the financial statements in the Form 10-K. Following are key performance measures for Non-Utility Nuclear for the six months ended June 30, 2010 and 2009:

Other operation and maintenance expenses were flat for the six months ended June 30, 2010 compared to the six months ended June 30, 2009. Increases of $15 million in payroll-related and benefits costs and $12.5 million due to the capitalization in 2009 of Ouachita plant service charges previously expensed were offset by decreases of $13 million due to higher write-offs of uncollectible customer accounts in 2009 and $10 million due to 2008 storm costs at Entergy Arkansas which were deferred per an APSC order and were recovered through revenues in 2009.

Other income decreased primarily due to a decrease of $23 million in carrying charges on storm restoration costs, partially offset by an increase of $9 million resulting from higher earnings on decommissioning trust funds.

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

9

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Other operation and maintenance expenses increased from ~~$200~~$404 million for the ~~three~~six months ended ~~March 31,~~June 30, 2009 to ~~$247~~$481 million for the ~~three~~six months ended ~~March 31,~~June 30, 2010 primarily due to the write-off of $32 million of capital costs, primarily for software that will not be utilized, in connection with Entergy's decision to unwind the infrastructure created for the planned Non-Utility Nuclear spin-off transaction. Also contributing to the increase were higher spending on other operation and maintenance expenses resulting from fewer refueling outage days, tritium remediation work at the Vermont Yankee site, higher pension and benefits expense, and higher insurance expense.

Other income increased primarily due to ~~$16~~$85 million in charges in 2009 resulting from the recognition of impairments that are not considered temporary of certain equity securities held in Non-Utility Nuclear's decommissioning trust funds, increases in realized earnings on the decommissioning trust funds, and interest income from loans to Entergy subsidiaries.

Interest charges increased primarily due to the write-off of ~~$37~~$39 million of debt financing costs, primarily incurred for Enexus's $1.2 billion credit facility, in connection with Entergy's decision to unwind the infrastructure created for the planned Non-Utility Nuclear spin-off transaction. Partially offsetting the increase was a decrease in fees paid to Entergy Corporation for providing collateral in the form of guarantees in connection with some of Non-Utility Nuclear's agreements to sell power. The guarantee fees paid are intercompany transactions and are eliminated in consolidation.

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

The effective income tax rate for the ~~first quarter~~six months ended June 30, 2010 was ~~40.3%~~39.5%. The difference in the effective income tax rate versus the statutory rate of 35% for the ~~first quarter~~six months ended June 30, 2010 is primarily due to a charge of $16 million resulting from a change in tax law associated with the recently enacted federal healthcare legislation, as discussed below in "Critical Accounting Estimates". Also contributing to the increased effective rate were state income taxes and certain book and tax differences for utility plant items. These factors were partially offset by a $19 million tax benefit recorded in connection with Entergy's decision to unwind the infrastructure ~~created~~c reated for the planned Non-Utility Nuclear spin-off transaction resulting from implementation expenses that previously were not deductible for tax purposes. Also offsetting the increased effective rate are book and tax differences related to storm cost financing and allowance for equity funds used during construction.

The effective income tax rate for the ~~first quarter~~six months ended June 30, 2009 was ~~40.4%~~35.0%. The ~~difference in the~~ effective income tax rate ~~versus~~is equal to the statutory rate of 35% for the ~~first quarter~~six months ended June 30, 2009 is primarily due to the reductions in the effective income tax rate discussed below being offset by increases related to state income taxes at the Utility operating companies and ~~certain~~ book and tax differences for utility plant ~~items, partially offset by book~~items. The effective income tax rate for the six months ended June 30, 2009 reflected reductions related to:

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.

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

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.

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

11

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

See the Form 10-K for a discussion of the Little Gypsy repowering project. In October 2009, Entergy Louisiana made a filing with the LPSC seeking permission to cancel the project and seeking recovery over a five-year period of the project costs. In June 2010, the LPSC Staff and Intervenors filed testimony. The LPSC Staff (1) agreed that it was prudent to move the project from long-term suspension to cancellation and that the timing of the decision to suspend on a longer-term basis was not imprudent; (2) indicated that, except for $0.8 million in compensation-related cotst, the costs incurred should be deemed prudent; (3) recommended recovery from customers over ten years but stated that the LPSC may want to consider 15 years; (4) allowed for rec overy of carrying costs and earning a return on project costs, but at a reduced rate approximating the cost of debt, while also acknowledging that the LPSC may consider ordering no return; and (5) indicated that Entergy Louisiana should be directed to securitize project costs, if legally feasible and in the public interest. The procedural schedule calls for hearings to begin in November 2010.

~~See Note 4~~As discussed in the Form 10-K, in January 2009 a severe ice storm caused significant damage to Entergy Arkansas' transmission and distribution lines, equipment, poles, and other facilities. A law was enacted in April 2009 in Arkansas that authorizes securitization of storm damage restoration costs. In June 2010 the ~~financial statements for discussion~~APSC issued a financing order authorizing the issuance of ~~long-term debt issuances by~~approximately $126.3 million in storm cost recovery bonds, which includes carrying costs of $11.5 million and $4.6 million of up-front financing costs. Entergy ~~Louisiana~~Arkansas expects the bonds to be issued in the third quarter 2010.

12

Entergy Corporation and ~~Entergy Mississippi in 2010.~~Subsidiaries

Management's Financial Discussion and Analysis

As discussed in the Form 10-K, in September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to Entergy's service territory. Entergy Gulf States Louisiana and Entergy Louisiana filed their Hurricane Gustav and Hurricane Ike storm cost recovery case with the LPSC in May 2009. In September 2009, Entergy Gulf States Louisiana and Entergy Louisiana and the Louisiana Utilities Restoration Corporation (LURC), an instrumentality of the State of Louisiana, filed with the LPSC an application requesting that the

the Louisiana Regular Session of 2007 (Act 55 financings). Entergy Gulf States Louisiana’s and Entergy Louisiana’s Hurricane Katrina and Hurricane Rita storm costs were financed primarily by Act 55 financings, as discussed in the Form 10-K. Entergy Gulf States Louisiana and Entergy Louisiana also filed an application requesting LPSC approval for ancillary issues including the mechanism to flow charges and Act 55 financing savings to customers via a Storm Cost Offset rider. On December 30, 2009, Entergy Gulf States Louisiana and Entergy Louisiana entered into a stipulation agreement with the LPSC Staff that provides for total recoverable costs of approximately $234 million for Entergy Gulf ~~States~~St ates Louisiana and $394 million for Entergy ~~Louisiana.~~Louisiana, including carrying costs. Under this stipulation, Entergy Gulf States Louisiana agrees not to recover $4.4 million and Entergy Louisiana agrees not to

On July 22, 2010, the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) issued $468.9 million in bonds under Act 55. From the $462.4 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $200 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $262.4 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana used $262.4 million to acquire 2,624,297.11 Class B preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2 010, and the membership interests have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is ~~now required before~~subject, including the requirement to maintain a net worth of at least $1 billion.

Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana ~~proceed with~~do not report the ~~Act 55 financings.~~bonds on their balance sheets because the bonds are the obligation of the LCDA, and there is no recourse against Entergy, Entergy Gulf States Louisiana or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Gulf States Louisiana and Entergy Louisiana collect a system restoration charge on behalf of the LURC, and remit the collections to the bond indenture trustee. Entergy Gulf States Louisiana and Entergy Louisiana will not report the collections as revenue because they are merely acting as the billing and collection agents for the state.

As shown in Entergy's Consolidated Statements of Cash Flows, cash flows for the ~~three~~six months ended ~~March 31,~~June 30, 2010 and 2009 were as follows:

Entergy's cash flow provided by operating activities increased by ~~$299~~$452 million for the ~~three~~six months ended ~~March 31,~~June 30, 2010 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2009, primarily due to the absence of the Hurricane Gustav, Hurricane Ike, and Arkansas ice storm restoration spending that occurred in 2009. In addition, an increase in Utility net revenue also contributed to the increase. These increases were partially offset by decreased collection of fuel costs and an $87.8 million fuel cost refund made by Entergy Texas in the first quarter 2010 that is discussed further in Note 2 to the financial statements in the Form 10-K. Operating cash flow provided by the Non-Utility Nuclear business ~~was relatively unchanged,~~increased by approximately $80 million, with its ~~decline~~slight declin e in net revenue offset ~~b y~~by various, individually insignificant, factors.

Net cash used in investing activities ~~decreased~~increased by ~~$131~~$53 million for the ~~three~~six months ended ~~March 31,~~June 30, 2010 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2009, primarily due to ~~a decrease~~an increase in nuclear fuel purchases, ~~and~~partially offset by an increase in collateral deposits received from Non-Utility Nuclear counterparties.

~~Financing~~Net cash used in financing activities ~~used cash flow of $212~~increased by $134 million for the ~~three~~six months ended ~~March 31,~~June 30, 2010 compared to ~~providing cash flow of $154 million for~~ the ~~three~~six months ended ~~March 31, 2009. The following significant financing cash flow activity occurred in~~June 30, 2009 primarily because Entergy repurchased $137.7 million of its common stock during the ~~three~~six months ended ~~March 31, 2010 and 2009:~~June 30, 2010. Entergy made no common stock repurchases during the six months ended June 30, 2009.

·

Entergy Corporation increased the net borrowings under its credit facilities by $49 million in the first quarter 2010 compared to decreasing the net borrowings under its credit facilities by $5 million in the first quarter 2009. See Note 4 to the financial statements for a description of the Entergy Corporation credit facilities.

For details regarding Entergy's long-term debt activity in 2010 see Note 4 to the financial statements herein.

·	Entergy Texas issued $500 million of 7.125% Series Mortgage Bonds in January 2009 and used a portion of the proceeds to repay $100 million in borrowings outstanding on its long-term credit facility and $70.8 million in long-term debt prior to maturity in 2009.

