CENTERPOINT ENERGY HOUSTON ELECTRIC LLC

Previous wording

Updated 10-Year Capital Plan. On February 19, 2026, CenterPoint Energy announced an increase in the 10-year capital plan of $500 million to reflect total capital expenditures of approximately $65.5 billion through 2035.The plan is expected to advance economic growth, enhance the experience of the Registrants’ customers and deliver consistent value for stakeholders across the Registrants’ jurisdictions.

Current wording

Updated 10-Year Capital Plan. In July 2026, CenterPoint Energy announced an increase in its 10-year capital plan of $1.2 billion to reflect total planned capital expenditures of approximately $66.7 billion through 2035. The plan is expected to advance economic growth, enhance the experience of the Registrants’ customers and deliver consistent value for stakeholders across the Registrants’ jurisdictions.

Previous wording

TEEEF. In June 2025, Houston Electric entered into the ERCOT Transaction, subject to PUCT approval, to release its 15 large (27 MW to 32 MW) TEEEF units to ERCOT at CPS Energy facilities to serve the greater San Antonio region until March 2027 unless terminated earlier pursuant to the provisions of the ERCOT Transaction, reduce its TEEEF fleet capacity and reduce its rates to reflect removal of the large TEEEF units from its fleet. Following the completion of service in the San Antonio area, Houston Electric anticipates that it would complete one or more future transactions involving its large TEEEF units. As the large TEEEF units would not be available to serve Houston Electric customers during such time, Houston Electric plans to continue to not charge customers for these units for any future periods. In November 2025, Houston Electric proposed to remove its five medium (5.7 MW) TEEEF units and to remove the associated lease costs from its rates effective January 1, 2026. On April 10, 2026, Houston Electric requested continued abatement until April 24, 2026 due to continued settlement discussions. For additional information, see Note 6 to the Interim Condensed Financial Statements.

Current wording

TEEEF. In June 2025, Houston Electric entered into the ERCOT Transaction, subject to PUCT approval, to release its 15 large (27 MW to 32 MW) TEEEF units to ERCOT at CPS Energy facilities to serve the greater San Antonio region until March 2027 unless terminated earlier pursuant to the provisions of the ERCOT Transaction, reduce its TEEEF fleet capacity and reduce its rates to reflect removal of the large TEEEF units from its fleet. Following the completion of service in the San Antonio area, Houston Electric anticipates that it would complete one or more future transactions involving its large TEEEF units. As the large TEEEF units would not be available to serve Houston Electric customers during such time, Houston Electric plans to continue to not charge customers for these units for any future periods. In November 2025, Houston Electric proposed to remove its five medium (5.7 MW) TEEEF units and to remove the associated lease costs from its rates effective January 1,

Previous wording

Net income (loss) for the three months ended March 31, 2026 and 2025 was as follows:

Current wording

Net income (loss) for the three and six months ended June 30, 2026 and 2025 was as follows:

Previous wording

Net income increased $19 million primarily due to the following items:

Current wording

Net income increased $46 million primarily due to the following items:

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•an increase in net income of $32 million for the Electric reportable segment, as further discussed below;

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•an increase in net income of $66 million for the Electric reportable segment, as further discussed below;

Previous wording

•an increase in net loss of $35 million for the Corporate and Other reportable segment, primarily due to the impact of accrued income tax expense offset in other segments.

Current wording

•an increase in net loss of $14 million for the Corporate and Other reportable segment, primarily due to a $21 million gain on the early extinguishment of debt recognized during the second quarter of 2025 that did not recur, an increase in operating expense and the unfavorable net impact of the mark-to-market valuations on the ZENS indexed debt securities derivative and ZENS-related securities, partially offset by $4 million from a release of a state unrecognized tax benefit upon statute of limitations expiration and $1 million of lower borrowing costs.

