Southern Company

    SOJC ·NYSE ·Electric Services ·Inc. in DE
    Other securities: SO SOJD SOJE SOJF SOMN
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    data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

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    From 10-Q filed 2026-07-30 (period ending 2026-06-30).

        Table of Contents                                Index to Financial Statements
    Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
    The following Management's Discussion and Analysis of Financial Condition and Results of Operations is a combined presentation; however, information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf and each Registrant makes no representation as to information related to the other Registrants.
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS
    OVERVIEW
    Southern Company is a holding company that owns all of the common stock of three traditional electric operating companies (Alabama Power, Georgia Power, and Mississippi Power), Southern Power, and Southern Company Gas and owns other direct and indirect subsidiaries. The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. Southern Company's reportable segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the distribution of natural gas and sale of other complementary products and services by Southern Company Gas. Alabama Power, Georgia Power, and Mississippi Power each operate with one reportable business segment, since substantially all of their business is providing electric service to customers. Southern Power also operates its business with one reportable business segment, the sale of electricity in the competitive wholesale market. Southern Company Gas' reportable segments are gas distribution operations, gas pipeline investments, and gas marketing services. See Note (L) to the Condensed Financial Statements herein for additional information on segment reporting. For additional information on the Registrants' primary business activities, see BUSINESS – "The Southern Company System" in Item 1 of the Form 10-K.
    The Registrants continue to focus on several key performance indicators. For the traditional electric operating companies and Southern Company Gas, these indicators include, but are not limited to, customer satisfaction, plant availability, electric and natural gas system reliability, and execution of major construction projects. Southern Company Gas also continues to focus on several operating metrics, including customer count and volumes of natural gas sold. For Southern Power, key performance indicators include, but are not limited to, the equivalent forced outage rate and contract availability to evaluate operating results and help ensure its ability to meet its contractual commitments to customers. In addition, Southern Company and the Subsidiary Registrants focus on earnings per share and net income, respectively, as a key performance indicator.
    Recent Developments
    Alabama Power
    In December 2025, the Alabama PSC issued a consent order to keep retail rates stable through 2027. On April 2, 2026, the State of Alabama enacted legislation providing that retail base rates established and in place on October 1, 2026 may not be increased before January 1, 2029 for utilities that are regulated by the Alabama PSC and that provide retail electric service. The ultimate outcome of this matter cannot be determined at this time. See Note 2 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.
    Georgia Power
    On May 28, 2026, the Georgia PSC approved a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors regarding Georgia Power's separate filings in February 2026 associated with recovery of fuel and storm restoration costs. The approved stipulation decreased annual fuel billings by 12.9%, or approximately $394 million, effective June 1, 2026. Under the stipulation, the Georgia PSC approved the following related to storm restoration costs:
    •Recovery of $31 million annually for storm restoration costs incurred after December 31, 2025.
    •Recovery of Georgia Power's adjusted regulatory asset balance totaling $869 million, as determined through the proceedings and stipulation, related to storm damage as of December 31, 2025 over a period of 67 months from June 1, 2026 through December 31, 2031, or $156 million annually.
    Additionally, the stipulation provided for the treatment of the Internal Revenue Code §45U PTCs generated from Georgia Power's nuclear generating facilities in 2024 and 2025, in which Georgia Power agreed to use $77 million of these tax credits for the benefit of customers.
    See Note (B) to the Condensed Financial Statements under "Georgia Power" herein for additional information.
    91
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    Mississippi Power
    On June 18, 2026, the Mississippi PSC approved Mississippi Power's annual retail PEP Evaluation Report for 2026, resulting in an annual increase in revenues of approximately 1.8%, or $20 million, primarily due to increases in investment and depreciation. In accordance with the PEP rate schedule, the increase became effective with the first billing cycle of January 2026. In the PEP filing, the Mississippi PSC approved the use of approximately $7 million of the reliability reserve balance, which Mississippi Power utilized for reliability-related generation, transmission, and distribution expenses during the first six months of 2026. In conjunction with the PEP filing, the Mississippi PSC approved approximately $21 million associated with certain federal excess accumulated deferred income taxes resulting from the Tax Reform Legislation to be credited back to customers over an 18-month period starting with the first billing cycle of July 2026.
    See Note (B) to the Condensed Financial Statements under "Mississippi Power" herein for additional information.
    Southern Power
    In the first quarter 2026, Southern Power committed to development projects to upgrade certain turbines at its existing Franklin and Wansley natural gas facilities, which are projected to add up to 400 MWs of incremental capacity. Commercial operations for the incremental capacity at the natural gas facilities are projected to occur between the second quarter 2029 and the fourth quarter 2030. The ultimate outcome of these matters cannot be determined at this time. In addition, during the first six months of 2026 and subsequent to June 30, 2026, Southern Power placed in service all 200 MWs of the repowering project at the Kay wind facility. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.
    At June 30, 2026, Southern Power's average investment coverage ratio for its generating assets, including those owned with various partners, based on the ratio of investment under contract to total investment using the respective facilities' net book value (or expected in-service value for facilities under construction) as the investment amount was 97% through 2030 and 88% through 2035, with an average remaining contract duration of approximately 12 years.
    Southern Company Gas
    On June 16, 2026, in connection with Nicor Gas' 2023 general base rate case proceeding, the Illinois Appellate Court determined that the Illinois Commission did not provide sufficient support for its disallowance of $43 million of Nicor Gas' planned capital investments that were expected to be completed by December 31, 2024. As the disallowance related to planned capital investments for which costs had not yet been incurred, it was not included in the pre-tax charge to income recorded in 2023. This matter remains subject to further proceedings before the Illinois Commission and had no impact on the current period financial statements.
    On July 21, 2026, Nicor Gas filed a petition for leave to appeal with the Illinois Supreme Court related to the capital structure approved in Nicor Gas' 2023 general base rate case proceeding. The Illinois Supreme Court is expected to rule on the petition on September 30, 2026.
    The ultimate outcome of these matters cannot be determined at this time.
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    RESULTS OF OPERATIONS
    Southern Company
    Net Income
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $29433.4$31714.3
    Consolidated net income attributable to Southern Company was $1.2 billion ($1.03 per share) in the second quarter 2026 compared to $0.9 billion ($0.80 per share) for the corresponding period in 2025. For year-to-date 2026, consolidated net income attributable to Southern Company was $2.5 billion ($2.24 per share) compared to $2.2 billion ($2.01 per share) for the corresponding period in 2025. The increases were primarily due to increases within retail electric revenues associated with sales growth, higher natural gas revenues associated with base rate increases, decreases in income taxes, and increases in AFUDC equity and earnings from equity method investments, partially offset by increases in depreciation and amortization. Also contributing to the increase in the second quarter 2026 was a decrease in interest expense.
    Retail Electric Revenues
    In the second quarter 2026, retail electric revenues were $4.75 billion compared to $4.76 billion for the corresponding period in 2025. For year-to-date 2026, retail electric revenues were $9.39 billion compared to $9.36 billion for the corresponding period in 2025. Details of the changes in retail electric revenues were as follows:
     