·	~~The Utility operating companies increased the borrowings outstanding on their short-term credit facilities by $25 million in 2009.~~

14

~~In addition, in March 2010,~~

Entergy ~~Louisiana issued $150 million of 6.0% Series first mortgage bonds due March 2040. Because the proceeds were deposited directly with a trustee~~Corporation and not held by Entergy Louisiana, the bond issuance is reported as a non-cash financing activity on the cash flow statement. Entergy Louisiana used the proceeds in April 2010, together with other available funds, to redeem, prior to maturity, all of its $150 million 7.60% Series first mortgage bonds, due April 2032.Subsidiaries

Management's Financial Discussion and Analysis

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.

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

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

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

Several parties intervened in the 2009 rate proceeding at the FERC, including the LPSC and Ameren, which have also filed protests. On July 27, 2009, the FERC accepted Entergy's proposed rates for filing, effective June 1, 2009, subject to refund, and set the proceeding for hearing and settlement procedures. Settlement procedures were terminated and a hearing before the ALJ was held in April 2010. An initial decision is scheduled for August 2010.

In February 2010 the APSC issued an order announcing a refocus of its ongoing investigation of Entergy Arkansas' post-System Agreement operation. The order describes the APSC's "stated purpose in opening this inquiry to conduct an investigation regarding the prudence of [Entergy Arkansas] entering into a successor ESA [Entergy System Agreement] as opposed to becoming a stand-alone utility upon its exit from the ESA, and whether [Entergy Arkansas], as a standalone utility, should join the SPP RTO. It is the

15

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

~~In March 2010,~~ Entergy Arkansas filed testimony and participated in a March 2010 evidentiary hearing in the ~~scheduled hearing.~~proceeding. Entergy Arkansas noted in its testimony that it is not reasonable to complete a comprehensive evaluation of strategic options by the end of 2010 and that forcing a decision would place parties in the untenable position of making critical decisions based on insufficient information. Entergy Arkansas outlined three options for post-System Agreement operation of its electrical system: 1) Entergy Arkansas self providing its generation planning and operating functions as a stand-alone ~~company for resource planning;~~company; 2) Entergy Arkansas plus new coordination agreements with third parties in which Entergy Arkansas self provides ~~or contracts~~ some planning and operations functions, but also ~~enters~~enter s into one or more coordinating or pooling ~~agreemen ts~~agreements with third ~~parties, such as the Southwest Power Pool RTO;~~parties; and 3) Successor Arrangements under which Entergy Arkansas plans for its own generation resources but enters into a new generation commitment and dispatch agreement with other Utility operating companies under a successor agreement intended to ~~benefit all but~~ avoid the litigation previously experienced. Entergy Arkansas’s plan is expected to lead to a decision ~~regarding critical path issues~~ in late ~~2011;~~2011 regarding which option to implement; however, Entergy Arkansas anticipates pursuing in 2010-2011 several ~~transition plan~~ elements ~~will move forward in 2010.~~that are common to all options. In an attempt to reach understanding of complex issues, Entergy Arkansas proposes to hold a series of five technical conferences in the coming months targeting specific subjects. The ~~initial~~first two technical ~~conference~~conferences were held in May and July 2010. A second evidentiary hearing in the proceeding is scheduled for ~~May 5,~~August 2010.

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

See the Form 10-K for a discussion of the complaint that the LPSC filed in June 2009 requesting that the FERC determine that certain of Entergy Arkansas' sales of electric energy to third parties: (a) violated the provisions of the System Agreement that allocate the energy generated by Entergy System resources, (b) imprudently denied the Entergy System and its ultimate consumers the benefits of low-cost Entergy System generating capacity, and (c) violated the provision of the System Agreement that prohibits sales to third parties by individual companies absent an offer of a right-of-first-refusal to other Utility operating companies. Settlement procedures were unsuccessful, and a hearing in the matter is scheduled to commence in August 2010. On April 16, 2010, the L PSC filed direct testimony in the proceeding alleging, among other things, (1) that ~~(1)~~ Entergy violated the System Agreement by permitting Entergy Arkansas to make non-requirements sales to non-affiliated third parties rather than making such energy available to the other Utility operating companies’ customers; and (2) that over the period 2000 – 2009, these non-requirements sales caused harm to the Utility operating companies’ customers of $144.4 million and these customers should be compensated for this harm by Entergy’s shareholders. The Utility operating companies believe the LPSC's allegations are without ~~merit and will file their rebuttal testimony by May 25, 2010.~~merit.

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

16

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

considering proposed modifications to the ICT arrangement that could be implemented commencing November 2010, when the initial term of the ICT ends. ~~It is anticipat ed that~~Pursuant to a September 1, 2006, order of the LPSC, ELL and EGSL filed an initial report with the LPSC describing, among other things, Entergy’s proposal to modify the current ICT arrangement and to give the E-RSC ~~will reach its conclusions on~~ the ~~proposed modifications during the June/July 2010 timeframe, following which the proposed modifications will be filed with one or more~~authority, upon a unanimous vote, to direct Entergy (a) to make a filing pursuant to section 205 of the Federal Power Act to change the way transmission upgrade costs are allocated under the Entergy Open Access Transmission Tariff and (b) to add specific projects to Entergy’s construction plan. As noted in the report, the E-RSC is considering these and other modifications and has not reached a final conclusion. The Utility operating ~~companies' retail regulators and~~companies anticipate making the necessary filing with the FERC ~~prior~~ to ~~implementation.~~extend the ICT, like ly with modifications, in September 2010.

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

Some of the agreements to sell the power produced by Entergy's Non-Utility Nuclear power plants contain provisions that require an Entergy subsidiary to provide collateral to secure its obligations under the agreements. The Entergy subsidiary is required to provide collateral based upon the difference between the current market and contracted power prices in the regions where Non-Utility Nuclear sells power. The primary form of collateral to satisfy these requirements is an Entergy Corporation guaranty. Cash and letters of credit are also acceptable forms of collateral. At ~~March 31,~~June 30, 2010, based on power prices at that time, Entergy had no credit exposure of $13 million under the guarantees in place supporting Entergy Nuclear Power Marketing (a Non-Utility ~~Nuclear subsi diary)~~Nu clear subsidiary) transactions, $20 million of guarantees that support letters of credit, and $2$3 million of posted cash collateral. As of ~~March 31,~~June 30, 2010, the credit exposure associated with Non-Utility Nuclear assurance requirements would increase by ~~$35~~$64 million for ~~each~~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 ~~March 31,~~June 30, 2010, Entergy would have been required to provide approximately ~~$64~~$77 million of additional cash or letters of credit under some of the agreements.

As of ~~March 31,~~June 30, 2010, the counterparties or their guarantors for 99.5% of the planned energy output under contract for Non-Utility Nuclear through 2014 ~~99.7% of the planned energy output is under contract with counterparties with~~have public investment grade credit ratings and ~~0.3%~~0.5% is with load-serving entities without public credit ratings.

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

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.

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

1318

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

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

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. Entergy discusses regulatory proceedings in Note 2 to the financial statements in the Form 10-K and herein and discusses tax proceedings in Note 3 to the financial statements in the Form 10-K.

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.

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

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. E ntergy and the Registrant Subsidiaries are responding to these lawsuits and proceedings and deny liability to the claimants.

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)

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.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

Fuel and ~~purchased power cost recovery~~Purchased Power Cost Recovery

See Entergy Corporation and Subsidiaries' "MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS - System Agreement Proceedings" for updates to the discussion in the Form 10-K regarding the System Agreement proceedings.

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 pursuant to a November 1997 LPSC general order. The audit includes a review of the reasonableness of charges flowed by Entergy Gulf States Louisiana through its fuel adjustment clause for the period January 1, 1995 through December 31, 2002. In June 2005 the LPSC expanded the audit period to include the years through 2004. Discovery has largely concluded, and the LPSC Staff is expected to issue its report in the third quarter 2010. A procedural schedule will be set to establish a hearing process to address any issues noted in the LPSC Staff report that are contested by Entergy Gulf State s Louisiana. Entergy Gulf States Louisiana has recorded provisions for the estimated effect of this proceeding.

Entergy Mississippi

In August 2009 the MPSC retained an independent audit firm to audit Entergy Mississippi's fuel adjustment clause submittals for the period October 2007 through September 2009. The independent audit firm submitted its report to the MPSC in December 2009. The report does not recommend that any costs be disallowed for recovery. The report did suggest that some costs, less than one percent of the fuel and purchased power costs recovered during the period, may have been more reasonably charged to customers through base rates rather than through fuel charges, but the report did not suggest that customers should not have paid for those costs. In November 2009 the MPSC also retained another firm to review processes and practices related to fuel and pur chased energy. The results of that review were filed with the MPSC in March 2010. In that report, the independent consulting firm found that the practices and procedures in activities that directly affect the costs recovered through Entergy Mississippi's fuel adjustment clause appear reasonable. Both audit reports were certified by the MPSC to the Mississippi Legislature, as required by Mississippi law.

Entergy Texas

As discussed in the Form 10-K, in January 2008, Entergy Texas made a compliance filing with the PUCT describing how its 2007 rough production cost equalization receipts under the System Agreement were allocated between Entergy Gulf States, Inc.'s Texas and Louisiana jurisdictions. In ~~March~~December 2008 the PUCT adopted an ALJ proposal for decision recommending an additional $18.6 million allocation to Texas retail customers. Because the PUCT allocation to Texas retail customers is inconsistent with the LPSC allocation to Louisiana retail customers, the PUCT's decision results in trapped costs between the Texas and Louisiana jurisdictions with no mechanism for recovery. The PUCT denied Entergy Texas' motion for rehearing and Entergy Texas commenced proceedings in both state and federal district courts seeking to reverse the PUCT's decision. The federal proceeding had been abated pending action by the FERC in the proceeding discussed below.

