ENTERGY ARKANSAS, LLC

ENTERGY TEXAS, INC. AND SUBSIDIARIES

Net income increased $11.8 million primarily due to higher retail electric price and higher volume/weather, partially offset by higher other operation and maintenance expenses.

Net income increased $18.3 million primarily due to higher retail electric price, higher volume/weather, and higher other income, 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 and an increase in the transmission cost recovery factor rider effective April 2026. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the distribution and transmission cost recovery factor rider filings.

The volume/weather variance is primarily due toan increase in weather-adjusted residential usage and an increase in industrial usage, partially offset bythe effect of less favorable weather on residential sales. The increase in weather-adjusted residential usage is primarily due to an increase in customers. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the agricultural and other chemicals, transportation, and industrial gases industries.

Total electric energy sales for Entergy Texas for the three months ended June 30, 2026 and 2025 are as follows:

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

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 and an increase in weather-adjusted residential usage, partially 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, agricultural and other chemicals, and industrial gases industries and an increase in demand from co-generation customers. The increase in weather-adjusted residential usage is primarily due to an increase in customers.

Total electric energy sales for Entergy Texas for the six months ended June 30, 2026 and 2025 are as follows:

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

Purchased power includes a decrease of $18.1 million in costs related to the procurement of capacity through MISO’s annual planning resource auction. Higher costs in second quarter 2025 resulted from the effect of a significant increase in MISO’s seasonal auction clearing price, due to the implementation of a reliability-based demand curve, for capacity transactions during the summer months in 2025. Prior to June 2026, Entergy Texas also did not have the ability to recover its MISO capacity costs incurred to date beyond the level included in base rates. In June 2025, Texas legislation established a capacity cost recovery rider mechanism that would allow for the recovery of costs related to the procurement of capacity through MISO’s annual planning resource auction outside of base rates, through a rider that is updated annually. In May 2026, Entergy Texas filed a request with the PUCT for a capacity cost recovery rider to recover eligible capacity procurement costs associated with its participation in MISO’s annual planning resource auction, and the PUCT approved the request in July 2026. The decrease in purchased power from lower MISO capacity costs is partially offset by higher non-MISO capacity costs resulting from capacity cost changes for ongoing purchased power capacity contracts. See Note 2 to the financial statements herein for discussion of the capacity cost recovery rider.

•an increase of $4.1 million in power delivery expenses primarily due to a higher scope of work performed in 2026 as compared to 2025;

•an increase of $1.4 million incompensation and benefits costs primarily due to higher healthcare claims activity and the timing of the recognition of prescription drug rebates; and

The increase was partially offset by a decrease of $4.5 million in bad debt expense and a decrease of $1.2 million in non-nuclear generation expenses primarily due to a lower scope of work performed during plant outages in 2026 as compared to 2025.

Other income increased primarily due to higher interest earned on money pool investments.

Interest expense increased primarily due to the issuance of $425 million of 5.20% Series mortgage bonds in May 2026.

Purchased power includes a decrease of $15.6 million in costs related to the procurement of capacity through MISO’s annual planning resource auction. Higher costs in second quarter 2025 resulted from the effect of a significant increase in MISO’s seasonal auction clearing price, due to the implementation of a reliability-based demand curve, for capacity transactions during the summer months in 2025. Prior to June 2026, Entergy Texas also did not have the ability to recover its MISO capacity costs incurred to date beyond the level included in base rates. In June 2025, Texas legislation established a capacity cost recovery rider mechanism that would allow for the recovery of costs related to the procurement of capacity through MISO’s annual planning resource auction outside of base rates, through a rider that is updated annually. In May 2026, Entergy Texas filed a request with the PUCT for a capacity cost recovery rider to recover eligible capacity procurement costs associated with its participation in MISO’s annual planning resource auction, and the PUCT approved the request in July 2026. The decrease in purchased power from lower MISO capacity costs is partially offset by higher non-MISO capacity costs resulting from capacity cost changes for ongoing purchased power capacity contracts. See Note 2 to the financial statements herein for discussion of the capacity cost recovery rider.

•an increase of $4.1 million in power delivery expenses primarily due to a higher scope of work performed in 2026 as compared to 2025;

•an increase of $1.7 millionin compensation and benefits costs primarily due to a revision to estimated incentive-based compensation expense in 2025;

•an increase of $1.2 million in insurance expense primarily due to higher premiums; and

The increase was partially offset by a decrease of $6 million in bad debt expense and a decrease of $1.7 million in non-nuclear generation expenses primarily due to a lower scope of work performed during plant outages in 2026 as compared to 2025.

Other income increased primarily due to higher interest earned on money pool investments.

Interest expense increased primarily due to the issuance of $500 million of 5.25% Series mortgage bonds in February 2025 and the issuance of $425 million of 5.20% Series mortgage bonds in May 2026, partially offset by lower carrying costs on the deferred fuel balance.

The effective income tax rates were 17.6% for the second quarter 2026 and 17.1% for thesix months ended June 30, 2026. The differences in the effective income tax rates for thesecond quarter 2026 and thesix months ended June 30, 2026 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.

The effective income tax rates were 16.7% for the second quarter 2025 and 16.2% for the six months ended June 30, 2025. The differences in the effective income tax ratesfor the second quarter 2025 and thesix months ended June 30, 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.

Net cash flow provided by operating activities increased $24.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to higher collections from customers and the timing of recovery of fuel and purchased power costs, partially offset by higher fuel and purchased power payments. 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$348.6 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to a decrease of $321.2 million in non-nuclear generation construction expenditures primarily due to 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 and lower spending on the Orange County Advanced Power Station project in 2026 and a decrease of $78.4 million in transmission construction expenditures primarily due to decreased spending on various transmission projects in 2026. The decrease was partially offset by money pool activity. 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.

