ENTERGY ARKANSAS, LLC

ENTERGY TEXAS, INC. AND SUBSIDIARIES

Net income increased $6.6 million primarily due to higher retail electric price partially offset by higher other operation and maintenance expenses.

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 increases in the distribution cost recovery factor rider effective June 2025 and December 2025. 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 toan increase in industrial usage substantially offset bythe effect of less favorable weather on residential sales. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the transportation and agricultural and other chemicals industries, and an increase in demand from co-generation customers.

Total electric energy sales for Entergy Texas for the three months ended March 31, 2026 and 2025 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 increased primarily due to an increase of $0.7 million in legal expenses associated with various regulatory proceedings and several individually insignificant items.

The effective income tax rates were 16.3% for the first quarter 2026 and 15.6% for thefirst quarter 2025. The differences in the effective income tax rates for thefirst quarter 2026 and thefirst quarter 2025 versus the federal statutory rate of 21% were 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.

Net cash flow provided by operating activities increased $8.6 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to higher collections from customers and the timing of recovery of fuel and purchased power costs. The increase was partially offset by higher fuel and purchased power payments and 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.

Net cash flow used in investing activities decreased$172.5 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to:

•a decrease of $84.4 million in transmission construction expenditures primarily due to decreased spending on various transmission projects in 2026;

•a decrease of $77.3 million in non-nuclear generation construction expenditures primarily due to lower spending on the Orange County Advanced Power Station project in 2026 and lower spending on the Legend Power Station project as a result of the sale of assets related to the in-process project in December 2025. See Note 8 to the financial statements in the Form 10-K for discussion of the Entergy Texas build-to-suit lease arrangement for the Legend Power Station; and

•money pool activity.

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 $10.7 million for the three months ended March 31, 2026 compared to increasing by $36.2 million for the three months ended March 31, 2025. 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 decreased $135.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to the issuance of $500 million of 5.25% Series mortgage bonds in February 2025, partially offset by a capital contribution of $365 million received from Entergy Corporation in 2026 in order to maintain Entergy Texas’s capital structure and in anticipation of various capital expenditures. 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 decrease in the debt to capital ratio for Entergy Texas is primarily due to a capital contribution of $365 million received from Entergy Corporation in 2026.

(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.

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 2030. 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, 2026, 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 two uncommitted letter of credit facilities as a means to post collateral to support its obligations to MISO. As of March 31, 2026, $104.4 million in letters of credit were outstanding under one of Entergy Texas’s uncommitted letter of credit facilities. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

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 2026, 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 $112.5 million annually, or $20.4 million in incremental annual revenues beyond Entergy Texas’s currently effective DCRF rider based on its capital invested in distribution between July 1, 2025 and December 31, 2025.

Transmission Cost Recovery Factor (TCRF) Rider

As discussed in the Form 10-K, in October 2025, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The amended rider was designed to collect from Entergy Texas’s retail customers approximately $30.3 million annually, or $20.6 million in incremental annual revenues beyond Entergy Texas’s then-effective TCRF rider based on its capital invested in transmission between July 1, 2024 and June 30, 2025 and changes in other transmission charges. In April 2026 the PUCT approved the TCRF rider, consistent with Entergy Texas’s as-filed request, and rates became effective for usage on and after April 6, 2026.

Generation Cost Recovery Rider

In March 2026, Entergy Texas filed an application to establish a generation cost recovery rider to begin recovering a return of and on its capital investment in the Orange County Advanced Power Station. The proposed generation cost recovery rider, which includes Entergy Texas’s capital invested in generation for the Orange County Advanced Power Station through December 31, 2025, is designed to collect approximately $150.4 million annually from Entergy Texas’s retail customers. By statute, the proposed generation cost recovery rider rates are to become effective when the Orange County Advanced Power Station is placed into service, which is expected in third quarter 2026.

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.

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 three customers, Entergy Arkansas, 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.

Net income remained relatively flat, decreasing by $0.4 million, for the first quarter 2026 compared to the first quarter 2025.

The effective income tax rate was 15.9% for the first quarter 2026. The difference in the effective income tax rate for the first quarter 2026 versus the federal statutory rate of 21% was primarily due to book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction, partially offset by the accrual for state income taxes.

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.

Net cash flow provided by operating activities increased $23.3 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to higher collections from customers, partially offset by an increase of $17.9 million in spending on nuclear refueling outage costs in 2026 as compared to 2025.

Net cash flow used in investing activities increased $150.2 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to net purchases of $106.3 million in 2026 compared to net proceeds of $11.6 million in 2025 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 an increase of $33.6 million in nuclear construction expenditures primarily due to higher spending in 2026 on Grand Gulf outage projects and upgrades.

System Energy’s financing activities provided $104.3 million of cash for the three months ended March 31, 2026 compared to using $49 million of cash for the three months ended March 31, 2025 primarily due to the following activity:

•the issuance of $80 million of 5.28% Series L notes by the System Energy nuclear fuel company variable interest entity in January 2026;

•net long-term borrowings of $24.9 million in 2026 compared to net repayments of $13.8 million in 2025 on the nuclear fuel company variable interest entity’s credit facility; and

•the payment of $35 million in common stock dividends and distributions in 2025 in order to maintain System Energy’s capital structure. No common stock dividends or distributions were paid in 2026.

System Energy’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for System Energy is primarily due to the net issuance of long-term debt in 2026.

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.

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, 2026, $61.3 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 in the Form 10-K for a discussion of federal regulation.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Nuclear Matters” in the Form 10-K for a discussion of nuclear matters. The following is an update to that discussion.

Nuclear Reactor Oversight Process

The NRC’s Reactor Oversight Process is a program to collect information about plant performance, assess the information for its safety significance, and provide for appropriate licensee and NRC response. The NRC evaluates plant performance by analyzing two distinct inputs: inspection findings resulting from the NRC’s inspection program and performance indicators reported by the licensee. The evaluations result in the placement of each plant in one of the NRC’s Reactor Oversight Process Action Matrix columns: “licensee response column,” or Column 1, “regulatory response column,” or Column 2, “degraded cornerstone column,” or Column 3, “multiple/repetitive degraded cornerstone column,” or Column 4, and “unacceptable performance,” or Column 5. Plants in Column 1 are subject to normal NRC inspection activities. Plants in Column 2, Column 3, or Column 4 are subject to progressively increasing levels of inspection by the NRC with, in general, progressively increasing levels of associated costs. Continued plant operation is not permitted for plants in Column 5. Grand Gulf is currently in Column 1.

In March 2026 the NRC issued an inspection report for Grand Gulf, in which it identified a preliminary “white” finding with “low safety significance” related to one of Grand Gulf’s emergency diesel generators. The NRC is continuing its evaluation of the issue and is expected to complete its determination during second quarter 2026. If the NRC’s review results in a final white finding, Grand Gulf would be placed in Column 2 and would remain in Column 2 until the satisfactory completion of an NRC supplemental inspection.

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.