    Second Quarter 2026 vs.
    Second Quarter 2025
    Year-to-Date 2026 vs.
     Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    Rates and pricing$(10)(0.2)%$(31)(0.3)%
    Sales growth77 1.6 158 1.7 
    Weather(10)(0.2)(79)(0.9)
    Fuel and other cost recovery(70)(1.5)(21)(0.2)
    Retail electric revenues$(13)(0.3)%$27 0.3 %
    Changes in rates and pricing resulted in decreases in revenues in the second quarter and year-to-date 2026 when compared to the corresponding periods in 2025 primarily due to lower contributions from commercial and industrial customers with variable demand-driven pricing at Georgia Power, partially offset by an increase in Rate CNP Compliance revenues at Alabama Power and higher revenues associated with a tolling arrangement accounted for as a sales-type lease at Mississippi Power. Also partially offsetting the decrease in revenues for year-to-date 2026 were increases in PEP rates at Mississippi Power. See Note 2 to the financial statements under "Alabama Power – Rate CNP Compliance" and "Mississippi Power – Performance Evaluation Plan" in Item 8 of the Form 10-K for additional information.
    Changes in sales resulted in increases in revenues in the second quarter and year-to-date 2026 when compared to the corresponding periods in 2025. Weather-adjusted residential KWH sales decreased 0.7% in the second quarter 2026 primarily due to decreased customer usage, partially offset by customer growth. Weather-adjusted residential KWH sales increased 0.1% for year-to-date 2026 primarily due to customer growth, partially offset by decreased customer usage. Weather-adjusted commercial KWH sales increased 7.4% and 6.0% in the second quarter and year-to-date 2026, respectively, primarily due to increased customer usage, largely driven by data centers at Georgia Power. Weather-adjusted industrial KWH sales were flat in the second quarter 2026 primarily due to increases in the primary metals and miscellaneous manufacturing sectors, offset by decreases in the paper, textiles, and chemicals sectors. Weather-adjusted industrial KWH sales increased 0.7% for year-to-date 2026 primarily due to increases in the primary metals, miscellaneous manufacturing, and stone, clay, and glass sectors.
    93
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    Fuel and other cost recovery revenues decreased $70 million and $21 million in the second quarter and year-to-date 2026, respectively, compared to the corresponding periods in 2025 primarily due to lower recoverable fuel costs. Electric rates for the traditional electric operating companies include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of PPA costs, and do not affect net income. The traditional electric operating companies each have one or more regulatory mechanisms to recover other costs such as environmental and other compliance costs, storm damage, new plants, and PPA capacity costs. See Note 2 to the financial statements in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements herein for additional information.
    Wholesale Electric Revenues
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $182.6$23916.8
    In the second quarter 2026, wholesale electric revenues were $699 million compared to $681 million for the corresponding period in 2025. The increase was primarily due to an increase in energy revenues associated with a $48 million increase related to the volume of KWHs sold resulting from higher demand, partially offset by a decrease of $27 million related to the average cost per KWH sold primarily resulting from lower fuel and purchased power prices.
    For year-to-date 2026, wholesale electric revenues were $1.66 billion compared to $1.43 billion for the corresponding period in 2025. The increase was primarily due to an increase in energy revenues associated with an increase of $123 million related to the volume of KWHs sold resulting from higher demand and $120 million related to the average cost per KWH sold primarily resulting from higher fuel and purchased power prices.
    Wholesale electric revenues consist of revenues from PPAs and short-term opportunity sales. Wholesale electric revenues from PPAs (other than solar and wind PPAs) have both capacity and energy components. Capacity revenues generally represent the greatest contribution to net income and are designed to provide recovery of fixed costs plus a return on investment. Energy revenues will vary depending on fuel prices, the market prices of wholesale energy compared to the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. Energy sales from solar and wind PPAs do not have a capacity charge and customers either purchase the energy output of a dedicated renewable facility through an energy charge or through a fixed price related to the energy. As a result, the ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, transmission constraints, and other factors. Wholesale electric revenues at Mississippi Power include FERC-regulated municipal and rural association sales under cost-based tariffs as well as market-based sales. Short-term opportunity sales are made at market-based rates that generally provide a margin above the Southern Company system's variable cost to produce the energy.
