CENTERPOINT ENERGY HOUSTON ELECTRIC LLC

Cash Flows

The following table summarizes the Registrants’ cash flows by category for the periods presented:

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

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

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

Future Sources and Uses of Cash

The liquidity and capital requirements of the Registrants are affected primarily by results of operations, capital expenditures, storm restoration costs, debt service requirements, tax payments, working capital needs and various regulatory actions. Future capital expenditures are expected to primarily relate to investments in infrastructure. These capital expenditures are anticipated to enhance the safety, reliability and resiliency of our systems and deliver consistent value for stakeholders across the Registrants’ jurisdictions. In addition to dividend payments on CenterPoint Energy’s Common Stock and interest payments on debt, the Registrants’ principal anticipated cash requirements for the remainder of 2026 include the following:

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, which closed on October 1, 2026, 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.

Off-Balance Sheet Arrangements

Other than Houston Electric’s general mortgage bonds issued as collateral for tax-exempt long-term debt of CenterPoint Energy as discussed in Note 9 and guarantees as discussed in Note 11(b) to the Interim Condensed Financial Statements, the Registrants have no off-balance sheet arrangements.

Regulatory Matters

TEEEF (CenterPoint Energy and Houston Electric)

For information about TEEEF, see Note 6 to the Interim Condensed Financial Statements.

Hurricane Beryl (CenterPoint Energy and Houston Electric)

For additional information about the recovery of costs incurred in connection with Hurricane Beryl, see Note 6 to the Interim Condensed Financial Statements.

Indiana Electric CPCN (CenterPoint Energy)

PPAs

On August 25, 2021, Indiana Electric filed with the IURC seeking approval to purchase 150 MW of solar power, under a 20-year PPA, from Origis, which is developing a solar project in Knox County, Indiana. On May 4, 2022, the IURC issued an order approving Indiana Electric to enter into the Knox County PPA. In March 2022, when the results of the MISO interconnection study were completed, Origis advised Indiana Electric that the costs to construct the solar project in Knox County, Indiana had increased largely due to escalating commodity and supply chain costs impacting manufacturers worldwide. In August 2022, Indiana Electric and Origis entered into an amended PPA, which reiterated the terms contained in the 2021 PPA with certain modifications. On February 22, 2023, the IURC approved the Knox County solar amended PPA; however, due to MISO interconnection delays, the project in-service date was delayed from 2024 to 2026. The facility became operational on February 27, 2026. The power purchase costs will be recovered through the fuel adjustment clause proceedings over the term of the PPA.

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.

F.B. Culley Unit 2 (CenterPoint Energy)

While preferred portfolios in Indiana Electric’s 2025 IRP (similar to previous IRPs) 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, June 2026 and September 2026 directing Indiana Electric to continue operating the unit through December 18, 2026. Indiana Electric filed a complaint with the FERC to request creation of a cost recovery/cost allocation mechanism, and 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 Unit 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 May 2025 202(c) order issued to the Consumers Energy Company’s Campbell plant). In that case regarding the Campbell plant, the D.C. Circuit on September 11, 2026 vacated the DOE’s May 2025 202(c) Campbell plant order, finding that DOE had exceeded its authority because the circumstances did not constitute the type of emergency contemplated by the statute. 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. Indiana Electric received the final permit modification in August 2026 with an effective date of September 1, 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 19 order. On August 12, 2026, Indiana Electric filed a Motion to Intervene in the D.C. Circuit in response to the Sierra Club and Environmental Law & Policy Center’s appeal of the FERC’s March 19 Order granting Indiana Electric’s Section 202(c) cost allocation complaint against MISO. Indiana Electric intervened as the owner of F.B. Culley Unit 2 that is the subject of the underlying FERC Order at issue on appeal. On August 20, 2026, FERC filed an unopposed motion to hold in abeyance the appeal of its March 19 Order, which was granted on September 1, 2026, pending the outcome of the consolidated Culley and Schahfer DOE Order appeals, which were themselves being held in abeyance pending the outcome of the Consumers Energy DOE Order appeal.

Indiana Legislation (CenterPoint Energy)

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:

Senate Enrolled Act 240 Surplus Interconnection Service (SIS) defines SIS as any portion of service that has not been used and is not reasonably expected to be needed; the use of which would result in the total amount of interconnection service at the point of interconnection remaining the same. The new law requires an electric utility to include an analysis of the potential for SIS to meet the immediate needs for capacity and energy at the utility-owned facilities in integrated resource plans. It also requires the IURC to consider whether a utility that has filed for approval of a certificate of public convenience and necessity has conducted a SIS analysis and whether the proposed construction will allow for the use of SIS.