Previous wording

•an increase in net income of $22 million for the Natural Gas reportable segment, as further discussed below; and

Current wording

•an increase in net income of $16 million for the Natural Gas reportable segment, as further discussed below; and

Previous wording

The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for CenterPoint Energy’s Electric reportable segment:

Current wording

The following table provides variance explanations for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as well as for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 by major income statement caption for CenterPoint Energy’s Electric reportable segment:

Previous wording

The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for CenterPoint Energy’s Natural Gas reportable segment:

Current wording

The following table provides variance explanations for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as well as for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 by major income statement caption for CenterPoint Energy’s Natural Gas reportable segment:

Previous wording

The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for Houston Electric:

Current wording

The following table provides variance explanations for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as well as for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 by major income statement caption for Houston Electric:

Previous wording

The following table provides variance explanations for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 by major income statement caption for CERC:

Current wording

The following table provides variance explanations for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as well as for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 by major income statement caption for CERC:

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Operating Activities. The following items contributed to increased (decreased) net cash provided by operating activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

Current wording

Operating Activities. The following items contributed to increased (decreased) net cash provided by operating activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025:

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Investing Activities. The following items contributed to (increased) decreased net cash used in investing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

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Investing Activities. The following items contributed to (increased) decreased net cash used in investing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025:

Previous wording

Financing Activities. The following items contributed to (increased) decreased net cash provided by (used in) financing activities for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

Current wording

Financing Activities. The following items contributed to (increased) decreased net cash provided by (used in) financing activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025:

Previous wording

The Registrants expect that anticipated cash needs for the remainder of 2026 will be met with available cash flow from operations, proceeds from the sale of our Ohio natural gas LDC business, as well as cash flows from financing (such as issuances of debt securities and equity securities upon physical settlement of outstanding forward sale agreements and borrowings under credit facilities, commercial paper issuances or other sources). At this time, CenterPoint Energy does not anticipate the need for further sales of shares of Common Stock under the Equity Distribution Agreement. The issuance of securities in the capital markets and borrowings under additional credit facilities and term loans may not, however, be available on acceptable terms. The Registrants may, from time to time, redeem, repurchase or otherwise acquire their outstanding debt securities through open market purchases, tender offers or pursuant to the terms of such securities.

Current wording

The Registrants expect that anticipated cash needs for the remainder of 2026 will be met with available cash flow from operations, proceeds from the sale of our Ohio natural gas LDC business, contributions in aid of construction as well as cash flows from financing (such as issuances of debt securities and equity securities upon physical settlement of outstanding forward sale agreements and borrowings under credit facilities, commercial paper issuances or other sources). At this time, CenterPoint Energy does not anticipate the need for any sales of shares of Common Stock under the 2026 Equity Distribution Agreement in 2026. The issuance of securities in the capital markets and borrowings under additional credit facilities and term loans may not, however, be available on acceptable terms. The Registrants may, from time to time, redeem, repurchase or otherwise acquire their outstanding debt securities through open market purchases, tender offers or pursuant to the terms of such securities.

Previous wording

On May 1, 2024, Indiana Electric filed with the IURC seeking approval to purchase 147 MW of wind power under a 25-year PPA with an affiliate of NextEra Energy, Inc., which is developing a wind project in Knox County, Illinois. On November 6, 2024, the IURC approved the Knox County wind PPA, which provided for the recovery of the purchase power costs through the fuel adjustment clause proceedings over the term of the PPA. The facility is targeted to be in operation in late 2026.

Current wording

On May 1, 2024, Indiana Electric filed with the IURC seeking approval to purchase 147 MW of wind power under a 25-year PPA with an affiliate of NextEra Energy, Inc., which is developing a wind project in Knox County, Illinois. On November 6, 2024, the IURC approved the Knox County wind PPA, which provided for the recovery of the purchase power costs through the fuel adjustment clause proceedings over the term of the PPA. The facility was targeted to be in operation in late 2026, however construction was recently halted by the developer following the Department of War’s pause on approving the required mitigation plan, and it is uncertain, when, if at all, the project will become operational.