    Other Electric Revenues
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $2210.0$449.5
    In the second quarter 2026, other electric revenues were $242 million compared to $220 million for the corresponding period in 2025. For year-to-date 2026, other electric revenues were $507 million compared to $463 million for the corresponding period in 2025. The increases in the second quarter and year-to-date 2026 were
    94
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    primarily due to increases of $20 million and $37 million, respectively, in open access transmission tariff sales at the traditional electric operating companies.
    Natural Gas Revenues
    In the second quarter 2026, natural gas revenues were $966 million compared to $979 million for the corresponding period in 2025. For year-to-date 2026, natural gas revenues were $3.16 billion compared to $2.82 billion for the corresponding period in 2025. Details of the changes in natural gas revenues were as follows:
    Second Quarter 2026 vs.
    Second Quarter 2025
    Year-to-Date 2026 vs.
    Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    Rates
    		$58 5.9 %$134 4.8 %
    Gas costs and other cost recovery(64)(6.5)181 6.4 
    Gas marketing services(13)(1.3)19 0.6 
    Other6 0.6 5 0.2 
    Natural gas revenues$(13)(1.3)%$339 12.0 %
    Changes in rates resulted in increases in revenues in the second quarter and year-to-date 2026 as compared to the corresponding periods in 2025 primarily due to base rate increases at Nicor Gas and Atlanta Gas Light. See Note 2 to the financial statements under "Southern Company Gas – Rate Proceedings" in Item 8 of the Form 10-K for additional information.
    Revenues associated with gas costs and other cost recovery decreased in the second quarter 2026 as compared to the corresponding period in 2025 primarily due to lower cost of natural gas driven by lower natural gas prices, as well as decreases in other expenses passed through to customers. Revenues associated with gas costs and other cost recovery increased for year-to-date 2026 as compared to the corresponding period in 2025 primarily due to higher cost of natural gas driven by higher natural gas prices in the first quarter 2026, as well as increases in other expenses passed through to customers. See "Cost of Natural Gas" herein for additional information.
    Revenues from gas marketing services decreased in the second quarter 2026 as compared to the corresponding period in 2025 primarily due to lower commodity prices. Revenues from gas marketing services increased for year-to-date 2026 as compared to the corresponding period in 2025 primarily due to higher commodity prices in the first quarter 2026, partially offset by weather impacts.
    Other Revenues
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $(10)(3.0)$(23)(3.4)
    In the second quarter 2026, other revenues were $325 million compared to $335 million for the corresponding period in 2025. The decrease was primarily due to decreases of $12 million in unregulated sales associated with energy conservation projects at Georgia Power and $8 million in sales of unregulated products and services at Alabama Power, partially offset by an increase of $10 million in unregulated sales associated with power delivery construction and maintenance projects at Georgia Power.
    For year-to-date 2026, other revenues were $661 million compared to $684 million for the corresponding period in 2025. The decrease was primarily due to decreases of $30 million in unregulated sales associated with energy conservation projects at Georgia Power, $15 million in sales of unregulated products and services at Alabama Power, and $8 million in customer charges related to contributions in aid of construction included in rates in 2025 at Mississippi Power, partially offset by an increase of $24 million in unregulated sales associated with power delivery construction and maintenance projects at Georgia Power.
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    Fuel and Purchased Power Expenses
     