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

•beginning in 2026, require an electric utility to file a multi-year rate plan according to a prescribed schedule;

•apply a customer affordability performance metric and a service restoration performance metric to each year of the multi-year rate plan and use such metric to provide financial rewards or penalties based on the electricity supplier’s measured performance of the metric;

•require an electric utility to offer a low income customer assistance program by July 1, 2026 to be funded by at least 0.2% of jurisdictional revenues for residential customers and allow the utility to seek recovery of eligible program costs;

•prohibit an electric utility from terminating service to any customer on a day forecasted by the National Weather Service to have a heat index of at least 95 degrees Fahrenheit;

•modify the IURC’s authority related to use of emergency powers;

•apply a levelized billing plan to residential customers who are eligible and have applied for the Low Income Housing Energy Assistance Program; and

•require an electric utility to report certain residential customer data to the Office of the Utility Consumer Counselor on a quarterly basis.

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. On August 7, 2026, all Indiana electric utilities jointly participated in two technical conferences convened by the IURC to frame and clarify the issues to be addressed during the IURC’s investigations. Following the conferences, the Indiana electric utilities collaborated in submitting a proposed list of issues for consideration in the two proceedings. After reviewing the submissions by the Indiana electric utilities and other parties, the IURC finalized the issues list on September 24, 2026, defining the scope of the investigations and providing guidance on the topics for which the parties should submit prefiled testimony. On that same date, the IURC published the procedural schedules for prefiled testimony to be submitted on December 4, 2026; responsive testimony to be submitted on January 13, 2027; and an evidentiary hearing for both proceedings scheduled for the first half of 2027. At this time, Indiana Electric cannot predict the outcome of either investigation or the potential impact, if any, that these proceedings may have on its future rates, cost recovery mechanisms, authorized returns, or financial condition.

Texas Legislation (CenterPoint Energy, Houston Electric and CERC)

The Registrants are actively working to comply with legislation passed in 2025 and associated PUCT rulemaking projects, including the following pieces of legislation that became law during the 89th Texas Legislature:

•House Bill 4384, effective June 20, 2025, allows LDCs to recover post in-service carry costs (PISCC) in GRIP filings. This allows LDCs to defer for future recovery as a regulatory asset PISCC, depreciation expense and ad valorem taxes associated with unrecovered gross plant.

•Senate Bill 231, effective June 20, 2025, provides that, on or after the effective date, TDUs may only enter into, renew or extend leases for TEEEF units with a maximum generation capacity of 5 or fewer MW and that are rapidly deployable, and that they may enter into leases without prior PUCT preapproval (as required by the TEEEF Rule) in the case of an emergency or if the lease includes a provision allowing for the alteration of the lease based on applicable PUCT orders or rules.

•Senate Bill 1963, effective September 1, 2025, allows ERCOT utilities to securitize system restoration costs using a third-party government agency, which may allow for the debt to be off balance sheet and an abbreviated proceeding timeline. This bill also lowered the system restoration costs threshold from $100 million to $50 million, provided the effectiveness tests are met.

•Senate Bill 6, effective June 20, 2025, establishes a standardized process for connecting large-load customers within ERCOT in a manner designed to support business development in Texas while minimizing the potential for stranded infrastructure costs and maintaining system reliability.

CSIA 3.0 (CenterPoint Energy)

On June 2, 2026, Indiana North and Indiana South filed their petitions and cases-in-chief with the IURC requesting, among other things, approval of their seven-year plan for transmission, distribution, and storage improvements pursuant to Indiana Code (TDSIC Plan); and their three-year schedule of compliance projects pursuant to Indiana Code (Compliance Projects). The request for the seven-year TDSIC Plan (2027-2033) was for an estimated $902 million (Indiana North) and $211 million (Indiana South); and the request for three-year schedule of Compliance Projects (2027-2029) was for an estimated $679 million (Indiana North) and $160 million (Indiana South). On September 14, 2026, after filing corrections to the TDSIC Plan in August which reduced the previously stated amounts, Indiana North and Indiana South filed amended petitions and testimony with the IURC to modify their requested relief by removing from their request all relief related to TDSIC improvements under Indiana Code (approximately $876 million for Indiana North and $204 million for Indiana South); and maintaining their requested relief associated with the three-year schedule of compliance activities (approximately $679 million for Indiana North and $160 million for Indiana South). Because of the amended filing, the procedural schedule was modified, with rebuttal testimony due November 4, 2026 and an evidentiary hearing scheduled for November 17, 2026.