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 $19.2 million for the six months ended June 30, 2026 compared to decreasing by $13.7 million for the six months ended June 30, 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 increased $55.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to:

•the issuance of $425 million of 5.20% Series mortgage bonds in May 2026;

•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; and

•an increase of $25.6 million in advance payments from customers for construction related to transmission, distribution, and generator interconnection agreements.

The increase was partially offset by the issuance of $500 million of 5.25% Series mortgage bonds in February 2025 and a $248.3 million payment in June 2026 associated with a financed portion of construction work in progress related to the Orange County Advanced Power Station. 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.

(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.

Following are updates to the current annual amounts of Entergy Texas’s planned construction and other capital investments through 2030.

In addition to routine capital spending to maintain operations, the capital plan for Entergy Texas includes investments in generation projects to modernize, decarbonize, expand, and diversify Entergy Texas’s portfolio, including Orange County Advanced Power Station, Lone Star Power Station, and Legend Power Station; distribution and Utility support spending to improve reliability, resilience, and customer experience; transmission spending to improve reliability and resilience while also supporting renewables expansion and customer growth; and other investments. The planned construction and capital investments amounts above exclude investments expected to be funded with customer advances for construction.

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 2031. 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 June 30, 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 June 30, 2026, $110.6 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 amended rider was 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 then-effective DCRF rider based on its capital invested in distribution between July 1, 2025 and December 31, 2025. In July 2026 the PUCT approved the DCRF rider, consistent with Entergy Texas’s as-filed request, and rates became effective for usage on and after July 8, 2026.

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. In July 2026 the ALJ with the State Office of Administrative Hearings approved aproposed procedural schedule that includes a hearing on the merits in September 2026 and provides for interim rates to become effective for usage on and after the Orange County Advanced Power Station in-service date, to the extent final rates are not in place by that time.

Capacity Cost Recovery Rider (CCRR)

In May 2026, Entergy Texas filed with the PUCT a request to establish a new CCRR. The proposed CCRR is designed to collect approximately $58 million annually from Entergy Texas’s retail customers based on Entergy Texas’s eligible capacity-related costs and revenues for the 12 months beginning June 1, 2026. The eligible capacity-related costs and revenues are associated with Entergy Texas’s participation in MISO’s annual planning resource auction. In July 2026 the PUCT approved the CCRR, consistent with Entergy Texas’s as-filed request, and rates became effective on July 10, 2026.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Federal Regulation” 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.

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 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 increased $2 million primarily due to higher operating revenues resulting from changes in rate base.

Net income increased $1.6 million primarily due to higher operating revenues resulting from changes in rate base.

The effective income tax rates were 17.3% for the second quarter 2026 and 16.6% for the six months ended June 30, 2026. The differences in the effective income tax rates for the second quarter 2026 and the six months ended June 30, 2026 versus the federal statutory rate of 21% were primarily due to certain 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 rates were 19.4% for the second quarter 2025 and 20.3% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to certain 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.

Net cash flow provided by operating activities decreased $29.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to an increase of $33.3 million in spending on nuclear refueling outage costs in 2026 as compared to 2025, partially offset by higher collections from customers.

Net cash flow used in investing activities increased $173.7 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to net purchases of $114.3 million in 2026 compared to net proceeds of $16.6 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 $60.5 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 $127.7 million of cash for the six months ended June 30, 2026 compared to using $72.6 million of cash for the six months ended June 30, 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 $18 million in 2026 compared to net repayments of $28.4 million in 2025 on the nuclear fuel company variable interest entity’s credit facility;

•money pool activity;

•the repayment, prior to maturity, of $200 million of 2.14% Series mortgage bonds in June 2025;

•the payment of $75 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; and

•the issuance of $240 million of 5.30% Series mortgage bonds in May 2025.

Increases in System Energy’s payable to the money pool are a source of cash flow, and System Energy’s payable to the money pool increased $30 million for the six months ended June 30, 2026. 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 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 also 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.

Following are updates to the current annual amounts of System Energy’s planned construction and other capital investments through 2030.

In addition to routine capital spending to maintain operations, the capital plan for System Energy includes amounts associated with Grand Gulf investments and initiatives.

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 2029. As of June 30, 2026, $54.4 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. The following is an update to that discussion.

Unit Power Sales Agreement

See Note 2 to the financial statements in the Form 10-K for discussion of the Unit Power Sales Agreement. The following is an update to that discussion.

Pension Costs Amendment Proceeding

As discussed in the Form 10-K, in October 2021, System Energy submitted to the FERC proposed amendments to the Unit Power Sales Agreement to include in rate base the prepaid and accrued pension costs associated with System Energy’s qualified pension plans. In November 2025 the FERC issued an order approving System Energy’s proposed prepaid and accrued pension recovery mechanism. System Energy has been utilizing this methodology in billings since December 1, 2022 and will continue to utilize it going forward. As a result of the FERC’s order, System Energy did not owe any refunds. In December 2025 the APSC filed a request for rehearing of the November 2025 order. In January 2026 the FERC denied the APSC’s rehearing request by operation of law. In May 2026 the FERC issued a follow-up substantive order denying the APSC’s rehearing and sustaining its finding that no refunds are owed.

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.

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 2.

In April 2026 the NRC issued a final significance determination and notice of violation for Grand Gulf, in which it finalized a “white” finding with “low safety significance” related to one of Grand Gulf’s emergency diesel generators, resulting in Grand Gulf’s placement in Column 2, effective first quarter 2026. Grand Gulf will 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.

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.