    Second Quarter 2026 vs.
    Second Quarter 2025
    Year-to-Date 2026 vs.
    Year-to-Date 2025
     (change in millions)(% change)(change in millions)(% change)
    Fuel$(62)(5.6)%$136 5.6 %
    Purchased power28 10.8 22 4.3 
    Total fuel and purchased power expenses$(34)$158 
    In the second quarter 2026, total fuel and purchased power expenses were $1.34 billion compared to $1.38 billion for the corresponding period in 2025. The decrease was due to a $103 million net decrease related to the average cost of fuel and purchased power, partially offset by a $69 million increase related to the volume of KWHs generated and purchased.
    For year-to-date 2026, total fuel and purchased power expenses were $3.1 billion compared to $2.9 billion for the corresponding period in 2025. The increase was due to a $101 million net increase related to the volume of KWHs generated and purchased and a $57 million increase related to the average cost of fuel and purchased power.
    Fuel and purchased power energy transactions at the traditional electric operating companies are generally offset by fuel revenues and do not have a significant impact on net income. See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information. Fuel expenses incurred under Southern Power's PPAs are generally the responsibility of the counterparties and do not significantly impact net income.
    Energy purchases will vary depending on demand for energy within the Southern Company system's electric service territory, the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, and the availability of the Southern Company system's generation.
    Details of the Southern Company system's generation and purchased power and the related costs were as follows:
    Second Quarter 2026Second Quarter 2025Year-to-Date 2026Year-to-Date 2025
    Total generation (in billions of KWHs)
    		48459591
    Total purchased power (in billions of KWHs)
    		661011
    Sources of generation (percent) —
    Gas51505150
    Nuclear
    		21182019
    Coal18191919
    Hydro2424
    Wind, Solar, and Other8988
    Cost of fuel, generated (in cents per net KWH)—
    Gas
    		2.863.233.773.56
    Nuclear
    		0.790.880.790.86
    Coal3.413.773.493.90
    Average cost of fuel, generated (in cents per net KWH)
    		2.482.863.023.04
    Average cost of purchased power (in cents per net KWH)(*)
    		5.124.735.535.07
    (*)Average cost of purchased power includes fuel purchased by the Southern Company system for tolling agreements where power is generated by the provider.
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    Cost of Natural Gas
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $(78)(30.6)$17418.7
    Excluding Atlanta Gas Light, which does not sell natural gas to end-use customers, the natural gas distribution utilities' rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas and do not affect net income from the natural gas distribution utilities. See Note 2 to the financial statements under "Southern Company Gas – Natural Gas Cost Recovery" in Item 8 of the Form 10-K for additional information. Cost of natural gas at the natural gas distribution utilities represented 87.0% and 84.7% of the total cost of natural gas in the second quarter and year-to-date 2026, respectively.
    In the second quarter 2026, cost of natural gas was $177 million compared to $255 million for the corresponding period in 2025. The decrease reflects lower gas cost recovery as a result of a 15.8% decrease in natural gas prices.
    For year-to-date 2026, cost of natural gas was $1.1 billion compared to $0.9 billion for the corresponding period in 2025. The increase reflects higher gas cost recovery, primarily in the first quarter 2026, as a result of an 11.9% increase in natural gas prices.
    Cost of Other Sales
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $95.4$(9)(2.5)
    In the second quarter 2026, cost of other sales was $176 million compared to $167 million for the corresponding period in 2025. The increase was primarily due to increases of $12 million in expenses associated with unregulated power delivery construction and maintenance projects at Georgia Power and $5 million related to energy service contracts at Southern Company Gas, partially offset by a decrease of $10 million in expenses related to sales of unregulated products and services at Alabama Power.
    For year-to-date 2026, cost of other sales was $357 million compared to $366 million for the corresponding period in 2025. The decrease was primarily related to a decrease of $25 million in expenses at PowerSecure primarily related to distributed infrastructure and energy efficiency projects and $15 million in expenses related to sales of unregulated products and services at Alabama Power, partially offset by increases of $23 million in expenses associated with unregulated power delivery construction and maintenance projects at Georgia Power and $4 million related to energy service contracts at Southern Company Gas.
    Other Operations and Maintenance Expenses
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $201.2$541.6
    In the second quarter 2026, other operations and maintenance expenses were $1.71 billion compared to $1.69 billion for the corresponding period in 2025. The increase was primarily due to a $22 million increase in certain employee compensation and benefit expenses and increases of $13 million in storm damage recovery and $13 million in transmission and distribution operational costs, both at Georgia Power, partially offset by decreases of $19 million associated with utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses at Alabama Power and $16 million in technology infrastructure and application production costs.
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    For year-to-date 2026, other operations and maintenance expenses were $3.4 billion compared to $3.3 billion for the corresponding period in 2025. The increase was primarily due to a $47 million increase in certain employee compensation and benefit expenses, a $37 million increase in expenses at Southern Company Gas related to certain deferred expenses, charges related to the disallowance of certain capital investments at Nicor Gas, gas mains, and expenses passed through to customers, a $23 million increase in transmission and distribution operational costs at the traditional electric operating companies, $22 million in weather-related damage at a Southern Power solar project, and increases of $22 million in customer education and assistance expenses at Georgia Power and $18 million in NDR accruals and storm damage recovery at Alabama Power and Georgia Power. Partially offsetting the increase were decreases of $40 million associated with utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses at Alabama Power and $30 million in planned outages at the traditional electric operating companies, $23 million of deferred costs related to the Jurisdictional Separation Study Order at Alabama Power, $21 million associated with higher nuclear property insurance refunds at Alabama Power and Georgia Power, and a decrease of $20 million in legal expenses at Southern Company Gas.