Rate Change Applications

The Registrants are routinely involved in rate change applications before state regulatory authorities. Those applications include general rate cases, where the entire cost of service of the utility is assessed and reset. In addition, the Registrants are periodically involved in proceedings to adjust their capital tracking mechanisms (e.g., CSIA, DCRF, CEP, DRR, GRIP, TCOS, ECA, CECA and TDSIC), their decoupling mechanisms (e.g., decoupling and SRC), and their energy efficiency cost trackers (e.g., CIP, DSMA, EECRF, EEFC and EEFR).

The table below reflects significant applications pending or completed since the Registrants’ combined 2025 Form 10-K was filed with the SEC through the date of the filing of this combined Form 10-Q:

(1)Represents proposed increases (decreases) when effective date and/or approval date is not yet determined. Approved rates could differ materially from proposed rates.

GHG Emissions and Climate-Related Regulation and Compliance (CenterPoint Energy)

The issue of climate change has received focus at the state, federal and international level, and there are trends and uncertainties relating to GHG emissions and climate-related regulations and compliance that affect the Registrants. On February 18, 2026, the US EPA rescinded the 2009 endangerment finding in relation to GHG standards for mobile sources. Uncertainties remain as to the effect of the rescission on the GHG standards for fossil fuel-fired power plants, which are similarly being challenged on judicial review, and the effects of the rescission on preemption of state law. Compliance costs and other effects associated with climate change, reductions in GHG emissions and obtaining renewable energy sources remain uncertain; nevertheless, any new regulation or legislation relating to climate change will likely result in an increase in compliance costs. CenterPoint Energy will continue to monitor regulatory activity regarding GHG emission standards that may affect its business. Currently, CenterPoint Energy does not purchase carbon credits. In connection with its energy transition goals, CenterPoint Energy is expected to purchase carbon credits in the future; however, CenterPoint Energy does not currently expect the number of credits, or cost for those credits, to be material.

Climate Risk Trends and Uncertainties

There are climate risk trends and uncertainties that affect the Registrants. Changes in the U.S. presidential administration and significant expected increases in electric demand, as announced by organizations such as ERCOT and MISO, have shifted the energy landscape in the United States. This shift in federal domestic energy policy has resulted in uncertainty with respect to the scope and speed of future renewable generation infrastructure development and the role that existing renewable generation will play in support of the U.S. energy grid. The long-term impacts of this domestic energy policy shift are also uncertain, including with respect to impacts on the development of, and consequently the availability of, alternative energy sources (such as solar energy, including private solar, wind energy, microturbines, fuel cells, energy-efficient buildings and energy storage devices). Additionally, it is unclear whether, and if so how, the new domestic energy policy, including the potential suspension, revision or rescission of regulations restricting emissions (including methane emissions), and the repeal of the Endangerment Finding, will affect consumers’ and companies’ energy use, adoption of alternative energy sources or decisions to expand their facilities, including natural gas facilities.

Other Matters

Credit Facilities

The Registrants may draw on their respective revolving credit facilities from time to time to provide funds used for general corporate and limited liability company purposes, including to backstop CenterPoint Energy’s, Houston Electric’s and CERC’s commercial paper programs. The facilities may also be utilized to obtain letters of credit. For further details related to the Registrants’ revolving credit facilities, see Note 9 to the Interim Condensed Financial Statements.

On September 9, 2026, CenterPoint Energy, Houston Electric, CERC and SIGECO replaced their existing revolving credit facilities with four revolving credit facilities totaling $4.6 billion in aggregate commitments. Based on the consolidated debt to capitalization covenant in the Registrants’ revolving credit facilities, the Registrants would have been permitted to utilize the full capacity of such revolving credit facilities as of September 30, 2026. As of October 21, 2026, the Registrants had the following revolving credit facilities and utilization of such facilities:

(1)This credit facility was issued by SIGECO.

The Registrants and SIGECO are currently in compliance with the various business and financial covenants in the four revolving credit facilities.

Debt Transactions

For detailed information about the Registrants’ debt transactions to date in 2026, see Note 9 to the Interim Condensed Financial Statements.