Previous wording

While Indiana Electric’s 2025 IRP (similar to previous IRPs) preferred portfolios included the retirement of F.B. Culley Unit 2, a coal-fired generation unit, by the end of 2025, the U.S. Department of Energy issued emergency 202(c) orders (the “DOE Order”) in December 2025 and March 2026 directing Indiana Electric to continue operating the unit through June 21, 2026. Indiana Electric has filed a complaint with the FERC to request creation of a cost recovery/cost allocation mechanism. On March 19, 2026, FERC directed MISO to adopt a tariff amendment that would authorize the F.B. Culley unit to recover costs across load-serving entities situated in MISO’s north and central local reliability zones, otherwise known as MISO North and Central. A separate filing will be made at a later date with the FERC to seek recovery of all costs incurred to comply with the U.S. Department of Energy’s emergency 202(c) orders. Indiana Electric has also filed an application with the IURC in Cause No. 46350 to recover any compliance costs associated with the emergency 202(c) orders that are not recovered through the FERC proceedings. On April 15, 2026, Indiana Electric filed a Motion to Intervene in the United States Court of Appeals for the D.C. Circuit in response to the Public Interest Organizations’ appeal of the DOE Order. Indiana Electric intervened as the owner of F.B. Culley 2 that is the subject of the DOE Order representing Indiana Electric’s authority to recover the costs it has incurred to comply with the DOE Order.

Current wording

While Indiana Electric’s 2025 IRP (similar to previous IRPs) preferred portfolios included the retirement of F.B. Culley Unit 2, a coal-fired generation unit, by the end of 2025, the U.S. Department of Energy issued emergency 202(c) orders (the “DOE Order”) in December 2025, March 2026 and June 2026 directing Indiana Electric to continue operating the unit through September 19, 2026. Indiana Electric has filed a complaint with the FERC to request creation of a cost recovery/cost allocation mechanism. On March 19, 2026, FERC directed MISO to adopt a tariff amendment that would authorize the F.B. Culley unit to recover costs across load-serving entities situated in MISO’s north and central local reliability zones, otherwise known as MISO North and Central. A separate filing will be made at a later date with the FERC to seek recovery of all costs incurred to comply with the U.S. Department of Energy’s emergency 202(c) orders. Indiana Electric has also filed an application with the IURC in Cause No. 46350 to recover any compliance costs associated with the emergency 202(c) orders that are not recovered through the FERC proceedings. On April 15, 2026, Indiana Electric filed a Motion to Intervene in the United States Court of Appeals for the D.C. Circuit in response to the Public Interest Organizations’ appeal of the December 2025 DOE Order. Indiana Electric intervened as the owner of F.B. Culley 2 that is the subject of the DOE Order representing Indiana Electric’s authority to recover the costs it has incurred to comply with the DOE Order. On May 8, 2026, the D.C. Circuit granted Indiana Electric’s motion to intervene and consolidated Indiana Electric’s case with the Public Interest Organizations’ appeal of the DOE emergency 202(c) order issued to Northern Indiana Public Service Company in December 2025 for its Schahfer plant. On June 29, 2026, the D.C. Circuit granted the U.S. Department of Energy’s unopposed motion to hold the consolidated appeals of the Culley and Schahfer DOE 202(c) orders in abeyance pending disposition of the People of the State of Michigan v. United States Department of Energy (the appeal of DOE’s 202(c) order issued to the Consumer Energy Company’s Campbell plant.) A modification to Indiana Electric’s wastewater discharge permit for F.B Culley Unit 2 has been proposed that would provide for the continued utilization of bottom ash transport water at the facility during the pendency of the DOE Order. The public comment period for the proposed modification closed on July 20, 2026, with a final agency decision expected later in the third quarter of 2026. On July 20, 2026, the Sierra Club and Environmental Law & Policy Center filed a petition with the United States Court of Appeals for the D.C. Circuit for review of FERC’s March 19, 2026 order related to the cost recovery/cost allocation mechanism and FERC’s subsequent procedural denial of the rehearing requests on the March 19th order.