    See Note (B) to the Condensed Financial Statements under "Mississippi Power – Reliability Reserve Accounting Order" and "Alabama Power – Reliability Reserve Accounting Order" herein for additional information. Also see Notes 2 and 15 to the financial statements under "Alabama Power – Jurisdictional Separation Study Order" and "Alabama Power," respectively, in Item 8 of the Form 10-K for additional information.
    Depreciation and Amortization
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $1118.4$2469.4
    In the second quarter 2026, depreciation and amortization was $1.4 billion compared to $1.3 billion for the corresponding period in 2025. For year-to-date 2026, depreciation and amortization was $2.85 billion compared to $2.61 billion for the corresponding period in 2025. The increases in the second quarter and year-to-date 2026 were primarily due to increases of $98 million and $224 million, respectively, in accelerated depreciation related to wind repowering projects at Southern Power and $102 million and $207 million, respectively, associated with additional plant in service, partially offset by a decrease of $99 million and $197 million, respectively, resulting from the extension of Georgia Power's 2022 ARP.
    See Note 2 to the financial statements under "Georgia Power – Rate Plans" for additional information related to Georgia Power's 2022 ARP. Also see Note (K) to the Condensed Financial Statements under "Southern Power – Wind Repowering Projects" herein and Notes 5 and 15 to the financial statements under "Depreciation and Amortization – Southern Power" and "Southern Power – Wind Repowering Projects," respectively, in Item 8 of the Form 10-K for additional information regarding Southern Power's wind repowering projects.
    Taxes Other Than Income Taxes
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $(36)(8.9)$(17)(2.0)
    In the second quarter 2026, taxes other than income taxes were $367 million compared to $403 million for the corresponding period in 2025. For year-to-date 2026, taxes other than income taxes were $831 million compared to $848 million for the corresponding period in 2025. The decreases in the second quarter and year-to-date 2026 were primarily due to decreases of $37 million and $30 million, respectively, in property taxes primarily resulting from the actualization of prior-year tax assessments at Georgia Power. Partially offsetting the decrease for year-to-date 2026 were increases of $7 million in municipal franchise fees and utility license taxes at the traditional electric operating companies and $5 million in revenue taxes as a result of higher natural gas revenues at Nicor Gas.
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    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    Allowance for Equity Funds Used During Construction
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $4860.0$9562.1
    In the second quarter 2026, allowance for equity funds used during construction was $128 million compared to $80 million for the corresponding period in 2025. For year-to-date 2026, allowance for equity funds used during construction was $248 million compared to $153 million for the corresponding period in 2025. The increases were primarily associated with an increase in capital expenditures subject to AFUDC at Georgia Power.
    Earnings from Equity Method Investments
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $76N/M$93N/M
    In the second quarter 2026, earnings from equity method investments were $86 million compared to $10 million for the corresponding period in 2025. For year-to-date 2026, earnings from equity method investments were $136 million compared to $43 million for the corresponding period in 2025. The increases in the second quarter and year-to-date 2026 were primarily due to increases of $58 million and $68 million, respectively, at Southern Holdings related to gains and losses associated with investments in energy-related venture capital funds and increases of $9 million and $16 million, respectively, at Southern Company Gas related to SNG. See Note 7 to the financial statements in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under "Southern Company" and "Southern Company Gas" herein for additional information.
    Interest Expense, Net of Amounts Capitalized
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $(78)(8.9)$(15)(0.9)
    In the second quarter 2026, interest expense, net of amounts capitalized was $796 million compared to $874 million for the corresponding period in 2025. For year-to-date 2026, interest expense, net of amounts capitalized was $1.57 billion compared to $1.59 billion for the corresponding period in 2025. The decreases in the second quarter and year-to-date 2026 were primarily due to decreases of $129 million and $118 million, respectively, in losses associated with the extinguishment of debt at the parent company and increases of $17 million and $39 million, respectively, in capitalized interest and AFUDC debt primarily associated with increased capital expenditures, partially offset by increases of $65 million and $121 million, respectively, related to higher average outstanding borrowings, $11 million and $14 million, respectively, related to higher interest rates, and $7 million and $14 million, respectively, in interest associated with PPAs accounted for as finance leases at Georgia Power.
    See FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" and "Financing Activities" herein for additional information.
    Other Income (Expense), Net
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $1911.7$268.4
    In the second quarter 2026, other income (expense), net was $181 million compared to $162 million for the corresponding period in 2025. For year-to-date 2026, other income (expense), net was $336 million compared to
    99
        Table of Contents                                Index to Financial Statements

