ENTERGY CORP DE

ENTERGY TEXAS, INC. AND SUBSIDIARIES

Net income increased $30.1 million primarily due to higher volume/weather, higher retail electric price, and higher other income, partially offset by higher interest expense and higher taxes other than income taxes.

Entergy Texas’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

The retail electric price variance is primarily due to the implementation of the distribution cost recovery factor rider effective with the first billing cycle in October 2024 and an increase in the distribution cost recovery factor rider effective in late December 2024. See Note 2 to the financial statements in the Form 10-K for discussion of the distribution cost recovery factor rider filings.

The volume/weather variance is primarily due to the effect of more favorable weather on residential sales, an increase in weather-adjusted residential usage, and an increase in commercial usage. The increase in weather-adjusted residential usage and the increase in commercial usage are primarily due to an increase in customers.

Total electric energy sales for Entergy Texas for the three months ended March 31, 2025 and 2024 are as follows:

See Note 12 to the financial statements herein for additional discussion of Entergy Texas’s operating revenues.

Other operation and maintenance expenses decreased primarily due to contract costs of $2.0 million, in first quarter 2024, related to operational performance, customer service, and organizational health initiatives and a decrease of $1.9 million in non-nuclear generation expenses primarily due to a lower scope of work performed in 2025 as compared to 2024.

Taxes other than income taxes increased primarily due to increases in ad valorem taxes resulting from higher assessments.

Depreciation and amortization expenses decreased primarily due to the recognition of $13.8 million in depreciation expense in first quarter 2024 for the 2022 base rate case relate back period, effective over six months beginning January 2024. The recognition of depreciation expense for the relate back period was effective over the same period as collections from the relate back surcharge rider and resulted in no effect on net income. See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case. The decrease was partially offset by additions to plant in service.

Other income increased primarily due to an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

Interest expense increased primarily due to:

•the issuance of $350 million of 5.55% Series mortgage bonds in August 2024;

•carrying costs of $3.4 million, recorded in first quarter 2025, related to the interim fuel refund. The recognition of carrying costs is effective over the same period as the interim fuel refund and results in no effect on net income. See Note 2 to the financial statements in the Form 10-K for discussion of the interim fuel refund; and

•the issuance of $500 million of 5.25% Series mortgage bonds in February 2025.

The increase was partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

The effective income tax rate was 15.6% for the first quarter 2025. The difference in the effective income tax ratefor the first quarter 2025 versus the federal statutory rate of 21% was primarily due to book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items.

The effective income tax rate was 19.1% for the first quarter 2024. The difference in the effective income tax rate forthe first quarter 2024 versus the federal statutory rate of 21% was primarily due to book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes.

Net cash flow provided by operating activities decreased $49.1 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the timing of recovery of fuel and purchased power costs, an increase of $38.7 million in interest paid, higher fuel and purchased power payments, and lower collections from customers. The decrease was partially offset by the timing of payments to vendors. See Note 2 to the financial statements in the Form 10-K for a discussion of fuel and purchased power cost recovery.

Entergy Texas’s investing activities used$441.0 million of cash for the three months ended March 31, 2025 compared to providing $34.3 million of cash for the three months ended March 31, 2024 primarily due to the following activity:

•an increase of $131.5 million in non-nuclear generation construction expenditures primarily due to higher spending on the Legend Power Station project and the Orange County Advanced Power Station project;

•an increase of $52 million in transmission construction expenditures primarily due to increased spending on various transmission projects in 2025 and higher capital expenditures as a result of increased development in Entergy Texas’s service area; and

•a decrease of $17.9 million in information technology capital expenditures primarily due to decreased spending on various technology projects in 2025.

Increases in Entergy Texas’s receivable from the money pool are a use of cash flow, and Entergy Texas’s receivable from the money pool increased $36.2 million for the three months ended March 31, 2025 compared to decreasing by $267.6 million for the three months ended March 31, 2024. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Net cash flow provided by financing activities increased $481.6 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the issuance of $500 million of 5.25% Series mortgage bonds in February 2025, partially offset by a decrease of $12.4 million in advance payments from customers for construction related to transmission, distribution, and generator interconnection agreements. See Note 4 to the financial statements herein and Note 5 to the financial statements in the Form 10-K for more details on long-term debt.

Entergy Texas’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy Texas is primarily due to the net issuance of long-term debt in 2025.