Previous wording

Indiana Electric is evaluating legislation passed in 2026, including the following pieces of legislation that became law in Indiana’s 124th General Assembly:

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Indiana Electric is actively working to comply with legislation passed in 2026, particularly, the following pieces of legislation that became law in Indiana’s 124th General Assembly:

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House Enrolled Act 1002, a multi-faceted bill aimed at improving the affordability of electric rates, would do the following:

Current wording

House Enrolled Act 1002, a multi-faceted law aimed at improving the affordability of electric rates, includes the following provisions:

Previous wording

Pursuant to House Enrolled Act 1002, Indiana Electric is required to file a multi-year rate case in January 2028.

Current wording

Pursuant to House Enrolled Act 1002 (HEA 1002), Indiana Electric is required to file a multi-year rate case in January 2028. On July 15, 2026, the IURC opened two investigations related to the implementation of the new multi-year rate plan (“MYRP”) framework established under HEA 1002. In Cause No. 46428, the IURC will examine potential risks and changes in risks to Indiana electric utilities and their customers resulting from implementation of MYRPs, including consideration of historical authorized-return frameworks and the establishment of a reasonable baseline for evaluating any changes in risk. In Cause No. 46429, the IURC will investigate cost recovery mechanisms within the MYRP framework, including the potential role of capital and expense trackers and the development of reasonable and quantifiable criteria governing their use.

Previous wording

On May 17, 2023, the Registrants filed a joint shelf registration statement with the SEC registering indeterminate principal amounts of Houston Electric’s general mortgage bonds, CERC Corp.’s senior debt securities and CenterPoint Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of shares of Common Stock, shares of preferred stock, depositary shares, as well as stock purchase contracts and equity units. The joint shelf registration statement will expire on May 17, 2026. For information related to the Registrants’ issuances of securities to date in 2026, see Note 9 to the Interim Condensed Financial Statements.

Current wording

On May 15, 2026, the Registrants filed a joint shelf registration statement with the SEC registering indeterminate principal amounts of Houston Electric’s general mortgage bonds, CERC Corp.’s senior debt securities and CenterPoint Energy’s senior debt securities and junior subordinated debt securities and an indeterminate number of shares of Common Stock, shares of preferred stock, depositary shares, as well as stock purchase contracts and equity units. The joint shelf registration statement will expire on May 15, 2029. For information related to the Registrants’ debt issuances in 2026, see Note 9 to the Interim Condensed Financial Statements.

Previous wording

For information related to shares of Common Stock sold pursuant to the forward sale agreements and the Equity Distribution Agreement in 2025, see Note 15 to the Interim Condensed Financial Statements. No shares of Common Stock were sold or issued pursuant to a forward sale agreement or the Equity Distribution Agreement during the three months ended March 31, 2026.

Current wording

For information related to shares of Common Stock sold or issued pursuant to the forward sale agreements and the 2026 Equity Distribution Agreement, see Note 15 to the Interim Condensed Financial Statements.

Previous wording

Pipeline tariffs and contracts typically provide that if the credit ratings of a shipper or the shipper’s guarantor drop below a threshold level, which is generally investment grade ratings from both Moody’s and S&P, cash or other collateral may be demanded from the shipper in an amount equal to the sum of three months’ charges for pipeline services plus the unrecouped cost of any lateral built for such shipper. If the credit ratings of CERC Corp. decline below the applicable threshold levels, CERC might need to provide cash or other collateral of up to $233 million as of March 31, 2026. The amount of collateral will depend on seasonal variations in transportation levels.