Entergy Texas filed with the FERC a proposed amendment to the System Agreement bandwidth formula to specifically calculate the payments to Entergy Gulf States Louisiana and Entergy Texas of Entergy Gulf States, Inc.'s rough production cost equalization receipts for 2007. In May 2009 the FERC issued an order rejecting the proposed amendment. Because of the FERC's order, Entergy Texas recorded the effects of the PUCT's allocation of the additional $18.6 million to Texas retail customers in the second quarter 2009. On an after-tax basis, the charge to earnings was approximately $13.0 million (including interest). In May 2010 the ~~MPSC opened~~FERC rejected Entergy's request for rehearing of the FERC's order. On July 14, 2010, Entergy appealed the FER C's decision to the U.S. Court of Appeals for the District of Columbia.

30

Entergy Corporation and Subsidiaries

Notes to Financial Statements

In the settlement of Entergy Texas's December 2009 rate case proceeding that is discussed further below, Entergy Texas agreed to credit to fuel factor customers $18.6 million, with the parties agreeing that this amount represents the remaining portion of the 2007 rough production cost equalization payments received by Entergy Texas. Entergy Texas also agreed to dismiss the state and federal district court proceedings and its appeal of the FERC's decision, all of which were seeking to change the result of the December 2008 PUCT decision.

In June 2010, Entergy Texas filed with the PUCT a ~~docket~~request to ~~consider revisions to its rules regarding recovery~~refund approximately $66 million, including interest, of fuel ~~and energy costs and other general matters related to fuel adjustment clauses and fuel audits.~~cost recovery over-collections through May 2010. Entergy Texas requested that the proposed refund be made over a six-month period beginning no later than September 2010. The request is pending consideration by the PUCT.

Storm Cost Recovery ~~Filings~~

Entergy Arkansas Storm Reserve Accounting

The APSC's June 2007 order in Entergy Arkansas' base rate proceeding eliminated storm reserve accounting for Entergy Arkansas. In March 2009 a law was enacted in Arkansas that requires the APSC to permit storm reserve accounting for utilities that request it. Entergy Arkansas filed its request with the APSC, and ~~has~~ reinstated storm reserve accounting effective January 1, 2009. A hearing on Entergy Arkansas' request was held in March 2010, and in April 2010 the ALJ approved Entergy Arkansas’s establishment of a storm cost reserve account.

Entergy Arkansas January 2009 Ice Storm

As discussed in the Form 10-K, in January 2009 a severe ice storm caused significant damage to Entergy Arkansas' transmission and distribution lines, equipment, poles, and other facilities. A law was enacted in April 2009 in Arkansas that authorizes securitization of storm damage restoration costs. In June 2010 the APSC issued a financing order authorizing the issuance of approximately $126.3 million in storm cost recovery bonds, which includes carrying costs of $11.5 million and $4.6 million of up-front financing costs. Entergy Arkansas expects the bonds to be issued in the third quarter 2010.

Entergy Gulf States Louisiana and Entergy Louisiana Hurricane Gustav and Hurricane Ike Filing

As discussed in the Form 10-K, in September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to Entergy's service territory. Entergy Gulf States Louisiana and Entergy Louisiana filed their Hurricane Gustav and Hurricane Ike storm cost recovery case with the LPSC in May 2009. In September 2009, Entergy Gulf States Louisiana and Entergy Louisiana and the Louisiana Utilities Restoration Corporation (LURC), an instrumentality of the State of Louisiana, filed with the LPSC an application requesting that the LPSC grant financing orders authorizing the financing of Entergy Gulf States Louisiana’s and Entergy Louisiana’s storm costs, storm reserves, and issuance costs pursuant to Act 55 of the Louisiana Regular Session of 2007 (Act 55 financings). Entergy Gulf States Louisiana’s and Entergy Louisiana’s Hurricane Katrina and Hurricane Rita storm costs were financed primarily by Act 55 financings, as discussed in the Form 10-K. Entergy Gulf States Louisiana and Entergy Louisiana also filed an application requesting LPSC approval for ancillary issues including the mechanism to flow charges and Act 55 financing savings to customers via a Storm Cost Offset rider. On December 30, 2009, Entergy Gulf States Louisiana and Entergy Louisiana entered into a stipulation agreement with the LPSC Staff that provides for total recoverable costs of approximately $234 million for Entergy Gulf States Louisiana and $394 million for Entergy ~~Louisiana.~~Louisiana, including carrying costs. Under this stipulation, Entergy Gulf States Louisiana agrees not to recover $4.4 million and Entergy Louisiana agrees not to recover $7.2 million of ~~their~~thei r storm restoration ~~spendi ng.~~spending. The stipulation also permits replenishing Entergy Gulf States Louisiana's storm reserve in the amount of $90 million and Entergy Louisiana's storm reserve in the amount of $200 million when the Act 55 financings are accomplished. In March and April 2010, Entergy Gulf States Louisiana, Entergy Louisiana, and other parties to the proceeding filed with the LPSC an uncontested stipulated settlement that

23

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

includes these terms and also includes Entergy Gulf States Louisiana’s and Entergy Louisiana's proposals under the Act 55 financings, which includes a commitment to pass on to customers a

31

Entergy Corporation and Subsidiaries

Notes to Financial Statements

minimum of $15.5 million and $27.75 million of customer benefits, respectively, through prospective annual rate reductions of $3.1 million and $5.55 million for five years. A stipulation hearing was held before the ALJ on April 13, 2010. On April 21, 2010, the LPSC approved the settlement and subsequently issued two financing orders and one ratemaking order intended to facilitate the implementation of the Act 55 financings. In June 2010 the Louisiana State Bond Commission ~~approval~~approved the Act 55 financings.

On July 22, 2010, the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) issued $468.9 million in bonds under Act 55. From the $462.4 million of bond proceeds loaned by the LCDA to the LURC, the LURC deposited $200 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $262.4 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, Entergy Louisiana used $262.4 million to acquire 2,624,297.11 Class B preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2 010, and the membership interests have a liquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is ~~now required before~~subject, including the requirement to maintain a net worth of at least $1 billion.

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

Entergy, Entergy Gulf States Louisiana, and Entergy Louisiana ~~proceed with~~do not report the ~~Act 55 financings.~~bonds on their balance sheets because the bonds are the obligation of the LCDA, and there is no recourse against Entergy, Entergy Gulf States Louisiana or Entergy Louisiana in the event of a bond default. To service the bonds, Entergy Gulf States Louisiana and Entergy Louisiana collect a system restoration charge on behalf of the LURC, and remit the collections to the bond indenture trustee. Entergy Gulf States Louisiana and Entergy Louisiana will not report the collections as revenue because they are merely acting as the billing and collection agents for the state.

Entergy New Orleans

In December 2005, the U.S. Congress passed the Katrina Relief Bill, a hurricane aid package that included CDBG funding (for the states affected by Hurricanes Katrina, Rita, and Wilma) that allowed state and local leaders to fund individual recovery priorities. In March 2007, the City Council certified that Entergy New Orleans incurred $205 million in storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan, and certified Entergy New Orleans' estimated costs of $465 million for its gas system rebuild. Entergy New Orleans received $180.8 million of CDBG funds in 2007 and $19.2 million in 2010.

Federal Healthcare Legislation

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

32

Entergy Corporation and Subsidiaries

Notes to Financial Statements

One provision of the new law that is effective in 2013 eliminates the federal income tax deduction for prescription drug expenses of Medicare beneficiaries for which the plan sponsor also receives the retiree drug subsidy under Part D. Entergy receives subsidy payments under the Medicare Part D plan and therefore in the first quarter 2010 recorded a reduction to the deferred tax asset related to the unfunded other postretirement benefit obligation. The offset was recorded as a charge to income tax expense or, for the Utility, including each Registrant Subsidiary, as a regulatory asset. The Utility has a regulatory asset of $99 million recorded for this, including $31 million at Entergy Arkansas, $16 million at Entergy Gulf States Louisiana, $19 million at Entergy Louisiana, $10 million at Entergy Mississippi, $7 million at Entergy New Orleans, $11 million at Entergy Texas, and $5 million at System Energy.

Retail Rate Proceedings

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

Filings with the APSC

OnAs discussed in the Form 10-K, on September 4, 2009, Entergy Arkansas filed with the APSC for a general change in rates, charges, and tariffs. ~~Entergy Arkansas requested~~In June 2010 the APSC approved a ~~$223.2~~settlement and subsequent compliance tariffs that provide for a $63.7 million ~~base~~ rate increase, ~~that would become~~ effective infor bills rendered for the first billing cycle of July 2010. ~~In testimony filed in March 2010, Entergy Arkansas lowered its requested base rate increase to $168.6 million.~~ The ~~request now reflects~~settlement provides for a ~~10.65%~~10.2% return on common equity, using a projected capital structure, and proposes a formula rate plan mechanism. Proposed formula rate plan provisions include a +/- 25 basis point bandwidth, with earnings outside the bandwidth reset to the 10.65% return on common equity midpoint and rates changing on a prospective basis depending on whetherequity. Entergy ~~Arkansas is over or under-earning. Th e~~Arkansas's proposed formula rate plan ~~also includes~~mechanism, including a recovery mechanism for APSC-approved costs for additional capacity purchases or construction/acquisition of new transmission or generating facilities. Entergy Arkansas also lowered its requested annual storm damage accrual to $13.8 million. The latest APSC Staff position filed in testimony proposes a $49 million revenue increase reflecting a 10.1% return on common equity and $10 million forfacilities, was not adopted under the 2009 ice storm. In the event a formula rate plan is adopted, the APSC Staff recommends a further return on common equity reduction to 9.6%. The APSC scheduled hearings in the proceeding beginning in May 2010.settlement.