Securities Registered with the SEC

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.

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.

Money Pool

The Registrants participate in a money pool through which they and certain of their subsidiaries can borrow or invest on a short-term basis. Funding needs are aggregated and external borrowing or investing is based on the net cash position. The net funding requirements of the CenterPoint Energy money pool are expected to be met with borrowings under CenterPoint Energy’s revolving credit facility or the sale of CenterPoint Energy’s commercial paper. The net funding requirements of Houston Electric are expected to be met with borrowings from the CenterPoint Energy money pool, borrowings under Houston Electric's revolving credit facility or the sale of Houston Electric's commercial paper. The net funding requirements of the

CERC money pool are expected to be met with borrowings under CERC’s revolving credit facility or the sale of CERC’s

commercial paper.

The table below summarizes CenterPoint Energy money pool activity by Registrant as of October 21, 2026:

Impact on Liquidity of a Downgrade in Credit Ratings

The interest rate on borrowings under the credit facilities is based on the respective credit rating of each borrower. As of October 21, 2026, Moody’s, S&P and Fitch had assigned the following credit ratings to the borrowers:

(1)A Moody’s rating outlook is an opinion regarding the likely direction of an issuer’s rating over the medium term.

(2)An S&P outlook assesses the potential direction of a long-term credit rating over the intermediate to longer term.

(3)A Fitch rating outlook indicates the direction a rating is likely to move over a one- to two-year period.

The Registrants cannot assure that the ratings set forth above will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency. The Registrants note that these credit ratings are included for informational purposes and are not recommendations to buy, sell or hold the Registrants’ securities and may be revised or withdrawn at any time by the rating agency. Each rating should be evaluated independently of any other rating. Any future reduction or withdrawal of one or more of the Registrants’ credit ratings could have a material adverse impact on the Registrants’ ability to obtain short- and long-term financing, the cost of such financings and the execution of the Registrants’ commercial strategies.

A decline in credit ratings could increase borrowing costs under the Registrants’ revolving credit facilities. If the Registrants’ credit ratings had been downgraded one notch by S&P and Moody’s from the ratings that existed as of September 30, 2026, the impact on the borrowing costs under the four revolving credit facilities would have been insignificant. A decline in credit ratings would also increase the interest rate on long-term debt to be issued in the capital markets and could negatively impact the Registrants’ ability to complete capital market transactions and to access the commercial paper market. Additionally, a decline in credit ratings could increase cash collateral requirements and reduce earnings of CenterPoint Energy’s and CERC’s Natural Gas reportable segments.

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 $230 million as of September 30, 2026. The amount of collateral will depend on seasonal variations in transportation levels.

ZENS and Securities Related to ZENS (CenterPoint Energy)

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 September 30, 2026, deferred taxes of approximately $983 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 September 30, 2026, capital gains taxes of approximately $53 million would have been payable in 2026 based on 2026 tax rates in effect. As of September 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.

Cross Defaults

Under the Registrants’ respective revolving credit facilities, a payment default on, or a non-payment default, event or condition that results in the acceleration of, any indebtedness for borrowed money and certain other specified types of obligations (including guarantees) exceeding $150 million by the borrower or any of their respective significant subsidiaries will cause a default under such borrower’s respective credit facility or term loan agreement. Under SIGECO’s revolving credit facility, a payment default on, or a non-payment default, event or condition that results in the acceleration of, any indebtedness for borrowed money and certain other specific types of obligations (including guarantees) exceeding $100 million by SIGECO or any of its significant subsidiaries will cause a default under SIGECO’s credit facility. A default by CenterPoint Energy would not trigger a default under its subsidiaries’ debt instruments or revolving credit facilities.

Possible Acquisitions, Divestitures and Joint Ventures

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 October 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 $70.7 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.

On October 20, 2025, CenterPoint Energy, through CERC Corp., entered into the Ohio Securities Purchase Agreement to sell all of the issued and outstanding equity interests in CEOH for total consideration of approximately $2.62 billion, subject to adjustment as set forth in the Ohio Securities Purchase Agreement. The transaction closed on October 1, 2026. For further information, see Note 3 and Note 16 to the Interim Condensed Financial Statements.