Current wording

Pipeline tariffs and contracts typically provide that if the credit ratings of a shipper or the shipper’s guarantor drop below a threshold level, which is generally investment grade ratings from both Moody’s and S&P, cash or other collateral may be demanded from the shipper in an amount equal to the sum of three months’ charges for pipeline services plus the unrecouped cost of any lateral built for such shipper. If the credit ratings of CERC Corp. decline below the applicable threshold levels, CERC might need to provide cash or other collateral of up to $232 million as of June 30, 2026. The amount of collateral will depend on seasonal variations in transportation levels.

Previous wording

If CenterPoint Energy’s creditworthiness were to drop such that ZENS holders thought CenterPoint Energy’s liquidity was adversely affected or the market for the ZENS were to become illiquid, some ZENS holders might decide to exchange their ZENS for cash. Funds for the payment of cash upon exchange could be obtained from the sale of the shares of ZENS-Related Securities that CenterPoint Energy owns or from other sources. CenterPoint Energy owns shares of ZENS-Related Securities equal to approximately 100% of the reference shares used to calculate its obligation to the holders of the ZENS. ZENS exchanges result in a cash outflow because tax deferrals related to the ZENS and shares of ZENS-Related Securities would typically be reversed when ZENS are exchanged or otherwise retired and shares of ZENS-Related Securities are sold. The ultimate tax liability related to the ZENS and ZENS-Related Securities continues to increase by the amount of the tax benefit realized each year, and there could be a cash outflow when the taxes are paid as a result of the retirement or exchange of the ZENS. If all ZENS had been exchanged for cash on March 31, 2026, deferred taxes of approximately $911 million would have been payable in 2026, subject to reduction on account of available net operating loss carryforwards and CAMT carryforwards. If all the ZENS-Related Securities had been sold on March 31, 2026, capital gains taxes of approximately $81 million would have been payable in 2026 based on 2026 tax rates in effect. As of March 31, 2026, CenterPoint Energy had both net operating loss and CAMT carryforwards available from its filed 2024 federal income tax return that can be applied to largely offset the cash outflow that would result from a retirement or exchange of the ZENS. For additional information about ZENS, see Note 8 to the Interim Condensed Financial Statements.

Current wording

If CenterPoint Energy’s creditworthiness were to drop such that ZENS holders thought CenterPoint Energy’s liquidity was adversely affected or the market for the ZENS were to become illiquid, some ZENS holders might decide to exchange their ZENS for cash. Funds for the payment of cash upon exchange could be obtained from the sale of the shares of ZENS-Related Securities that CenterPoint Energy owns or from other sources. CenterPoint Energy owns shares of ZENS-Related Securities equal to approximately 100% of the reference shares used to calculate its obligation to the holders of the ZENS. ZENS exchanges result in a cash outflow because tax deferrals related to the ZENS and shares of ZENS-Related Securities would typically be reversed when ZENS are exchanged or otherwise retired and shares of ZENS-Related Securities are sold. The ultimate tax liability related to the ZENS and ZENS-Related Securities continues to increase by the amount of the tax benefit realized each year, and there could be a cash outflow when the taxes are paid as a result of the retirement or exchange of the ZENS. If all ZENS had been exchanged for cash on June 30, 2026, deferred taxes of approximately $964 million would have been payable in 2026, subject to reduction on account of available net operating loss carryforwards and CAMT carryforwards. If all the ZENS-Related Securities had been sold on June 30, 2026, capital gains taxes of approximately $49 million would have been payable in 2026 based on 2026 tax rates in effect. As of June 30, 2026, CenterPoint Energy had both net operating loss and CAMT carryforwards available from its filed 2024 federal income tax return that can be applied to largely offset the cash outflow that would result from a retirement or exchange of the ZENS. For additional information about ZENS, see Note 8 to the Interim Condensed Financial Statements.