Filings with the LPSC

(Entergy Gulf States Louisiana)

See the Form 10-K for a discussion of Entergy Gulf States Louisiana’s formula rate plan that the LPSC approved for the 2008, 2009, and 2010 test years. Entergy Gulf States Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.65% return on equity for the 2008 test year. The rate reset, a $44.3 million increase that includes a $36.9 million cost of service adjustment, plus $7.4 million net for increased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In January 2010, Entergy Gulf States Louisiana implemented an additional $23.9 million rate increa se pursuant to a special rate implementation filing made in December 2009, primarily for incremental capacity costs approved by the LPSC. In May 2010, Entergy Gulf States Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and requested that the LPSC accept the report, which will result in a $0.8 million reduction in current rates effective in the June 2010 billing cycle and a $0.5 million refund. At its May 19, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflects a 10.25% 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 does reflect, however, consistent with a December 2009 filing, a $9.7 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the LPSC-regulated 70% share of River Bend, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. Currently, Entergy Gulf States Louisiana's retail rates contain no amount for decommissioning funding. The filing also re flects a $20.8 million rate increase for incremental capacity costs. In July 2010 the LPSC approved a $7.8 million increase in the revenue requirement for decommissioning, effective September 2010. Other issues in the formula rate plan proceeding remain pending.

33

Entergy Corporation and Subsidiaries

Notes to Financial Statements

In January 2010, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2009. The filing showed an earned return on common equity of 10.87%, which is within the earnings bandwidth of 10.5% plus or minus fifty basis points, resulting in no rate change. In April 2010, Entergy Gulf States Louisiana filed a revised evaluation report reflecting changes agreed upon with the LPSC Staff. The revised evaluation report also results in no rate change.

(Entergy Louisiana)

See the Form 10-K for a discussion of Entergy Louisiana’s formula rate plan that the LPSC approved for the 2008, 2009, and 2010 test years. Entergy Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.25% return on equity for the 2008 test year. The rate reset, a $2.5 million increase that includes a $16.3 million cost of service adjustment less a $13.8 million net reduction for decreased capacity costs and a base rate

24

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In April 2010, Entergy Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and ~~requested~~r equested that the LPSC accept the report, which will result in a $0.1 million reduction in current rates effective in the May 2010 billing cycle and a $0.1 million refund. In addition, Entergy Louisiana will move the recovery of approximately $12.5 million of capacity costs from fuel adjustment clause recovery to base rate recovery. At its April 21, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflects a 10.82% 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 does reflect, however, consistent with a December 2009 filing, a $7.9 million revenue requirement increase to provide supplemental funding for the decommissioning trust maintained for Waterford 3, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. Currently, Entergy Louisiana has $2.2 million in retail rates for decommissioning funding. The filing also reflects a $7.4 million rate decrease for increm ental capacity costs. In July 2010 the LPSC approved a $3.5 million increase in the retail revenue requirement for decommissioning, effective September 2010. Other issues in the formula rate plan proceeding remain pending.

Filings with the MPSC

In September 2009, Entergy Mississippi filed with the MPSC proposed modifications to its formula rate plan rider. In March 2010 the MPSC issued an order: (1) providing the opportunity for a reset of Entergy Mississippi's return on common equity to a point within the formula rate plan bandwidth and eliminating the 50/50 sharing that had been in the plan, (2) modifying the performance measurement process, and (3) replacing the revenue change limit of two percent of revenues, which was subject to a $14.5 million revenue adjustment cap, with a limit of four percent of revenues, although any adjustment above two percent requires a hearing before the MPSC. The MPSC did not approve Entergy Mississippi's request to use a projected test year for its annua l scheduled formula rate plan filing and, therefore, Entergy Mississippi will continue to use a historical test year for its annual evaluation reports under the plan.

OnAs discussed in the Form 10-K, in March ~~15,~~ 2010, Entergy Mississippi submitted its 2009 test year filing, its first annual filing under the new formula rate plan rider. In June 2010 the MPSC approved a joint stipulation between Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates, but does provide for the deferral as a regulatory asset of $3.9 million of legal expenses associated with certain litigation involving the Mississippi Attorney General, as well as ongoing legal expenses in that litigation until the litigation is resolved.

Filings with the City Council

In May 2010, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports. The ~~filing requests~~filings request a $12.8 million electric base revenue decrease and a $2.4 million gas base revenue increase. The new rates would be effective with the first billing cycle in October 2010. The City Council and its Advisors' review and consideration of these filings is pending.

34

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Filings with the PUCT and Texas Cities

As discussed in the Form 10-K, in December 2009, Entergy Texas filed a rate case requesting a $198.7 million increase reflecting an ~~$11.8 million revenue increase to reset Entergy Mississippi's~~11.5% return on common equity based on an adjusted June 2009 test year. The filing includes a proposed cost of service adjustment rider with a three-year term beginning with the 2010 calendar year as the initial evaluation period. Key provisions include a plus or minus 15 basis point bandwidth, with earnings outside the bandwidth reset to ~~11.74%, which~~the bottom or top of the band and rates changing prospectively depending upon whether Entergy Texas is under or over-earning. The annual change in revenue requirement is limited to a ~~point within~~percentage change in the ~~formula rate plan bandwidth.~~Consumer Price Index for urban areas, and the filing includes a provision for extrao rdinary events greater than $10 million per year that would be considered separately. The ~~formula rate plan calls for new rates~~filing also proposes a purchased power recovery rider and a competitive generation service tariff and will establish test year baseline values to be used in the transmission cost recovery factor rider authorized for use by Entergy Texas in the 2009 legislative session. The rate case also includes a $2.8 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the 70% share of River Bend for which Entergy Texas retail customers are responsible, in response to an NRC notification of a projected shortfall of decommissioning funding assurance. Beginning in May 2010, Entergy Texas implemented a $17.5 million interim rate increase, subject to refund. Intervenors and PUCT Staff filed testimony opposing the riders discussed above and recommended disallowances that would result in ~~June 2010. The Mississippi Public Utilities Staff has informed Entergy Mississippi by letter that,~~a maximum rate increase of, based ~~upon~~on the ~~information~~PUCT Staff’ s testimony, $58 million. Hearings regarding the ~~Staff has reviewed to date, the Staff has identified certain possible adjustments for consideration and that the Staff's review~~merits of the ~~filing~~competitive generation service tariff, which was a proposal required by law that would allow certain larger customers to obtain alternative generation supply, were held in July 2010, and this issue is ~~ongoing.~~pending a PUCT decision.

The parties filed a settlement in August 2010 intended to resolve the other issues in the rate case proceeding. The settlement provides for a $59 million base rate increase for electricity usage beginning August 15, 2010, with an additional increase of $9 million for bills rendered beginning May 2, 2011. The settlement stipulates an authorized return on equity of 10.125%. The settlement provides that Entergy Texas's proposed cost of service adjustment rider, purchased power recovery rider, and transmission cost recovery factors will not be approved in the rate case proceeding, although baseline values were established to be used in Entergy Texas's request for a transmission recovery factor that will be made in a separate procee ding. The settlement states that Entergy Texas's fuel costs for the period April 2007 through June 2009 are reconciled, with $3.25 million of disallowed costs. The settlement also sets River Bend decommissioning costs at $2.0 million annually. The current jurisdictional deadline by which the PUCT is required to issue a final order in this proceeding is November 1, 2010.

NOTE 3. EQUITY (Entergy Corporation)

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 March 31,						For the Three Months Ended June 30,
	2010			2009			2010			2009
	(In Millions, Except Per Share Data)						(In Millions, Except Per Share Data)

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

Net income attributable to Entergy Corporation	$213.8	189.2	$1.13	$235.3	192.6	$1.22	$315.3	188.8	$1.67	$226.8	196.1	$1.16
Average dilutive effect of:
Stock options	-	2.1	(0.01)	-	2.0	(0.01)	-	1.9	(0.02)	-	2.1	(0.02)
Equity units	-	-	-	$ 3.2	3.5	(0.01)

Diluted earnings per share	$213.8	191.3	$1.12	$238.5	198.1	$1.20	$315.3	190.7	$1.65	$226.8	198.2	$1.14

During the ~~first quarter~~six months ended June 30, 2010, Entergy Corporation issued ~~150,908~~192,906 shares of its previously repurchased common stock to satisfy stock option exercises and other stock-based awards. Also during the six months ended June 30, 2010, Entergy Corporation purchased 1,816,000 shares of common stock for a total purchase price of $137.7 million.

On ~~April 5,~~July 30, 2010, Entergy Corporation's Board of Directors declared a common stock dividend of $0.83 per share, payable on ~~June~~September 1, 2010 to holders of record as of ~~May~~August 12, 2010.

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 expires in August 2012 and has a borrowing capacity of approximately $3.5 billion. 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 0.09% 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 ~~three~~six months ended ~~March 31,~~June 30, 2010 was ~~0.671%~~0.713% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of ~~March 31,~~June 30, 2010.

Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas each had credit facilities available as of ~~March 31,~~June 30, 2010 as follows:

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

See Note 12 to the financial statements for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIE) effective in the first quarter 2010. The variable interest entities have short-term credit facilities and also issue commercial paper ~~(CP)~~ to finance the acquisition and ownership of nuclear fuel as follows as of ~~March 31,~~June 30, 2010:

The amount outstanding on these credit facilities and commercial paper issuances are presented as ~~"Notes payable"~~Notes payable on the balance sheets. The commitment fees on the credit facilities ~~range from~~are 0.10% ~~to 0.125%~~ of the commitment amount. Each credit facility requires the respective lessee (Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, or System Energy) to maintain a consolidated debt ratio of 70% or less of its total capitalization. In July 2010, each of these credit facilities were refinanced with new credit facilities, each in the same amount and with expiration dates of July 2013.

