ENTERGY NEW ORLEANS, LLC - Quarter Report: 2003 March (Form 10-Q)

Cash flow from operations increased $59.5 million in the first quarter of 2003 compared to the first quarter of 2002 primarily due to money pool activity. System Energy's receivables from or (payables) to the money pool were as follows:

Money pool activity increased System Energy's operating cash flows by $61.4 million in the first quarter of 2003. System Energy's cash balance is currently very low as a result of providing the cash collateral discussed below in "investing activities," and it also borrowed money from the money pool in the first quarter 2003 as a result.  Going forward, management expects System Energy to meet its working capital needs with operating cash flow, and it also has sufficient additional borrowing capacity from the money pool for its foreseeable working capital needs, if necessary. System Energy has historically generated positive cash flow from operations and management expects System Energy's balance payable to the money pool to decline over the remainder of 2003. In the first quarter of 2002, money pool activity decreased System Energy's operating cash flows by $15.8 million. See Note 4 to the domestic utility companies and System Energy financial statements in the Form 10-K for a description of the money pool.

Investing activities used cash in the first quarter of 2003 compared to providing a small amount of cash in the first quarter of 2002 primarily due to cash collateral of $193 million provided in March 2003. System Energy had three-year letters of credit in place that were scheduled to expire in March 2003 securing certain of its obligations related to the sale-leaseback of a portion of Grand Gulf 1. System Energy replaced the letters of credit with new three-year letters of credit totaling approximately $198 million that are backed by cash collateral.

The decrease of $19.6 million in net cash used by financing activities for the first quarter of 2003 compared to the first quarter of 2002 was primarily due to a decrease of $19.5 million in the January principal payment made on the Grand Gulf 1 sale-leaseback.

See "Management's Discussion and Analysis - Liquidity and Capital Resources" in the Form 10-K for a discussion of System Energy's uses and sources of capital.

See "Management's Discussion and Analysis - Significant Factors and Known Trends" in the Form 10-K for a discussion of market and credit risks, nuclear matters, litigation risks, and environmental risks.

See "Management's Discussion and Analysis - Critical Accounting Estimates" in the Form 10-K for a discussion of the estimates and judgments necessary in System Energy's accounting for nuclear decommissioning costs and pension and other retirement costs.

As discussed in the Form 10-K, System Energy implemented SFAS 143, "Accounting for Asset Retirement Obligations," effective January 1, 2003. The net effect of implementing this standard for System Energy was recorded as a regulatory asset, with no resulting impact on System Energy's net income. Assets and liabilities increased by approximately $138 million in 2003 as a result of recording the asset retirement obligation at its fair value of $292 million as determined under SFAS 143, reversing the previously recorded decommissioning liability of $154 million, increasing utility plant by $82 million, increasing accumulated depreciation by $36 million, and recording the related regulatory asset of $92 million.

                        SYSTEM ENERGY RESOURCES, INC.
                             INCOME STATEMENTS
             For the Three Months Ended March 31, 2003 and 2002
                                (Unaudited)

                                                           2003         2002
                                                             (In Thousands)

                 OPERATING REVENUES
Domestic electric                                         $141,985     $142,330
                                                          --------     --------
                 OPERATING EXPENSES
Operation and Maintenance:
   Fuel, fuel-related expenses, and
     gas purchased for resale                               10,178        9,604
   Nuclear refueling outage expenses                         2,992        2,620
   Other operation and maintenance                          20,746       19,213
Decommissioning                                              5,450        4,014
Taxes other than income taxes                                5,974        6,716
Depreciation and amortization                               26,588       27,297
Other regulatory charges - net                              14,318       12,926
                                                          --------     --------
TOTAL                                                       86,246       82,390
                                                          --------     --------

OPERATING INCOME                                            55,739       59,940
                                                          --------     --------

                    OTHER INCOME
Allowance for equity funds used during construction            269          550
Interest and dividend income                                 1,926          480
Miscellaneous - net                                           (574)        (361)
                                                          --------     --------
TOTAL                                                        1,621          669
                                                          --------     --------

             INTEREST AND OTHER CHARGES
Interest on long-term debt                                  14,701       15,107
Other interest - net                                           573          785
Allowance for borrowed funds used during construction          (95)        (232)
                                                          --------     --------
TOTAL                                                       15,179       15,660
                                                          --------     --------

INCOME BEFORE INCOME TAXES                                  42,181       44,949

Income taxes                                                18,446       18,222
                                                          --------     --------

NET INCOME                                                 $23,735      $26,727
                                                          ========     ========

See Notes to Respective Financial Statements.

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                         SYSTEM ENERGY RESOURCES, INC.
                           STATEMENTS OF CASH FLOWS
              For the Three Months Ended March 31, 2003 and 2002
                                 (Unaudited)

                                                                   2003        2002
                                                                    (In Thousands)

                  OPERATING ACTIVITIES
Net income                                                         $23,735     $26,727
Noncash items included in net income:
  Other regulatory charges - net                                    14,318      12,926
  Depreciation, amortization, and decommissioning                   32,038      31,311
  Deferred income taxes and investment tax credits                  (7,946)    (12,124)
  Allowance for equity funds used during construction                 (269)       (550)
Changes in working capital:
  Receivables                                                       21,795      (3,000)
  Accounts payable                                                  47,190      (1,192)
  Taxes accrued                                                     11,235      14,918
  Interest accrued                                                 (25,951)    (28,374)
  Other working capital accounts                                    (1,940)     (1,338)
Provision for estimated losses and reserves                           (298)       (273)
Changes in other regulatory assets                                   9,045       8,646
Other                                                                  (85)     15,699
                                                                  --------    --------
Net cash flow provided by operating activities                     122,867      63,376
                                                                  --------    --------

                  INVESTING ACTIVITIES
Construction expenditures                                           (2,697)     (7,551)
Allowance for equity funds used during construction                    269         550
Decommissioning trust contributions and realized
    change in trust assets                                          (5,669)       (785)
Changes in other temporary investments - net                             -      22,354
Increase in other investments                                     (192,947)          -
                                                                  --------    --------
Net cash flow provided by (used in) investing activities          (201,044)     14,568
                                                                  --------    --------

                  FINANCING ACTIVITIES
Retirement of long-term debt                                       (11,375)    (30,891)
Dividends paid:
  Common stock                                                     (23,500)    (23,600)
                                                                  --------    --------
Net cash flow used in financing activities                         (34,875)    (54,491)
                                                                  --------    --------

Net increase (decrease) in cash and cash equivalents              (113,052)     23,453

Cash and cash equivalents at beginning of period                   113,159      49,579
                                                                  --------    --------

Cash and cash equivalents at end of period                            $107     $73,032
                                                                  ========    ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
  Interest - net of amount capitalized                             $40,283     $43,211
 Noncash investing and financing activities:
  Change in unrealized depreciation of
   decommissioning trust assets                                    ($5,599)    ($2,428)

See Notes to Respective Financial Statements.



                        SYSTEM ENERGY RESOURCES, INC.
                               BALANCE SHEETS
                                   ASSETS
                    March 31, 2003 and December 31, 2002
                                 (Unaudited)

                                                                 2003        2002
                                                                   (In Thousands)

                   CURRENT ASSETS
Cash and cash equivalents:
  Cash                                                              $107      $2,282
  Temporary cash investments - at cost,
    which approximates market                                          -     110,877
                                                              ----------  ----------
        Total cash and cash equivalents                              107     113,159
                                                              ----------  ----------
Accounts receivable:
  Associated companies                                            43,084      64,852
  Other                                                            1,350       1,377
                                                              ----------  ----------
    Total accounts receivable                                     44,434      66,229
                                                              ----------  ----------
Materials and supplies - at average cost                          52,748      51,492
Deferred nuclear refueling outage costs                           12,755      15,666
Prepayments and other                                              4,551       1,319
                                                              ----------  ----------
TOTAL                                                            114,595     247,865
                                                              ----------  ----------

           OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds                                      139,055     138,985
Other cash investments                                           192,947           -
                                                              ----------  ----------
TOTAL                                                            332,002     138,985
                                                              ----------  ----------

                   UTILITY PLANT
Electric                                                       3,204,949   3,131,945
Property under capital lease                                     465,659     455,229
Construction work in progress                                     29,152      28,128
Nuclear fuel under capital lease                                  71,731      78,991
                                                              ----------  ----------
TOTAL UTILITY PLANT                                            3,771,491   3,694,293
Less - accumulated depreciation and amortization               1,578,494   1,514,921
                                                              ----------  ----------
UTILITY PLANT - NET                                            2,192,997   2,179,372
                                                              ----------  ----------

          DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
  SFAS 109 regulatory asset - net                                124,876     134,895
  Unamortized loss on reacquired debt                             44,243      45,026
  Other regulatory assets                                        237,030     144,076
Other                                                             11,916      11,191
                                                              ----------  ----------
TOTAL                                                            418,065     335,188
                                                              ----------  ----------

TOTAL ASSETS                                                  $3,057,659  $2,901,410
                                                              ==========  ==========
See Notes to Respective Financial Statements.



                        SYSTEM ENERGY RESOURCES, INC.
                               BALANCE SHEETS
                    LIABILITIES AND SHAREHOLDER'S EQUITY
                    March 31, 2003 and December 31, 2002
                                (Unaudited)

                                                                 2003          2002
                                                                  (In Thousands)

                CURRENT LIABILITIES
Currently maturing long-term debt                                 $6,348       $11,375
Accounts payable:
  Associated companies                                            56,536         4,851
  Other                                                           22,141        26,636
Taxes accrued                                                     79,635        68,400
Accumulated deferred income taxes                                  6,488         5,322
Interest accrued                                                  16,576        42,527
Obligations under capital leases                                  24,954        24,954
Other                                                              1,565         1,928
                                                              ----------    ----------
TOTAL                                                            214,243       185,993
                                                              ----------    ----------

       DEFERRED CREDITS AND OTHER LIABILITIES
Accumulated deferred income taxes and taxes accrued              425,740       439,540
Accumulated deferred investment tax credits                       81,695        82,564
Obligations under capital leases                                  46,777        54,036
Other regulatory liabilities                                     187,448       172,111
Decommissioning                                                  296,109       153,473
Accumulated provisions                                               570           868
Other                                                             30,272        31,927
                                                              ----------    ----------
TOTAL                                                          1,068,611       934,519
                                                              ----------    ----------

Long-term debt                                                   882,337       888,665

                SHAREHOLDER'S EQUITY
Common stock, no par value, authorized 1,000,000 shares;
  issued and outstanding 789,350 shares in 2003 and 2002         789,350       789,350
Retained earnings                                                103,118       102,883
                                                              ----------    ----------
TOTAL                                                            892,468       892,233
                                                              ----------    ----------

Commitments and Contingencies

          TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY          $3,057,659    $2,901,410
                                                              ==========    ==========
See Notes to Respective Financial Statements.

Nuclear Insurance and Spent Nuclear Fuel (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)

See Note 9 to the domestic utility companies and System Energy financial statements in the Form 10-K for information on nuclear liability, property and replacement power insurance, related NRC regulations, the disposal of spent nuclear fuel, and other high-level radioactive waste associated with Entergy Arkansas', Entergy Gulf States', Entergy Louisiana's, and System Energy's nuclear power plants.

The domestic utility companies' and System Energy's nuclear owner/licensees are members of certain insurance programs, underwritten by Nuclear Electric Insurance Limited (NEIL), that provide coverage for property damage, including decontamination and premature decommissioning expense, to members' nuclear generating plants. As of April 1, 2003, the domestic utility companies and System Energy were insured against such losses up to $1.6 billion for each of their nuclear units. In addition, certain of the domestic utility companies' and System Energy's nuclear owner/licensees are members of the NEIL insurance program that covers certain replacement power and business interruption costs incurred due to prolonged nuclear unit outages. Under the property damage and replacement power/business interruption insurance programs, the nuclear owner/licensees could be subject to assessments if losses exceed the accumulated funds available to the insurers. As of April 1, 2003, the maximum amounts of such possible assessments were: Entergy Arkansas - $15.0 million; Entergy Gulf States - $12.0 million; Entergy Louisiana - $14.7 million; Entergy Mississippi - $0.1 million; Entergy New Orleans - $0.1 million; and System Energy - $12.2 million.

See Note 9 to the domestic utility companies and System Energy financial statements in the Form 10-K for information on nuclear decommissioning costs. Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, and System Energy implemented SFAS 143, "Accounting for Asset Retirement Obligations," effective January 1, 2003. The implementation of this new accounting standard resulted in a remeasurement of these companies' decommissioning liabilities. Additionally, future decommissioning expense under this new standard will represent the accretion of this liability at the applicable discount rate, and will no longer be equal to the amounts collected in rates for decommissioning for the rate-regulated portion of the domestic utility companies and System Energy's nuclear plants, as was the case before the implementation of SFAS 143. The net difference between collections in rates, earnings on the trust funds, and the accretion expense under SFAS 143 will be recorded as a regulatory charge or credit, except for the non-rate regulated portion of River Bend. The table below summarizes the activity in the decommissioning liabilities during the first quarter of 2003:

See Note 9 to the domestic utility companies and System Energy financial statements in the Form 10-K for information related to the designation of Entergy Gulf States as a PRP for the cleanup of certain hazardous waste disposal sites. As of March 31, 2003, a remaining recorded liability of approximately $11.8 million existed related to the cleanup of the remaining sites at which the EPA has designated Entergy Gulf States as a PRP.

During 1993, the LDEQ issued new rules for solid waste regulation, including regulation of wastewater impoundments. Entergy Louisiana and Entergy New Orleans have determined that certain of their power plant wastewater impoundments were affected by these regulations and have chosen to upgrade or close them. Recorded liabilities in the amounts of $5.7 million for Entergy Louisiana and $0.5 million for Entergy New Orleans existed at March 31, 2003 for wastewater upgrades and closures. Completion of this work is awaiting LDEQ approval.

Entergy New Orleans provides electric and gas service in the City of New Orleans pursuant to franchise ordinances. These ordinances contain a continuing option for the City of New Orleans to purchase Entergy New Orleans' electric and gas utility properties.

See Note 9 to the domestic utility companies and System Energy financial statements in the Form 10-K for information on the lawsuit filed by the City of New Orleans against Entergy New Orleans relating to street lighting maintenance services.

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

Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans are defendants in numerous lawsuits filed by former employees asserting that they were wrongfully terminated and/or discriminated against on the basis of age, race, sex, or other protected characteristics. The defendant companies are vigorously defending these suits and deny any liability to the plaintiffs.

Numerous lawsuits have been filed in federal and state courts in Texas and Louisiana primarily by contractor employees in the 1950-1980 timeframe against Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans, as premises owners of power plants, for damages caused by alleged exposure to asbestos or other hazardous material. Many other defendants are named in these lawsuits as well. Presently there are approximately 320 lawsuits involving just over 7000 claims. Two lawsuits have been filed in Mississippi listing over 1,000 plaintiffs that name many defendants, including entities named as Entergy Power, Inc. and Entergy Power & Light, both of which are alleged to be successors in interest to Mississippi Power and Light. During 2002, 30 cases were resolved ending over 300 claims for just over $1,000,000. Reserves have been established that are expected to be adequate to cover any exposure. Additionally, negotiations continue with insurers to recover more reimbursement, while new coverage is being secured to minimize anticipated future potential exposures. Management believes that loss exposure has been and will continue to be handled successfully so that the ultimate resolution of these matters will not be material, in the aggregate, to the domestic utility companies and System Energy's financial position or results of operation.

Previous developments and information related to electric industry restructuring are presented in Note 2 to the financial statements in the Form 10-K.

See Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of the status of retail open access in Entergy Gulf States' Texas service territory, and the proposal that Entergy Gulf States filed for an interim solution (retail open access without a FERC-approved RTO). The PUCT considered the proposal at a March 21, 2003 hearing, and issued an order on April 28, 2003. The order set forth a sequence of proceedings and activities designed to initiate an interim solution in the first half of 2004. These proceedings and activities include ruling on market protocols (a hearing on which was conducted before the PUCT on May 1, 2003); initiating a proceeding to certify an independent organization; resuming business separation proceedings; re-invigorating the pilot project; and initiating a market-readiness proceeding.

(Entergy Gulf States)

In February 2003 Entergy Gulf States implemented a $54.0 million fuel surcharge to collect under-recovered fuel costs from March through August 2002. The surcharge will be collected through December 2003.

As discussed in Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K, the APSC ordered Entergy Arkansas to cease collection of funds to decommission ANO 1 and 2 effective with the calendar year 2001, and approved the continued cessation of collection of funds during 2003. Every five years, Entergy Arkansas is required by the APSC to update the estimated costs to decommission ANO. In March 2003, Entergy Arkansas filed with the APSC its third five-year estimate of ANO decommissioning costs. The updated estimate indicated the current cost to decommission the two ANO units would be $936 million compared to $813 million in the 1997 estimate. The new estimate is currently under review by the APSC and if approved will be used in the next annual determination of the nuclear decommissioning rate rider.

Annual Earnings Reviews (Entergy Corporation and Entergy Gulf States)

See Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of Entergy Gulf States' ninth and last required post-merger analysis filed with the LPSC in May 2002. In April 2003 the LPSC staff filed testimony in which it recommends that the LPSC require a rate refund of $30.3 million and a prospective rate reduction of $75.9 million. Hearings are scheduled for October 2003.

Formula Rate Plan Filings (Entergy Corporation and Entergy Louisiana)

See Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of proceedings in Entergy Louisiana's second annual performance-based formula rate plan filing made with the LPSC for the 1996 test year. The case was argued before the U.S. Supreme Court during the last week of April 2003 and a decision is pending.

Filings with the City Council (Entergy New Orleans)

See Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of Entergy New Orleans' cost of service study and revenue requirement filed in May 2002 with the City Council for the 2001 test year, and the agreement in principle presented to the City Council in March 2003. The City Council Utility Cable and Telecommunications Committee voted unanimously to recommend approval of the agreement in principle at a meeting held on May 8, 2003.  The City Council is expected to decide whether to approve the agreement in principle on May 15, 2003.

Natural Gas

See Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of a resolution adopted in August 2001 by the City Council that ordered Entergy New Orleans to account for $36 million of certain natural gas costs charged to its gas distribution customers from July 1997 through May 2001. The presentation made to the City Council in March 2003 regarding the agreement in principle that would resolve Entergy New Orleans' rate proceeding also included proposed terms for resolution of this proceeding, if approved by the City Council. As discussed in "Rate Proceedings" above, the City Council is expected to decide whether to approve the agreement in principle on May 15, 2003.

Fuel Adjustment Clause Litigation

See "Fuel Adjustment Clause Litigation" in Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of the complaint filed by a group of ratepayers in state court in Orleans Parish and with the City Council regarding certain costs passed on to ratepayers in Entergy New Orleans' fuel adjustment filings with the City Council.

Purchased Power for Summer 2003 (Entergy Gulf States and Entergy Louisiana)

See Note 2 to the domestic utility companies and System Energy's financial statements in the Form 10-K for a discussion of proceedings related to power purchases for the summers of 2000, 2001, and 2002. In March 2003, Entergy Louisiana and Entergy Gulf States filed an application with the LPSC for the approval of capacity and energy purchases for the summer of 2003 similar to the applications filed for previous summers. A procedural schedule has not yet been set for that proceeding.

In March 2003, Entergy Arkansas retired, at maturity, $100 million of 7.72% Series First Mortgage Bonds using the proceeds from the $100 million of 6% Series First Mortgage Bonds issued in November 2002.

In May 2003 Entergy Arkansas issued $150 million of first mortgage bonds with a maturity of 15 years and expects to use the proceeds for general corporate purposes, including repayment of short-term indebtedness and redemption or repayment at maturity of $155 million of first mortgage bonds maturing in October 2003.

In March 2003, Entergy Gulf States retired, at maturity, $33 million of 6.75% Series First Mortgage Bonds and redeemed, prior to maturity, $260 million Floating Rate Series First Mortgage Bonds due June 2003. Proceeds from the $200 million of 5.2% Series First Mortgage Bonds issued in November 2002 and $140 million of 6% Series First Mortgage Bonds issued in November 2002 were used for these redemptions.

In January 2003, Entergy Mississippi issued $100 million of 5.15% Series First Mortgage Bonds due February 2013. The net proceeds were used to redeem, at maturity, a portion of the $120 million 7.75% Series First Mortgage Bonds due February 2003, and to redeem, prior to maturity, the $65 million 6.625% Series First Mortgage Bonds due November 2003 and the $25 million 8.25% Series First Mortgage Bonds due July 2004.

In February 2003, Entergy Mississippi retired, at maturity, $70 million of 6.25% Series First Mortgage Bonds using a portion of the proceeds from the $75 million of 6% Series First Mortgage Bonds issued in October 2002.

In March 2003, Entergy Mississippi issued $100 million of 4.35% Series First Mortgage Bonds due April 2008. The proceeds from this issuance are being used for general corporate purposes, including the retirement of short-term indebtedness and working capital needs. Higher fuel costs in the first quarter of 2003 contributed to the working capital needs.

SFAS 143, "Accounting for Asset Retirement Obligations," which was implemented effective January 1, 2003, requires the recording of liabilities for all legal obligations associated with the retirement of long-lived assets that result from the normal operation of those assets. These liabilities are recorded at their fair values (which are likely to be the present values of the estimated future cash outflows) in the period in which they are incurred, with an accompanying addition to the recorded cost of the long-lived asset. The asset retirement obligation is accreted each year through a charge to expense, to reflect the time value of money for this present value obligation. The amounts added to the carrying amounts of the long-lived assets are depreciated over the useful lives of the assets. The net effect of implementing this standard for the rate-regulated business of the domestic utility companies and System Energy was recorded as a regulatory asset, with no resulting impact on Entergy's net income. Entergy recorded these regulatory assets because existing rate mechanisms in each jurisdiction are based on the principle that Entergy will recover all ultimate costs of decommissioning from customers. As a result of this treatment, SFAS 143 is expected to be earnings neutral to the rate-regulated business of the domestic utility companies and System Energy. Assets and liabilities increased approximately $1.2 billion for the domestic utility companies and System Energy as a result of recording the asset retirement obligations at their fair values of $1.2 billion as determined under SFAS 143, increasing utility plant by $332 million, reducing accumulated depreciation by $363 million and recording the related regulatory assets of $422 million. The implementation of SFAS 143 for the portion of River Bend not subject to cost-based ratemaking decreased earnings by approximately $21 million net-of-tax ($0.09 per share) as a result of a one-time cumulative effect of accounting change. If SFAS 143 had been applied by Entergy's regulated utilities during all prior periods, the following impacts would have resulted:

__________________________________

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

Within the 90-day period prior to the filing of this report, evaluations were performed under the supervision and with the participation of Entergy Corporation, Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy Resources (individually "Registrant" and collectively the "Registrants") management, including their respective Chief Executive Officers (CEO) and Chief Financial Officers (CFO). The evaluations assessed the effectiveness of the Registrants' disclosure controls and procedures. Based on the evaluations, each CEO and CFO has concluded that, as to the Registrant or Registrants for which they serve as CEO or CFO, the Registrants' disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Subsequent to the date of the evaluations, there were no significant changes in the Registrants' internal controls or in other factors that could significantly affect the disclosure controls, including any corrective actions with regard to significant deficiencies and material weaknesses.

See "PART I, Item 1, for both "Entergy Corporation, Domestic utility companies, and System Energy" and "Entergy Corporation"), Litigation" in the Form 10-K for a discussion of legal proceedings affecting Entergy.

In March 2003 the FERC Staff issued its Final Report on Price Manipulation in Western Markets that identified and raised questions about 61 pairs of gas trades completed by Entergy-Koch Trading. Based on information currently available, these 61 pairs of trades represent less than one-half of one percent of Entergy-Koch Trading's volume and less than one tenth of one percent of Entergy-Koch Trading's revenues for the period under review by FERC had Entergy-Koch recorded revenues for the year ended 2001 on a gross basis. Entergy-Koch adopted the net method of reporting for trading revenues in December 2001.

In April 2003, Entergy-Koch Trading received a subpoena from the Commodity Futures Trading Commission (CFTC), seeking information on gas and power trading activities of Entergy-Koch Trading and affiliated companies, which would include Entergy Power Marketing Corp. (in operation prior to the launch of Entergy-Koch on February 1, 2001). In April 2003, Entergy received an informal inquiry from the SEC requesting information related to "pre-arranged 'round trip' or 'wash' trades" by Entergy, Entergy-Koch or Entergy-Koch Trading in 2001 and 2002.

Entergy intends to cooperate fully with the SEC and the CFTC and both Entergy and Entergy-Koch Trading are continuing to conduct internal reviews of these matters. Because these reviews are ongoing and the data are voluminous, Entergy cannot predict when these reviews will be completed. However, Entergy management does not expect to find anything material to Entergy as a result of these reviews.

See "PART I, Item 1, Generating Stations" in the Form 10-K for discussion of the request for proposal for supply-side resources issued by Entergy Services in November 2002, and the filings with their respective regulators made by Entergy Louisiana, Entergy New Orleans, and Entergy Arkansas as a result of the proposal process. In the filings with their regulators, Entergy Louisiana, Entergy New Orleans, and Entergy Arkansas are seeking approval to enter into transactions with affiliates. Entergy Louisiana seeks approval to: 1)purchase a 156MW capacity purchase call option from RS Cogen for June 2003 through May 2006; 2)enter a life-of-unit purchase power agreement for approximately 51MW of output from Entergy Power's share of Independence; 3)enter a purchase power agreement with Entergy Gulf States for two-third of the output of the 30% of River Bend formerly owned by Cajun; and 4)enter a life-of-resources purchased power agreement with Entergy Arkansas for approximately 110MW of capacity not included in Entergy Arkansas' retail rate base, consisting of a portion of the output from ANO, White Bluff, Independence, and Entergy Arkansas' share of Grand Gulf. Entergy New Orleans seeks approval to: 1)purchase a 50MW capacity purchase call option from RS Cogen for June 2003 through May 2006; 2)enter a life-of-unit purchase power agreement for approximately 50MW of output from Entergy Power's share of Independence; 3)enter a purchase power agreement with Entergy Gulf States for one-third of the output of the 30% of River Bend formerly owned by Cajun; and 4)enter a life-of-resources purchased power agreement with Entergy Arkansas for approximately 110MW of capacity not included in Entergy Arkansas' retail rate base, consisting of a portion of the output from ANO, White Bluff, Independence, and Entergy Arkansas' share of Grand Gulf. Entergy Arkansas seeks approval to enter into the life-of-resources purchased power agreements discussed above.

Regarding Entergy Louisiana's filing, the LPSC adopted a procedural schedule that would permit a decision by the end of May 2003 on the resources other than the proposed purchases from Entergy Arkansas and Entergy Gulf States, although at least one party is seeking a delay in that schedule. A procedural schedule for review and approval of the purchases from Entergy Arkansas and Entergy Gulf States has not been established. Regarding Entergy New Orleans' filing and the agreement in principle presented to the City Council, the City Council Utility Cable and Telecommunications Committee voted unanimously to recommend approval of the agreement in principle at a meeting held on May 8, 2003.  The City Council is expected to decide whether to approve the agreement in principle on May 15, 2003. Regarding Entergy Arkansas' filing with the APSC, a procedural schedule has been adopted and a public hearing is scheduled for May 13, 2003.

Entergy has also filed with the FERC the agreements described above. On May 2, 2003, the FERC issued a deficiency letter requesting additional information concerning the solicitation process and the factors used to evaluate bids submitted during the solicitation process. Entergy is in the process of responding to the requests contained in the FERC's letter.

On May 2, 2003, Entergy Services signed a letter of intent to purchase a 725MW plant located near Monroe, Louisiana. The plant is owned by a subsidiary of Cleco Corporation, which submitted a bid in response to Entergy's request for proposals for supply-side resources. Purchase of the plant is subject to regulatory approvals and is not expected to occur before the end of 2003.

See "PART I, Item 1, Transmission" in the Form 10-K for discussion of the proposed SeTrans RTO. At this time, management does not expect the proposed SeTrans RTO to become operational before mid-2005.

See "PART I, Item 1, FERC Notice of Proposed Rulemaking - Standard Market Design" in the Form 10-K for discussion of FERC's proposed rulemaking to establish a standardized transmission service and wholesale electric market design. In a letter responding to the letters from the retail regulators, the FERC indicated its desire to continue to work with the retail regulators to craft a rule that will address their concerns while at the same time providing the benefits of a fully competitive wholesale market. To further this effort, the FERC has requested a series of meetings with regulators in the Southeast United States to provide a more organized process for working through these issues. Also, on April 28, 2003, the FERC issued its anticipated white paper on SMD issues that was mentioned in the Form 10-K. Entergy continues to study the white paper, but believes that it represents a positive response by the FERC to the concerns raised by members of the industry as well as the retail regulators. While there are still some areas that require clarification, Entergy believes that this clarification can occur as the proposed SeTrans process moves forward.

See "PART I, Item 1, Generator Operating Limits proceeding" in the Form 10-K for discussion of Entergy's proposed Generator Operating Limit procedures filed with FERC. Certain intervenors in the proceeding have requested both a stay and a rehearing of FERC's March 13, 2003 order.

Regarding the agreement in principle presented by Entergy New Orleans to the City Council on March 13, 2003, the City Council Utility Cable and Telecommunications Committee voted unanimously to recommend approval of the agreement in principle at a meeting held on May 8, 2003.  The City Council is expected to decide whether to approve the agreement in principle on May 15, 2003.

(Entergy Arkansas)

See "PART I, Item 1, Environmental Regulation" in the Form 10-K for information related to the designation of Entergy Arkansas as a PRP for the cleanup of certain hazardous waste disposal sites. Regarding the site near Rison, Arkansas, on April 3, 2003, the Arkansas Supreme Court affirmed the trial court's decision to dismiss the proceeding pending against Entergy Arkansas and other defendants seeking declaratory and injunctive relief holding the defendants liable for having dispensed hazardous substances at the site and requiring remediation.

Regarding the Industrial Pollution Control Site located in Jackson, Mississippi, Entergy Arkansas advised the EPA that virtually all of the materials sent by Entergy Arkansas or its contractors to this site are exempt from the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA). On March 24, 2003, the EPA notified Entergy Arkansas that it agreed and was removing Entergy Arkansas from the list of PRPs whom it will pursue.

(Entergy Gulf States)

See "PART I, Item 1, Environmental Regulation" in the Form 10-K for information related to the designation of Entergy Gulf States as a PRP for the cleanup of certain hazardous waste disposal sites. Regarding the Lake Charles Service Center site, an engineered cap was installed over the excavated area in early 2003. The proposed ten-year groundwater monitoring program that was to begin in 2003 has been put on hold by the EPA while other alternatives are explored.

Entergy Gulf States Merger Savings Lawsuit (Entergy Corporation and Entergy Gulf States)

See "Entergy Gulf States Merger Savings Lawsuit" in Item 1 of Part I of the Form 10-K for a discussion of the lawsuit filed against Entergy Corporation and Entergy Gulf States by plaintiffs claiming to be customers of Entergy Gulf States in Texas and class representatives for all other similarly situated customers. The Texas Supreme Court has requested full briefing from the parties on the merits of the petition for mandamus relief filed in January 2003 with the court by Entergy Corporation and Entergy Gulf States.

Fiber Optic Cable Litigation (Entergy Mississippi)

See "Fiber Optic Cable Litigation" in Item 1 of Part I of the Form 10-K for a discussion of the fiber optic cable litigation filed against Entergy Mississippi. The plaintiff has agreed to a dismissal of the lawsuit and the parties are awaiting the issuance of a final order by the court.

Earnings Ratios (Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)

The domestic utility companies and System Energy have calculated ratios of earnings to fixed charges and ratios of earnings to combined fixed charges and preferred dividends pursuant to Item 503 of Regulation S-K of the SEC as follows:

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Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy Corporation agrees to furnish to the Commission upon request any instrument with respect to long-term debt that is not registered or listed herein as an Exhibit because the total amount of securities authorized under such agreement does not exceed ten percent of Entergy Corporation and its subsidiaries on a consolidated basis.

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003

Date: May 9, 2003