    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS (Continued)
    $310 million for the corresponding period in 2025. The increases in the second quarter and year-to-date 2026 were primarily due to an increase in customer charges related to contributions in aid of construction at Alabama Power.
    Income Taxes
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $(102)(35.3)$(155)(27.2)
    In the second quarter 2026, income taxes were $187 million compared to $289 million for the corresponding period in 2025. For year-to-date 2026, income taxes were $414 million compared to $569 million for the corresponding period in 2025. The decreases were primarily due to decreases of $93 million and $87 million, respectively, in charges to a valuation allowance on certain state tax credit carryforwards at Georgia Power and increases of $35 million and $71 million, respectively, related to higher wind PTCs resulting from the purchase of the noncontrolling membership interest in the SP Wind tax equity partnership at Southern Power, partially offset by higher pre-tax earnings and decreases of $17 million and $29 million, respectively, in the flowback of excess state deferred income taxes at Georgia Power. See Note (G) to the Condensed Financial Statements herein and Note 15 to the financial statements under "Southern Power – Purchase of Renewable Facility Interests" in Item 8 of the Form 10-K for additional information.
    Net Income (Loss) Attributable to Noncontrolling Interests
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025
    (change in millions)(% change)(change in millions)(% change)
    $41N/M$8795.6
    Substantially all noncontrolling interests relate to renewable projects at Southern Power. In the second quarter 2026, net income attributable to noncontrolling interests was $14 million compared to a $27 million net loss for the corresponding period in 2025. For year-to-date 2026, net loss attributable to noncontrolling interests was $4 million compared to $91 million for the corresponding period in 2025. The changes in the second quarter and year-to-date 2026 were primarily due to $38 million and $79 million, respectively, in lower HLBV loss allocations to Southern Power's tax equity partners, largely resulting from Southern Power's purchase of the noncontrolling membership interests in the SP Wind tax equity partnership. See Note 15 to the financial statements under "Southern Power – Purchase of Renewable Facility Interests" in Item 8 of the Form 10-K for additional information.
    Alabama Power
    Net Income
    Second Quarter 2026 vs. Second Quarter 2025Year-to-Date 2026 vs. Year-to-Date 2025