The variable interest entities had long-term notes payable that are included in long-term debt on the respective balance sheets as of ~~March 31,~~June 30, 2010 as follows:

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

On June 1, 2010, Entergy Arkansas paid, at maturity, its $100 million of 4.50% Series first mortgage bonds.

In March 2010, Entergy Louisiana issued $150 million of 6.0% Series first mortgage bonds due March 2040. Entergy Louisiana used the proceeds in April 2010, together with other available funds, to redeem, prior to maturity, all of its $150 million 7.60% Series first mortgage bonds, due April 2032. Because the proceeds were deposited directly with a trustee and not held by Entergy Louisiana, the bond issuance and redemption are reported as non-cash financing activity on the cash flow statement.

On June 1, 2010, Entergy Louisiana paid, at maturity, its $55 million of 4.670% Series first mortgage bonds.

In April 2010, Entergy Mississippi issued $80 million of 6.20% Series first mortgage bonds due April 2040. Entergy Mississippi ~~expects to use~~used the proceeds, together with other available funds, to redeem, prior to maturity, all of its $100 million 7.25% Series first mortgage bonds, due December 2032.

Pursuant to its plan of reorganization, in May 2007, Entergy New Orleans issued notes due in three years in satisfaction of its affiliate prepetition accounts payable (approximately $74 million, including interest), including its indebtedness to the Entergy System money pool. In May 2010, Entergy New Orleans repaid, at maturity, the notes payable.

On July 1, 2010, Entergy New Orleans paid, at maturity, its $30 million of 4.98% Series first mortgage bonds.

2839

Entergy Corporation and Subsidiaries

Notes to Financial Statements

In May 2010, Entergy Texas issued $200 million of 3.60% Series mortgage bonds due June 2015. Entergy Texas used a portion of the proceeds to pay prior to maturity Entergy Texas' remaining obligations (with interest rates ranging from 4.875% to 6.18% per annum and maturities ranging from November 1, 2011 to March 1, 2035) pursuant to the debt assumption agreement with Entergy Gulf States Louisiana.

In May 2010, Entergy Corporation repaid, at maturity, its $75 million 6.58% notes payable.

In June 2010, Entergy Corporation repaid, at maturity, its $60 million bank term loan.

The book value and the fair value of long-term debt for Entergy Corporation and the Registrant Subsidiaries as of ~~March 31,~~June 30, 2010 are as follows:

Entergy grants stock options, 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.

Entergy granted 1,407,900 stock options during the first quarter 2010 with a weighted-average fair value of $13.18. At ~~March 31,~~June 30, 2010, there were ~~12,547,629~~12,404,064 stock options outstanding with a weighted-average exercise price of ~~$70.82.~~$70.73. The aggregate intrinsic value of the stock options outstanding at ~~March 31,~~June 30, 2010 was ~~$132.2~~$11.1 million.

The Registrant Subsidiaries recognized the following pension cost for their non-qualified pension plans in the ~~first~~second quarters of 2010 and 2009:

Entergy's other postretirement benefit cost, including amounts capitalized, for the ~~first~~second quarters of 2010 and 2009, included the following components:

Based on current assumptions, Entergy expects to contribute $254 million to its qualified pension plans in 2010. Guidance pursuant to the Pension Protection Act of 2006 rules, effective for the 2009 plan year and beyond, may affect the level of Entergy’s pension contributions in the future. As of the end of ~~April~~July 2010, Entergy had contributed ~~$112~~$159 million to its pension plans. Therefore, Entergy presently anticipates contributing an additional ~~$142~~$95 million to fund its qualified pension plans in 2010.

Based on actuarial analysis, the estimated effect of future Medicare subsidies reduced the December 31, 2009 Accumulated Postretirement Benefit Obligation (APBO) by $215 million, and reduced the ~~first~~second quarter 2010 and 2009 other postretirement benefit cost by $6.6 million and $6.0 million, respectively. It reduced the six months ended June 30, 2010 and 2009 other postretirement benefit cost by $13.3 million and $12.0 million, respectively. In the ~~first~~second quarter 2010, Entergy received ~~$1.2~~$0.6 million in Medicare subsidies for prescription drug claims. In the six months ended June 30, 2010, Entergy received $1.8 million in Medicare subsidies for prescription drug claims.

Based on actuarial analysis, the estimated effect of future Medicare subsidies reduced the December 31, 2009 APBO and the ~~first~~second quarters 2010 and 2009 other postretirement benefit cost and the six months ended June 30, 2010 and 2009 other postretirement benefit cost for the Registrant Subsidiaries as follows:

46

Entergy Corporation and Subsidiaries

Notes to Financial Statements

For further information on the Medicare Act refer to Note 11 to the financial statements in the Form 10-K.

Entergy's reportable segments as of ~~March 31,~~June 30, 2010 are Utility and Non-Utility Nuclear. Utility generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and provides natural gas utility service in portions of Louisiana. Non-Utility Nuclear owns and operates six nuclear power plants and is primarily focused on selling electric power produced by those plants to wholesale customers. "All Other" includes the parent company, Entergy Corporation, and other business activity, including the non-nuclear wholesale assets business, and earnings on the proceeds of sales of previously-owned businesses.

Utility

Non-Utility
Nuclear*

All Other*

Eliminations

Consolidated
(In Thousands)
2010
Operating revenues $2,103,829 $613,776 $48,581 ($6,839) $2,759,347
Income taxes (benefit) $89,970 $86,205 ($28,490) $- $147,685
Consolidated net income (loss) $142,971 $94,226 ($24) ($18,359) $218,814
Total assets $29,253,077 $9,405,822 $1,329,834 ($1,927,323) $38,061,410

2009
Operating revenues $2,102,206 $656,187 $37,742 ($7,023) $2,789,112
Income taxes (benefit) $73,464 $102,077 ($12,495) $- $163,046
Consolidated net income (loss) $115,968 $180,882 ($38,158) ($18,359) $240,333
Total assets $28,658,115 $8,136,681 $2,175,033 ($2,357,242) $36,612,587
Entergy's segment financial information for the six months ended June 30, 2010 and 2009 is as follows:

On April 5, 2010, Entergy announced that, effective immediately, it plans to unwind the business infrastructure associated with its proposed plan to spin-off its Non-Utility Nuclear business. As a result of the plan to unwind the business infrastructure, Entergy has recorded expenses in the Non-Utility Nuclear segment, almost entirely in the first quarter 2010, ~~in the Non-Utility Nuclear segment~~ for the write-off of certain capitalized costs incurred in connection with the planned spin-off transaction. Other operation and maintenance expenses include the write-off of $32 million of capital costs, primarily for software that will not be utilized. Interest charges include the write-off of ~~$37~~$39 million of debt financing costs, primarily incurred for Enexus's $1.2 billion credit facility. Entergy expects that it will incur approximately ~~$50~~$40 million, after-tax, in additional expenses in unwinding this business, primarily through the remainder of 2010, including additional write-offs, dis-synergies, and certain other costs.

The Registrant Subsidiaries have one reportable segment, which is an integrated utility business, except for System Energy, which is an electricity generation business. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial effect of cost-based rates and regulatory oversight on the business process, cost structures, and operating results.

The fair values of Entergy's derivative instruments in the consolidated balance sheet as of ~~March 31,~~June 30, 2010 are as follows:

The fair values of Entergy's derivative instruments in the consolidated balance sheet as of December 31, 2009 are as follows:

The effect of Entergy's derivative instruments designated as cash flow hedges on the consolidated statements of income for the three months ended ~~March 31,~~June 30, 2010 and 2009 is as follows:

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

32

Entergy Corporation and Subsidiaries

Notes to Financial Statements

One provision of the new law that is effective in 2013 eliminates the federal income tax deduction for prescription drug expenses of Medicare beneficiaries for which the plan sponsor also receives the retiree drug subsidy under Part D. Entergy receives subsidy payments under the Medicare Part D plan and therefore in the first quarter 2010 recorded a reduction to the deferred tax asset related to the unfunded other postretirement benefit obligation. The offset was recorded as a charge to income tax expense or, for the Utility, including each Registrant Subsidiary, as a regulatory asset. The Utility has a regulatory asset of $99 million recorded for this, including $31 million at Entergy Arkansas, $16 million at Entergy Gulf States Louisiana, $19 million at Entergy Louisiana, $10 million at Entergy Mississippi, $7 million at Entergy New Orleans, $11 million at Entergy Texas, and $5 million at System Energy.

2009 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $144.3 $- $- $144.3
Decommissioning trust funds:
Equity securities 6.7 175.5 - 182.2
Debt securities 25.3 142.0 - 167.3
Gas hedge contracts 2.1 - - 2.1
$178.4 $317.5 $- $495.9
See Note 2 to the financial statements in the Form 10-K for information regarding retail rate proceedings involving the Utility operating companies. The following are updates to the Form 10-K.

As discussed in the Form 10-K, on September 4, 2009, Entergy Arkansas filed with the APSC for a general change in rates, charges, and tariffs. In June 2010 the APSC approved a settlement and subsequent compliance tariffs that provide for a $63.7 million rate increase, effective for bills rendered for the first billing cycle of July 2010. The settlement provides for a 10.2% return on common equity. Entergy Arkansas's proposed formula rate plan mechanism, including a recovery mechanism for APSC-approved costs for additional capacity purchases or construction/acquisition of new transmission or generating facilities, was not adopted under the settlement.