Previous wording

From time to time, the Registrants consider the acquisition or the disposition of assets or businesses or possible joint ventures, strategic initiatives or other joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the associated potential capital commitments are unpredictable. The Registrants may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances. Debt or equity financing may not, however, be available to the Registrants at that time due to a variety of events, including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions and market perceptions. As announced in February 2026, CenterPoint Energy has increased its planned capital expenditures in its Electric and Natural Gas businesses pursuant to its new 10-year capital plan, which calls for investment of at least $65.5 billion through 2035, and CenterPoint Energy may continue to increase such planned capital investments in the future. The Registrants may continue to explore asset sales as a means to efficiently finance a portion of their increased capital expenditures in the future, subject to the considerations listed above. For further information, see Note 3 to the Interim Condensed Financial Statements.

Current wording

From time to time, the Registrants consider the acquisition or the disposition of assets or businesses or possible joint ventures, strategic initiatives or other joint ownership arrangements with respect to assets or businesses. Any determination to take action in this regard will be based on market conditions and opportunities existing at the time, and accordingly, the timing, size or success of any efforts and the associated potential capital commitments are unpredictable. The Registrants may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances. Debt or equity financing may not, however, be available to the Registrants at that time due to a variety of events, including, among others, maintenance of our credit ratings, industry conditions, general economic conditions, market conditions and market perceptions. As announced in July 2026, CenterPoint Energy has increased its planned capital expenditures in its Electric and Natural Gas businesses pursuant to its updated 10-year capital plan, which calls for investment of at least $66.7 billion through 2035, and CenterPoint Energy may continue to increase such planned capital investments in the future. The Registrants may continue to explore asset sales as a means to efficiently finance a portion of their increased capital expenditures in the future, subject to the considerations listed above. For further information, see Note 3 to the Interim Condensed Financial Statements.

Previous wording

•restoration costs and revenue losses resulting from future natural disasters such as hurricanes or other severe weather events and the timing of and amounts sought for recovery of such restoration costs; and

Current wording

•restoration costs and revenue losses resulting from future natural disasters such as hurricanes or other severe weather events and the timing of and amounts sought for recovery of such restoration costs;

Previous wording

A critical accounting policy is one that is both important to the presentation of the Registrants’ financial condition and results of operations and requires management to make difficult, subjective or complex accounting estimates. An accounting estimate is an approximation made by management of a financial statement element, item or account in the financial statements. Accounting estimates in the Registrants’ historical consolidated financial statements measure the effects of past business transactions or events, or the present status of an asset or liability. Additionally, different estimates that the Registrants could have used or changes in an accounting estimate that are reasonably likely to occur could have a material impact on the presentation of their financial condition, results of operations or cash flows. The circumstances that make these judgments difficult, subjective and/or complex have to do with the need to make estimates about the effect of matters that are inherently uncertain. Estimates and assumptions about future events and their effects cannot be predicted with certainty. The Registrants base their estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances, the results of which form the basis for making judgments. These estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Registrants’ operating environment changes. Our critical accounting policies that we deemed the most material in nature were reported in our combined 2025 Form 10-K. There has been no material changes with regard to these critical accounting policies.

Current wording

A critical accounting policy is one that is both important to the presentation of the Registrants’ financial condition and results of operations and requires management to make difficult, subjective or complex accounting estimates. An accounting estimate is an approximation made by management of a financial statement element, item or account in the financial statements. Accounting estimates in the Registrants’ historical consolidated financial statements measure the effects of past business transactions or events, or the present status of an asset or liability. Additionally, different estimates that the Registrants could have used or changes in an accounting estimate that are reasonably likely to occur could have a material impact on the presentation of their financial condition, results of operations or cash flows. The circumstances that make these judgments difficult, subjective and/or complex have to do with the need to make estimates about the effect of matters that are inherently uncertain. Estimates and assumptions about future events and their effects cannot be predicted with certainty. The Registrants base their estimates on historical experience and on various other assumptions that they believe to be reasonable under the circumstances, the results of which form the basis for making judgments. These estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the Registrants’ operating environment changes. Our critical accounting policies that we deemed the most material in nature were reported in our combined 2025 Form 10-K. There have been no material changes with regard to these critical accounting policies.