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    Held by

    holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

    Holder Type ETF MF Position ($) % of holder Δ % of holder Holder AUM

    Recent insider activity

    Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 3 transactions across 1 insider. Net: -300 shares, -$28,350.

    Date Insider Role Action Shares Price Value
    2026-07-01 Kim Matthew M. Comptroller Sell -100 $95.77 -$9,577
    2026-06-01 Kim Matthew M. Comptroller Sell -100 $91.16 -$9,116
    2026-05-01 Kim Matthew M. Comptroller Sell -100 $96.57 -$9,657

    Source: SEC Form 4 filings.

    Next expected filings

    • ~2026-10-29 10-Q expected by 2026-11-07 (in 91 days)
    • ~2027-02-18 10-K expected by 2027-02-27 (in 203 days)
    • ~2027-04-29 10-Q expected by 2027-05-08 (in 273 days)
    • ~2027-07-29 10-Q expected by 2027-08-07 (in 364 days)

    Predicted from historical filing cadence; not an SEC commitment.

    Recent SEC filings

    • 2026-07-30 10-Q Quarterly Report
    • 2026-06-08 8-K Other Events; Financial Statements and Exhibits
    • 2026-06-08 424B2 Prospectus Supplement
    • 2026-06-05 S-3ASR S-3ASR
    • 2026-04-30 10-Q Quarterly Report
    • 2026-04-30 8-K Earnings Release
    • 2026-03-19 8-K Other Events; Financial Statements and Exhibits
    • 2026-02-19 10-K Annual Report
    • 2026-02-17 8-K/A Officer/Director Change
    • 2025-11-06 8-K Other Events; Financial Statements and Exhibits
    • 2025-10-30 10-Q Quarterly Report
    • 2025-07-31 10-Q Quarterly Report
    • 2025-07-23 8-K Officer/Director Change
    • 2025-07-18 8-K/A Officer/Director Change
    • 2025-07-11 8-K Officer/Director Change