See the Form 10-K for a discussion of Entergy Gulf States Louisiana’s formula rate plan that the LPSC approved for the 2008, 2009, and 2010 test years. Entergy Gulf States Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.65% return on equity for the 2008 test year. The rate reset, a $44.3 million increase that includes a $36.9 million cost of service adjustment, plus $7.4 million net for increased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In January 2010, Entergy Gulf States Louisiana implemented an additional $23.9 million rate increa se pursuant to a special rate implementation filing made in December 2009, primarily for incremental capacity costs approved by the LPSC. In May 2010, Entergy Gulf States Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and requested that the LPSC accept the report, which will result in a $0.8 million reduction in current rates effective in the June 2010 billing cycle and a $0.5 million refund. At its May 19, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflects a 10.25% 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 does reflect, however, consistent with a December 2009 filing, a $9.7 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the LPSC-regulated 70% share of River Bend, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. Currently, Entergy Gulf States Louisiana's retail rates contain no amount for decommissioning funding. The filing also re flects a $20.8 million rate increase for incremental capacity costs. In July 2010 the LPSC approved a $7.8 million increase in the revenue requirement for decommissioning, effective September 2010. Other issues in the formula rate plan proceeding remain pending.

33

Entergy Corporation and Subsidiaries

Notes to Financial Statements

See the Form 10-K for a discussion of Entergy Louisiana’s formula rate plan that the LPSC approved for the 2008, 2009, and 2010 test years. Entergy Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.25% return on equity for the 2008 test year. The rate reset, a $2.5 million increase that includes a $16.3 million cost of service adjustment less a $13.8 million net reduction for decreased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In April 2010, Entergy Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and r equested that the LPSC accept the report, which will result in a $0.1 million reduction in current rates effective in the May 2010 billing cycle and a $0.1 million refund. In addition, Entergy Louisiana will move the recovery of approximately $12.5 million of capacity costs from fuel adjustment clause recovery to base rate recovery. At its April 21, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflects a 10.82% 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 does reflect, however, consistent with a December 2009 filing, a $7.9 million revenue requirement increase to provide supplemental funding for the decommissioning trust maintained for Waterford 3, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. Currently, Entergy Louisiana has $2.2 million in retail rates for decommissioning funding. The filing also reflects a $7.4 million rate decrease for increm ental capacity costs. In July 2010 the LPSC approved a $3.5 million increase in the retail revenue requirement for decommissioning, effective September 2010. Other issues in the formula rate plan proceeding remain pending.

In September 2009, Entergy Mississippi filed with the MPSC proposed modifications to its formula rate plan rider. In March 2010 the MPSC issued an order: (1) providing the opportunity for a reset of Entergy Mississippi's return on common equity to a point within the formula rate plan bandwidth and eliminating the 50/50 sharing that had been in the plan, (2) modifying the performance measurement process, and (3) replacing the revenue change limit of two percent of revenues, which was subject to a $14.5 million revenue adjustment cap, with a limit of four percent of revenues, although any adjustment above two percent requires a hearing before the MPSC. The MPSC did not approve Entergy Mississippi's request to use a projected test year for its annua l scheduled formula rate plan filing and, therefore, Entergy Mississippi will continue to use a historical test year for its annual evaluation reports under the plan.

As discussed in the Form 10-K, in March 2010, Entergy Mississippi submitted its 2009 test year filing, its first annual filing under the new formula rate plan rider. In June 2010 the MPSC approved a joint stipulation between Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates, but does provide for the deferral as a regulatory asset of $3.9 million of legal expenses associated with certain litigation involving the Mississippi Attorney General, as well as ongoing legal expenses in that litigation until the litigation is resolved.

In May 2010, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports. The filings request a $12.8 million electric base revenue decrease and a $2.4 million gas base revenue increase. The new rates would be effective with the first billing cycle in October 2010. The City Council and its Advisors' review and consideration of these filings is pending.

34

Entergy Corporation and Subsidiaries

Notes to Financial Statements

As discussed in the Form 10-K, in December 2009, Entergy Texas filed a rate case requesting a $198.7 million increase reflecting an 11.5% return on common equity based on an adjusted June 2009 test year. The filing includes a proposed cost of service adjustment rider with a three-year term beginning with the 2010 calendar year as the initial evaluation period. Key provisions include a plus or minus 15 basis point bandwidth, with earnings outside the bandwidth reset to the bottom or top of the band and rates changing prospectively depending upon whether Entergy Texas is under or over-earning. The annual change in revenue requirement is limited to a percentage change in the Consumer Price Index for urban areas, and the filing includes a provision for extrao rdinary events greater than $10 million per year that would be considered separately. The filing also proposes a purchased power recovery rider and a competitive generation service tariff and will establish test year baseline values to be used in the transmission cost recovery factor rider authorized for use by Entergy Texas in the 2009 legislative session. The rate case also includes a $2.8 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the 70% share of River Bend for which Entergy Texas retail customers are responsible, in response to an NRC notification of a projected shortfall of decommissioning funding assurance. Beginning in May 2010, Entergy Texas implemented a $17.5 million interim rate increase, subject to refund. Intervenors and PUCT Staff filed testimony opposing the riders discussed above and recommended disallowances that would result in a maximum rate increase of, based on the PUCT Staff’ s testimony, $58 million. Hearings regarding the merits of the competitive generation service tariff, which was a proposal required by law that would allow certain larger customers to obtain alternative generation supply, were held in July 2010, and this issue is pending a PUCT decision.

The parties filed a settlement in August 2010 intended to resolve the other issues in the rate case proceeding. The settlement provides for a $59 million base rate increase for electricity usage beginning August 15, 2010, with an additional increase of $9 million for bills rendered beginning May 2, 2011. The settlement stipulates an authorized return on equity of 10.125%. The settlement provides that Entergy Texas's proposed cost of service adjustment rider, purchased power recovery rider, and transmission cost recovery factors will not be approved in the rate case proceeding, although baseline values were established to be used in Entergy Texas's request for a transmission recovery factor that will be made in a separate procee ding. The settlement states that Entergy Texas's fuel costs for the period April 2007 through June 2009 are reconciled, with $3.25 million of disallowed costs. The settlement also sets River Bend decommissioning costs at $2.0 million annually. The current jurisdictional deadline by which the PUCT is required to issue a final order in this proceeding is November 1, 2010.

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

During the six months ended June 30, 2010, Entergy Corporation issued 192,906 shares of its previously repurchased common stock to satisfy stock option exercises and other stock-based awards. Also during the six months ended June 30, 2010, Entergy Corporation purchased 1,816,000 shares of common stock for a total purchase price of $137.7 million.

On July 30, 2010, Entergy Corporation's Board of Directors declared a common stock dividend of $0.83 per share, payable on September 1, 2010 to holders of record as of August 12, 2010.

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 expires in August 2012 and has a borrowing capacity of approximately $3.5 billion. 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 0.09% 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 six months ended June 30, 2010 was 0.713% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of June 30, 2010.

Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas each had credit facilities available as of June 30, 2010 as follows:

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

See Note 12 to the financial statements for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIE) effective in the first quarter 2010. The variable interest entities have short-term credit facilities and also issue commercial paper to finance the acquisition and ownership of nuclear fuel as follows as of June 30, 2010:

The amount outstanding on these credit facilities and commercial paper issuances are presented as Notes payable on the balance sheets. The commitment fees on the credit facilities are 0.10% of the commitment amount. Each credit facility requires the respective lessee (Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, or System Energy) to maintain a consolidated debt ratio of 70% or less of its total capitalization. In July 2010, each of these credit facilities were refinanced with new credit facilities, each in the same amount and with expiration dates of July 2013.

The variable interest entities had long-term notes payable that are included in long-term debt on the respective balance sheets as of June 30, 2010 as follows:

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

On June 1, 2010, Entergy Arkansas paid, at maturity, its $100 million of 4.50% Series first mortgage bonds.

In March 2010, Entergy Louisiana issued $150 million of 6.0% Series first mortgage bonds due March 2040. Entergy Louisiana used the proceeds in April 2010, together with other available funds, to redeem, prior to maturity, all of its $150 million 7.60% Series first mortgage bonds, due April 2032. Because the proceeds were deposited directly with a trustee and not held by Entergy Louisiana, the bond issuance and redemption are reported as non-cash financing activity on the cash flow statement.

On June 1, 2010, Entergy Louisiana paid, at maturity, its $55 million of 4.670% Series first mortgage bonds.

In April 2010, Entergy Mississippi issued $80 million of 6.20% Series first mortgage bonds due April 2040. Entergy Mississippi used the proceeds, together with other available funds, to redeem, prior to maturity, all of its $100 million 7.25% Series first mortgage bonds, due December 2032.

Pursuant to its plan of reorganization, in May 2007, Entergy New Orleans issued notes due in three years in satisfaction of its affiliate prepetition accounts payable (approximately $74 million, including interest), including its indebtedness to the Entergy System money pool. In May 2010, Entergy New Orleans repaid, at maturity, the notes payable.

On July 1, 2010, Entergy New Orleans paid, at maturity, its $30 million of 4.98% Series first mortgage bonds.

39

Entergy Corporation and Subsidiaries

Notes to Financial Statements

In May 2010, Entergy Texas issued $200 million of 3.60% Series mortgage bonds due June 2015. Entergy Texas used a portion of the proceeds to pay prior to maturity Entergy Texas' remaining obligations (with interest rates ranging from 4.875% to 6.18% per annum and maturities ranging from November 1, 2011 to March 1, 2035) pursuant to the debt assumption agreement with Entergy Gulf States Louisiana.

In May 2010, Entergy Corporation repaid, at maturity, its $75 million 6.58% notes payable.

In June 2010, Entergy Corporation repaid, at maturity, its $60 million bank term loan.

The book value and the fair value of long-term debt for Entergy Corporation and the Registrant Subsidiaries as of June 30, 2010 are as follows:

Entergy grants stock options, 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.

Entergy granted 1,407,900 stock options during the first quarter 2010 with a weighted-average fair value of $13.18. At June 30, 2010, there were 12,404,064 stock options outstanding with a weighted-average exercise price of $70.73. The aggregate intrinsic value of the stock options outstanding at June 30, 2010 was $11.1 million.