Collection of Receivables from REPs (CenterPoint Energy and Houston Electric)

Houston Electric’s receivables from the distribution of electricity are collected from REPs that supply the electricity Houston Electric distributes to their customers. Before conducting business, a REP must register with the PUCT and must meet certain financial qualifications. Nevertheless, adverse economic conditions, weather events such as the February 2021 Winter Storm Event, structural problems in the market served by ERCOT or financial difficulties of one or more REPs could impair the ability of these REPs to pay for Houston Electric’s services or could cause them to delay such payments. Houston Electric depends on these REPs to remit payments on a timely basis, and any delay or default in payment by REPs could adversely affect Houston Electric’s cash flows. In the event of a REP default, Houston Electric’s tariff provides a number of remedies, including the option for Houston Electric to request that the PUCT suspend or revoke the certification of the REP. Applicable regulatory provisions require that customers be shifted to another REP or a provider of last resort if a REP cannot make timely payments. However, Houston Electric remains at risk for payments related to services provided prior to the shift to the replacement REP or the provider of last resort. If a REP were unable to meet its obligations, it could consider, among various options, restructuring under the bankruptcy laws, in which event such REP might seek to avoid honoring its obligations and claims might be made against Houston Electric involving payments it had received from such REP. If a REP were to file for bankruptcy, Houston Electric may not be successful in recovering accrued receivables owed by such REP that are unpaid as of the date the REP filed for bankruptcy. However, PUCT regulations authorize utilities, such as Houston Electric, to defer bad debts resulting from defaults by REPs for recovery in future rate cases, subject to a review of reasonableness and necessity.

Other Factors that Could Affect Cash Requirements

In addition to the above factors, the Registrants’ liquidity and capital resources could also be negatively affected by:

•cash collateral requirements that could exist in connection with certain contracts, including weather hedging arrangements, and natural gas purchases, natural gas price and natural gas storage activities of CenterPoint Energy’s and CERC’s Natural Gas reportable segment;

•acceleration of payment dates on certain gas supply contracts, under certain circumstances, as a result of increased natural gas prices, and concentration of natural gas suppliers (CenterPoint Energy and CERC);

•increased costs related to the acquisition of natural gas (CenterPoint Energy and CERC);

•increased costs of certain goods, materials or services due to, among other things, supply chain disruptions, inflation, labor shortages, scarcity of materials and changes in U.S. or foreign trade policy (including tariffs or other trade actions);

•increases in interest expense in connection with debt refinancings and borrowings under credit facilities or term loans or the use of alternative sources of financings, including financings due to the May 2024 Storm Events and Hurricane Beryl;

•various legislative, executive or regulatory actions at the federal, state and local levels, including actions in response to Hurricane Beryl and actions pertaining to U.S. or foreign trade policy (including tariffs or other trade actions) or other geopolitical matters;

•incremental collateral, if any, that may be required due to regulation of derivatives (CenterPoint Energy);

•the timing and outcome of rate actions regarding our recovery of costs and ability to make a reasonable return on investment;

•the ability of REPs, including REP affiliates of NRG and Vistra Energy Corp., to satisfy their obligations to CenterPoint Energy and Houston Electric;

•slower customer payments and increased write-offs of receivables due to higher natural gas prices, changing economic conditions, public health threats or severe weather events, such as the May 2024 Storm Events and Hurricane Beryl;

•the satisfaction of any obligations pursuant to guarantees;

•the outcome of litigation, including litigation related to the February 2021 Winter Storm Event and Hurricane Beryl;

•contributions to pension and postretirement benefit plans;

•recovery of any losses under applicable insurance policies;

•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;

•the required return to customers of contributions in aid of construction or financial security in connection with proposed large-load interconnection projects; and

•various other risks identified in “Risk Factors” in Part I, Item 1A of the Registrants’ combined 2025 Form 10-K, which are incorporated herein by reference, in Part II, Item 1A of this combined Form 10-Q, and in other reports that the Registrants file from time to time with the SEC.

Certain Contractual Limits on Our Ability to Issue Securities and Borrow Money

Certain provisions in certain note purchase agreements relating to debt issued by CERC have the effect of restricting the amount of secured debt issued by CERC and debt issued by subsidiaries of CERC Corp. Additionally, Houston Electric and SIGECO are limited in the amount of mortgage bonds they can issue by the General Mortgage and SIGECO’s mortgage indenture, respectively. For information about the total debt to capitalization financial covenants in the Registrants’ and SIGECO’s revolving credit facilities, see Note 9 to the Interim Condensed Financial Statements.

CRITICAL ACCOUNTING POLICIES

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.