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

Net debt consists of debt less cash and cash equivalents. Debt consists of finance lease obligations and long-term debt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cash equivalents. The debt to capital ratio excluding securitization bonds and net debt to net capital ratio excluding securitization bonds are non-GAAP measures. Entergy Texas uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy Texas’s financial condition because the securitization bonds are non-recourse to Entergy Texas, as more fully described in Note 5 to the financial statements in the Form 10-K. Entergy Texas also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Texas’s financial condition because net debt indicates Entergy Texas’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS -Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy Texas’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact Entergy Texas’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with Entergy Texas’s capital investments or operations and maintenance expenses; operational impacts, such as supply chain, manufacturing or raw materials sourcing disruptions which may affect Entergy Texas’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect Entergy Texas’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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

Entergy Texas has a credit facility in the amount of $300 million scheduled to expire in June 2029. The credit facility includes fronting commitments for the issuance of letters of credit against $25 million of the borrowing capacity of the facility. As of March 31, 2025, there were no cash borrowings and $1.1 million in letters of credit outstanding under the credit facility. In addition, Entergy Texas is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of March 31, 2025, $105.4 million in letters of credit were outstanding under Entergy Texas’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

Legend Power Station and Lone Star Power Station

As discussed in the Form 10-K, in June 2024, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate the Legend Power Station, a 754 MW combined-cycle combustion turbine facility, which will be enabled for future carbon capture and storage and for hydrogen co-firing optionality, to be located in Jefferson County, Texas, and the Lone Star Power Station, a 453 MW simple-cycle combustion turbine facility, which will be enabled with hydrogen co-firing optionality, to be located in Liberty County, Texas. A hearing on the merits was held in April 2025. Also in April 2025, Entergy Texas, intervenors, and the PUCT staff filed initial briefs. In its initial brief, the PUCT staff recommends denial of Entergy Texas’s application or, in the alternative, approval subject to conditions that include a prudence review by an external consultant if actual project costs exceed estimated costs by more than 10%, transmission cost reporting, and weatherization of both the Legend Power Station and the Lone Star Power Station. Certain intervenors requested that the PUCT impose various conditions upon the approval of the resources, including, among others, cost recovery limitations, a direction that Entergy Texas initiate a competitive tariff proceeding to facilitate industrial sleeving, a requirement for additional regulatory approvals related to hydrogen or carbon capture and storage implementation, limits on the recovery of supplemental filing costs, and calculation of

AFUDC based on an adjusted weighted average cost of capital. Reply briefs are due in May 2025. A PUCT decision is expected in third quarter 2025. Subject to receipt of required regulatory approval and other conditions, both facilities are expected to be in service by mid-2028.

SETEX Area Reliability Project

In February 2025, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate a new single-circuit 500 kV transmission line and associated stations and 138/230 kV facilities. The transmission line is expected to be approximately 131 to 160 miles in length and the estimated cost of the project ranges from $1.3 billion to $1.5 billion, depending upon the route ultimately approved by the PUCT. Also in February 2025 the PUCT referred the proceeding to the State Office of Administrative Hearings. In March 2025 the ALJs with the State Office of Administrative Hearings adopted a procedural schedule with a hearing on the merits to be held in May 2025. A PUCT decision is expected in third quarter 2025. Subject to receipt of required regulatory approval and other conditions and approvals, construction of the project is expected to be completed by the end of 2029.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - State and Local Rate Regulation and Fuel-Cost Recovery” in the Form 10-K for a discussion of state and local rate regulation and fuel-cost recovery. The following are updates to that discussion.

Distribution Cost Recovery Factor (DCRF) Rider

In April 2025, Entergy Texas filed with the PUCT a request to amend its DCRF rider. The proposed rider is designed to collect from Entergy Texas’s retail customers approximately $77.8 million annually, or $29.3 million in incremental annual revenues beyond Entergy Texas’s currently effective DCRF rider based on its capital invested in distribution between July 1, 2024 and December 31, 2024, including distribution-related restoration costs associated with Hurricane Beryl.

Transmission Cost Recovery Factor (TCRF) Rider

As discussed in the Form 10-K, in October 2024, Entergy Texas filed with the PUCT a request to amend its TCRF rider, which was previously reset to zero in June 2023 as a result of the 2022 base rate case. The amended rider was designed to collect from Entergy Texas’s retail customers approximately $9.7 million annually based on its capital invested in transmission between January 1, 2022 and June 30, 2024 and changes in other transmission charges. In April 2025 the PUCT approved the TCRF rider, consistent with Entergy Texas’s as-filed request, and rates became effective for usage on and after April 7, 2025.

Industrial and Commercial Customers

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Industrial and Commercial Customers” in the Form 10-K for a discussion of industrial and commercial customers.

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 Texas’s accounting for utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

See the “New Accounting Pronouncements” section of Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements and the “New Accounting Pronouncements” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis herein for updates to the discussion of new accounting pronouncements.

SYSTEM ENERGY RESOURCES, INC.

System Energy’s principal asset consists of an ownership interest and a leasehold interest in Grand Gulf. The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement. Payments under the Unit Power Sales Agreement are System Energy’s only source of operating revenues. As discussed in “Complaints Against System Energy” in Note 2 to the financial statements in the Form 10-K, System Energy and the Unit Power Sales Agreement have been the subject of several litigation proceedings at the FERC. Settlements that resolve all significant aspects of these complaints have been reached with the MPSC, the APSC, the City Council, and the LPSC, and these settlements have been approved by the FERC.

Net income decreased $7.7 million primarily due a lower rate of return on rate base, including the effects of lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy New Orleans effective with the June 2024 service month per the settlement agreement with the City Council and the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy Louisiana effective with the September 2024 service month per the settlement with the LPSC. The decrease was partially offset by higher operating revenues resulting from an increase in rate base. See Note 2 to the financial statements in the Form 10-K for discussion of the settlements with the City Council and the LPSC.

The effective income tax rate was 21.2% for the first quarter 2025. The difference in the effective income tax rate for the first quarter 2025 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, partially offset by book and tax differences related to utility plant items.

The effective income tax rate was 20.5% for the first quarter 2024. The difference in the effective income tax rate for the first quarter 2024 versus the federal statutory rate of 21% was primarily due to book and tax differences related to the allowance for equity funds used during construction, partially offset by the accrual for state income taxes.

Net cash flow provided by operating activities decreased $25.2 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the timing of collections from customers, partially offset by a decrease of $6.6 million in spending on nuclear refueling outage costs in 2025 as compared to 2024.

Net cash flow used in investing activities decreased $165.7 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decrease in cash used of $123.5 million as a result of fluctuations in nuclear fuel activity due to variations from year to year in the timing and pricing of fuel reload requirements, material and services deliveries, and the timing of cash payments during the nuclear fuel cycle and money pool activity.

Decreases in System Energy’s receivable from the money pool are a source of cash flow and System Energy’s receivable from the money pool decreased $2.4 million for the three months ended March 31, 2025 compared to increasing by $31.5 million for the three months ended March 31, 2024. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

System Energy’s financing activities used $49 million of cash for the three months ended March 31, 2025 compared to providing $229.4 million of cash for the three months ended March 31, 2024 primarily due to:

•a capital contribution of $150 million received from Entergy Corporation in January 2024 in order to maintain System Energy’s capital structure;

•net repayments of $13.8 million in 2025 compared to net long-term borrowings of $91.7 million in 2024 on the nuclear fuel company variable interest entity’s credit facility; and

•$35 million in common stock dividends and distributions paid in 2025. No common stock dividends or distributions were paid in 2024 in anticipation of the settlements with the APSC, the LPSC, and the City Council.

System Energy’s debt to capital ratio is shown in the following table.

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings and long-term debt, including the currently maturing portion. Capital consists of debt and common equity. Net capital consists of capital less cash and cash equivalents. System Energy uses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating System Energy’s financial condition. The net debt to net capital ratio is a non-GAAP measure. System Energy uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating System Energy’s financial condition because net debt indicates System Energy’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS -Liquidity and Capital Resources” in the Form 10-K for a discussion of System Energy’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact System Energy’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with System Energy’s capital investments or operations and maintenance expenses; operational impacts, such as supply chain, manufacturing or raw materials sourcing disruptions which may affect System Energy’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect System Energy’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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

The System Energy nuclear fuel company variable interest entity has a credit facility in the amount of $120 million scheduled to expire in June 2027. As of March 31, 2025, $58.9 million in loans were outstanding under the System Energy nuclear fuel company variable interest entity credit facility. See Note 4 to the financial statements herein for additional discussion of the variable interest entity credit facility.

See the “Rate, Cost-recovery, and Other Regulation -Federal Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis in the Form 10-K and Note 2 to the financial statements herein and in the Form 10-K for a discussion of federal regulation.

Complaints Against System Energy

See Note 2 to the financial statements in the Form 10-K for information regarding pending complaints against System Energy and the settlements approved by the FERC that resolved all significant aspects of these complaints. The following is an update to that discussion.

Grand Gulf Sale-leaseback Renewal Complaint and Uncertain Tax Position Rate Base Issue

As discussed in the Form 10-K, in February 2023, System Energy submitted a tariff compliance filing with the FERC to clarify that, consistent with the releases provided in the June 2022 MPSC settlement, Entergy Mississippi would continue to be charged for its allocation of the sale-leaseback renewal costs under the Unit Power Sales Agreement. In March 2023 the MPSC filed a protest to System Energy’s tariff compliance filing. The MPSC argued that the settlement did not specifically address post-settlement sale-leaseback renewal costs and that the sale-leaseback renewal costs may not be recovered under the Unit Power Sales Agreement. In February 2025, System Energy and the MPSC resolved their dispute concerning the sale-leaseback renewal costs. As a result, the MPSC withdrew its protest at the FERC on System Energy’s tariff compliance filing. Entergy Mississippi will continue to pay the allocated sale-leaseback renewal costs of approximately $5.7 million annually and there are no refunds due for prior periods. In March 2025, System Energy filed a status report with the FERC explaining that the dispute is resolved.

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

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in System Energy’s accounting for nuclear decommissioning costs, utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

See the “New Accounting Pronouncements” section of Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements and the “New Accounting Pronouncements” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis herein for updates to the discussion of new accounting pronouncements.