The Registrant Subsidiaries recognized the following pension cost for their non-qualified pension plans in the second quarters of 2010 and 2009:

Entergy's other postretirement benefit cost, including amounts capitalized, for the second quarters of 2010 and 2009, included the following components:

Based on current assumptions, Entergy expects to contribute $254 million to its qualified pension plans in 2010. Guidance pursuant to the Pension Protection Act of 2006 rules, effective for the 2009 plan year and beyond, may affect the level of Entergy’s pension contributions in the future. As of the end of July 2010, Entergy had contributed $159 million to its pension plans. Therefore, Entergy presently anticipates contributing an additional $95 million to fund its qualified pension plans in 2010.

Based on actuarial analysis, the estimated effect of future Medicare subsidies reduced the December 31, 2009 Accumulated Postretirement Benefit Obligation (APBO) by $215 million, and reduced the second quarter 2010 and 2009 other postretirement benefit cost by $6.6 million and $6.0 million, respectively. It reduced the six months ended June 30, 2010 and 2009 other postretirement benefit cost by $13.3 million and $12.0 million, respectively. In the second quarter 2010, Entergy received $0.6 million in Medicare subsidies for prescription drug claims. In the six months ended June 30, 2010, Entergy received $1.8 million in Medicare subsidies for prescription drug claims.

Based on actuarial analysis, the estimated effect of future Medicare subsidies reduced the December 31, 2009 APBO and the second quarters 2010 and 2009 other postretirement benefit cost and the six months ended June 30, 2010 and 2009 other postretirement benefit cost for the Registrant Subsidiaries as follows:

46

Entergy Corporation and Subsidiaries

Notes to Financial Statements

For further information on the Medicare Act refer to Note 11 to the financial statements in the Form 10-K.

Entergy's reportable segments as of June 30, 2010 are Utility and Non-Utility Nuclear. Utility generates, transmits, distributes, and sells electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and provides natural gas utility service in portions of Louisiana. Non-Utility Nuclear owns and operates six nuclear power plants and is primarily focused on selling electric power produced by those plants to wholesale customers. "All Other" includes the parent company, Entergy Corporation, and other business activity, including the non-nuclear wholesale assets business, and earnings on the proceeds of sales of previously-owned businesses.

Entergy's segment financial information for the six months ended June 30, 2010 and 2009 is as follows:

On April 5, 2010, Entergy announced that, effective immediately, it plans to unwind the business infrastructure associated with its proposed plan to spin-off its Non-Utility Nuclear business. As a result of the plan to unwind the business infrastructure, Entergy has recorded expenses in the Non-Utility Nuclear segment, almost entirely in the first quarter 2010, for the write-off of certain capitalized costs incurred in connection with the planned spin-off transaction. Other operation and maintenance expenses include the write-off of $32 million of capital costs, primarily for software that will not be utilized. Interest charges include the write-off of $39 million of debt financing costs, primarily incurred for Enexus's $1.2 billion credit facility. Entergy expects that it will incur approximately $40 million, after-tax, in additional expenses in unwinding this business, primarily through the remainder of 2010, including additional write-offs, dis-synergies, and certain other costs.

The Registrant Subsidiaries have one reportable segment, which is an integrated utility business, except for System Energy, which is an electricity generation business. The Registrant Subsidiaries' operations are managed on an integrated basis because of the substantial effect of cost-based rates and regulatory oversight on the business process, cost structures, and operating results.

The fair values of Entergy's derivative instruments in the consolidated balance sheet as of June 30, 2010 are as follows:

The fair values of Entergy's derivative instruments in the consolidated balance sheet as of December 31, 2009 are as follows:

The effect of Entergy's derivative instruments designated as cash flow hedges on the consolidated statements of income for the three months ended June 30, 2010 and 2009 is as follows:

Electricity over-the-counter swaps that financially settle against day-ahead power pool prices are used to manage price exposure for Non-Utility Nuclear generation. Based on market prices as of June 30, 2010, cash flow hedges relating to power sales totaled $297 million of net gains, of which approximately $178 million are 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, however, could vary due to future changes in market prices. Gains totaling approximately $67 million and $103 million were realized on the maturity of cash flow hedges for the three months ended June 30, 2010 and for the six months ended June 30, 2010, respectively . Unrealized gains or losses recorded in OCI result from hedging power output at the Non-Utility Nuclear 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 for forecasted power transactions at June 30, 2010 is approximately four years. Planned generation currently sold forward from Non-Utility Nuclear power plants is 91% for the remaining two quarters of 2010 of which approximately 40% is sold under financial hedges and the remainder under normal purchase/sale contracts. The ineffective portion of the change in the value of Entergy's cash flow hedges during the three and six months ended June 30, 2010 and 2009 was insignificant. Certain of the agreements to sell the power produced by Entergy's Non-Utility Nuclear power plants contain provisions that require an Entergy subsidiary to provide col lateral 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 June 30, 2010, hedge contracts with

51

Entergy Corporation and Subsidiaries

Notes to Financial Statements

three counterparties were in a liability position (approximately $11 million total), but were significantly below the amounts of guarantees provided under their contracts and no cash collateral was required. If the Entergy Corporation credit rating falls below investment grade, the impact 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. From time to time, 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. 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 offsetti ng contract are recorded to assets or liabilities on the balance sheet and offset as they flow through to earnings.

The effect of Entergy's derivative instruments not designated as hedging instruments on the consolidated statements of income for the three months ended June 30, 2010 and 2009 is as follows:

The effect of Entergy's derivative instruments not designated as hedging instruments on the consolidated statements of income for the six months ended June 30, 2010 and 2009 is as follows:

The fair values of the Registrant Subsidiaries' derivative instruments on their balance sheets as of June 30, 2010 are as follows:

The fair values of the Registrant Subsidiaries' derivative instruments on their balance sheets as of December 31, 2009 are as follows:

The effects of the Registrant Subsidiaries' derivative instruments not designated as hedging instruments on their statements of income for the three months ended June 30, 2010 and 2009 are as follows:

The effects of the Registrant Subsidiaries' derivative instruments not designated as hedging instruments on their statements of income for the six months ended June 30, 2010 and 2009 are as follows:

The estimated fair values of Entergy's financial instruments and derivatives are determined using bid prices and market quotes. 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 natural gas swaps held by regulated 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 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:

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

One provision of the new law that is effective in 2013 eliminates the federal income tax deduction for prescription drug expenses of Medicare beneficiaries for which the plan sponsor also receives the retiree drug subsidy under Part D. Entergy receives subsidy payments under the Medicare Part D plan and therefore in the first quarter 2010 recorded a reduction to the deferred tax asset related to the unfunded other postretirement benefit obligation. The offset was recorded as a charge to income tax expense or, for the Utility, including each Registrant Subsidiary, as a regulatory asset. The Utility has a regulatory asset of $99 million recorded for this, including $31 million at Entergy Arkansas, $16 million at Entergy Gulf States Louisiana, $19 million at Entergy Louisiana, $10 million at Entergy Mississippi, $7 million at Entergy New Orleans, $11 million at Entergy Texas, and $5 million at System Energy.

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

As discussed in the Form 10-K, on September 4, 2009, Entergy Arkansas filed with the APSC for a general change in rates, charges, and tariffs. In June 2010 the APSC approved a settlement and subsequent compliance tariffs that provide for a $63.7 million rate increase, effective for bills rendered for the first billing cycle of July 2010. The settlement provides for a 10.2% return on common equity. Entergy Arkansas's proposed formula rate plan mechanism, including a recovery mechanism for APSC-approved costs for additional capacity purchases or construction/acquisition of new transmission or generating facilities, was not adopted under the settlement.

See the Form 10-K for a discussion of Entergy Gulf States Louisiana’s formula rate plan that the LPSC approved for the 2008, 2009, and 2010 test years. Entergy Gulf States Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.65% return on equity for the 2008 test year. The rate reset, a $44.3 million increase that includes a $36.9 million cost of service adjustment, plus $7.4 million net for increased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In January 2010, Entergy Gulf States Louisiana implemented an additional $23.9 million rate increa se pursuant to a special rate implementation filing made in December 2009, primarily for incremental capacity costs approved by the LPSC. In May 2010, Entergy Gulf States Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and requested that the LPSC accept the report, which will result in a $0.8 million reduction in current rates effective in the June 2010 billing cycle and a $0.5 million refund. At its May 19, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Gulf States Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflects a 10.25% 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 does reflect, however, consistent with a December 2009 filing, a $9.7 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the LPSC-regulated 70% share of River Bend, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. Currently, Entergy Gulf States Louisiana's retail rates contain no amount for decommissioning funding. The filing also re flects a $20.8 million rate increase for incremental capacity costs. In July 2010 the LPSC approved a $7.8 million increase in the revenue requirement for decommissioning, effective September 2010. Other issues in the formula rate plan proceeding remain pending.

33

Entergy Corporation and Subsidiaries

Notes to Financial Statements

See the Form 10-K for a discussion of Entergy Louisiana’s formula rate plan that the LPSC approved for the 2008, 2009, and 2010 test years. Entergy Louisiana, effective with the November 2009 billing cycle, reset its rates to achieve a 10.25% return on equity for the 2008 test year. The rate reset, a $2.5 million increase that includes a $16.3 million cost of service adjustment less a $13.8 million net reduction for decreased capacity costs and a base rate reclassification, was implemented for the November 2009 billing cycle, and the rate reset was subject to refund pending review of the 2008 test year filing that was made in October 2009. In April 2010, Entergy Louisiana and the LPSC staff submitted a joint report on the 2008 test year filing and r equested that the LPSC accept the report, which will result in a $0.1 million reduction in current rates effective in the May 2010 billing cycle and a $0.1 million refund. In addition, Entergy Louisiana will move the recovery of approximately $12.5 million of capacity costs from fuel adjustment clause recovery to base rate recovery. At its April 21, 2010 meeting, the LPSC accepted the joint report.

In May 2010, Entergy Louisiana made its formula rate plan filing with the LPSC for the 2009 test year. The filing reflects a 10.82% 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 does reflect, however, consistent with a December 2009 filing, a $7.9 million revenue requirement increase to provide supplemental funding for the decommissioning trust maintained for Waterford 3, in response to a NRC notification of a projected shortfall of decommissioning funding assurance. Currently, Entergy Louisiana has $2.2 million in retail rates for decommissioning funding. The filing also reflects a $7.4 million rate decrease for increm ental capacity costs. In July 2010 the LPSC approved a $3.5 million increase in the retail revenue requirement for decommissioning, effective September 2010. Other issues in the formula rate plan proceeding remain pending.

In September 2009, Entergy Mississippi filed with the MPSC proposed modifications to its formula rate plan rider. In March 2010 the MPSC issued an order: (1) providing the opportunity for a reset of Entergy Mississippi's return on common equity to a point within the formula rate plan bandwidth and eliminating the 50/50 sharing that had been in the plan, (2) modifying the performance measurement process, and (3) replacing the revenue change limit of two percent of revenues, which was subject to a $14.5 million revenue adjustment cap, with a limit of four percent of revenues, although any adjustment above two percent requires a hearing before the MPSC. The MPSC did not approve Entergy Mississippi's request to use a projected test year for its annua l scheduled formula rate plan filing and, therefore, Entergy Mississippi will continue to use a historical test year for its annual evaluation reports under the plan.

As discussed in the Form 10-K, in March 2010, Entergy Mississippi submitted its 2009 test year filing, its first annual filing under the new formula rate plan rider. In June 2010 the MPSC approved a joint stipulation between Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates, but does provide for the deferral as a regulatory asset of $3.9 million of legal expenses associated with certain litigation involving the Mississippi Attorney General, as well as ongoing legal expenses in that litigation until the litigation is resolved.

In May 2010, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports. The filings request a $12.8 million electric base revenue decrease and a $2.4 million gas base revenue increase. The new rates would be effective with the first billing cycle in October 2010. The City Council and its Advisors' review and consideration of these filings is pending.

34

Entergy Corporation and Subsidiaries

Notes to Financial Statements

As discussed in the Form 10-K, in December 2009, Entergy Texas filed a rate case requesting a $198.7 million increase reflecting an 11.5% return on common equity based on an adjusted June 2009 test year. The filing includes a proposed cost of service adjustment rider with a three-year term beginning with the 2010 calendar year as the initial evaluation period. Key provisions include a plus or minus 15 basis point bandwidth, with earnings outside the bandwidth reset to the bottom or top of the band and rates changing prospectively depending upon whether Entergy Texas is under or over-earning. The annual change in revenue requirement is limited to a percentage change in the Consumer Price Index for urban areas, and the filing includes a provision for extrao rdinary events greater than $10 million per year that would be considered separately. The filing also proposes a purchased power recovery rider and a competitive generation service tariff and will establish test year baseline values to be used in the transmission cost recovery factor rider authorized for use by Entergy Texas in the 2009 legislative session. The rate case also includes a $2.8 million revenue requirement to provide supplemental funding for the decommissioning trust maintained for the 70% share of River Bend for which Entergy Texas retail customers are responsible, in response to an NRC notification of a projected shortfall of decommissioning funding assurance. Beginning in May 2010, Entergy Texas implemented a $17.5 million interim rate increase, subject to refund. Intervenors and PUCT Staff filed testimony opposing the riders discussed above and recommended disallowances that would result in a maximum rate increase of, based on the PUCT Staff’ s testimony, $58 million. Hearings regarding the merits of the competitive generation service tariff, which was a proposal required by law that would allow certain larger customers to obtain alternative generation supply, were held in July 2010, and this issue is pending a PUCT decision.

The parties filed a settlement in August 2010 intended to resolve the other issues in the rate case proceeding. The settlement provides for a $59 million base rate increase for electricity usage beginning August 15, 2010, with an additional increase of $9 million for bills rendered beginning May 2, 2011. The settlement stipulates an authorized return on equity of 10.125%. The settlement provides that Entergy Texas's proposed cost of service adjustment rider, purchased power recovery rider, and transmission cost recovery factors will not be approved in the rate case proceeding, although baseline values were established to be used in Entergy Texas's request for a transmission recovery factor that will be made in a separate procee ding. The settlement states that Entergy Texas's fuel costs for the period April 2007 through June 2009 are reconciled, with $3.25 million of disallowed costs. The settlement also sets River Bend decommissioning costs at $2.0 million annually. The current jurisdictional deadline by which the PUCT is required to issue a final order in this proceeding is November 1, 2010.

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

During the six months ended June 30, 2010, Entergy Corporation issued 192,906 shares of its previously repurchased common stock to satisfy stock option exercises and other stock-based awards. Also during the six months ended June 30, 2010, Entergy Corporation purchased 1,816,000 shares of common stock for a total purchase price of $137.7 million.

On July 30, 2010, Entergy Corporation's Board of Directors declared a common stock dividend of $0.83 per share, payable on September 1, 2010 to holders of record as of August 12, 2010.

NOTE ~~9. DECOMMISSIONING TRUST FUNDS~~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 expires in August 2012 and has a borrowing capacity of approximately $3.5 billion. 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 0.09% 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 six months ended June 30, 2010 was 0.713% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of June 30, 2010.

Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas each had credit facilities available as of June 30, 2010 as follows:

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

See Note 12 to the financial statements for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIE) effective in the first quarter 2010. The variable interest entities have short-term credit facilities and also issue commercial paper to finance the acquisition and ownership of nuclear fuel as follows as of June 30, 2010:

The amount outstanding on these credit facilities and commercial paper issuances are presented as ~~available-for-sale, in nuclear decommissioning trust accounts.~~Notes payable on the balance sheets. The ~~NRC~~commitment fees on the credit facilities are 0.10% of the commitment amount. Each credit facility requires the respective lessee (Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, or System Energy) to maintain ~~trusts~~a consolidated debt ratio of 70% or less of its total capitalization. In July 2010, each of these credit facilities were refinanced with new credit facilities, each in the same amount and with expiration dates of July 2013.

The variable interest entities had long-term notes payable that are included in long-term debt on the ~~costs~~respective balance sheets as of ~~decommissioning ANO~~June 30, 2010 as follows:

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

On June 1, ~~ANO 2, River Bend, Waterford 3, Grand~~2010, Entergy Arkansas paid, at maturity, its $100 million of 4.50% Series first mortgage bonds.

In March 2010, Entergy Louisiana issued $150 million of 6.0% Series first mortgage bonds due March 2040. Entergy Louisiana used the proceeds in April 2010, together with other available funds, to redeem, prior to maturity, all of its $150 million 7.60% Series first mortgage bonds, due April 2032. Because the proceeds were deposited directly with a trustee and not held by Entergy Louisiana, the bond issuance and redemption are reported as non-cash financing activity on the cash flow statement.

On June 1, 2010, Entergy Louisiana paid, at maturity, its $55 million of 4.670% Series first mortgage bonds.

In April 2010, Entergy Mississippi issued $80 million of 6.20% Series first mortgage bonds due April 2040. Entergy Mississippi used the proceeds, together with other available funds, to redeem, prior to maturity, all of its $100 million 7.25% Series first mortgage bonds, due December 2032.

Pursuant to its plan of reorganization, in May 2007, Entergy New Orleans issued notes due in three years in satisfaction of its affiliate prepetition accounts payable (approximately $74 million, including interest), including its indebtedness to the Entergy System money pool. In May 2010, Entergy New Orleans repaid, at maturity, the notes payable.

On July 1, 2010, Entergy New Orleans paid, at maturity, its $30 million of 4.98% Series first mortgage bonds.

39

Entergy Corporation and Subsidiaries

Notes to Financial Statements

In May 2010, Entergy Texas issued $200 million of 3.60% Series mortgage bonds due June 2015. Entergy Texas used a portion of the proceeds to pay prior to maturity Entergy Texas' remaining obligations (with interest rates ranging from 4.875% to 6.18% per annum and maturities ranging from November 1, 2011 to March 1, 2035) pursuant to the debt assumption agreement with Entergy Gulf ~~Pilgrim, Indian Point 1~~States Louisiana.

In May 2010, Entergy Corporation repaid, at maturity, its $75 million 6.58% notes payable.

In June 2010, Entergy Corporation repaid, at maturity, its $60 million bank term loan.

The book value and ~~2, Vermont Yankee,~~the fair value of long-term debt for Entergy Corporation and ~~Palisades (NYPA currently retains~~ the ~~decommissioning trusts~~Registrant Subsidiaries as of June 30, 2010 are as follows:

Entergy ~~records decommissioning trust funds on~~grants stock options, which are described more fully in Note 12 to the ~~balance sheet at their fair value. Because~~financial statements in the Form 10-K. Awards under Entergy's plans generally vest over three years.

Entergy granted 1,407,900 stock options during the first quarter 2010 with a weighted-average fair value of $13.18. At June 30, 2010, there were 12,404,064 stock options outstanding with a weighted-average exercise price of $70.73. The aggregate intrinsic value 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,stock options outstanding at June 30, 2010 was $11.1 million.

The Registrant Subsidiaries recognized the following pension cost for ~~sale. Unrealized losses (where cost exceeds fair market value) on the assets in these trust funds are also recorded~~their non-qualified pension plans in the ~~accumulated other comprehensive income component~~second quarters of ~~shareholders' equity unless the unrealized loss is other than temporary~~2010 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.2009: