Southern Company (SOJE) — Agentic Tribune

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Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals.

From 10-Q filed 2026-04-30 (period ending 2026-03-31).

Table of Contents Index to Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

			Page
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview			84
Results of Operations			85
Southern Company			85
Alabama Power			91
Georgia Power			94
Mississippi Power			97
Southern Power			100
Southern Company Gas			104
Future Earnings Potential			108
Accounting Policies			112
Financial Condition and Liquidity			112

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.

Table of Contents Index to Financial Statements

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.

Southern Power

During the three months ended March 31, 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 first quarter 2031. The ultimate outcome of these matters cannot be determined at this time. In addition, in the first quarter 2026 and subsequent to March 31, 2026, Southern Power placed in service 51 MWs of the 200-MW repowering project at the Kay wind facility. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.

At March 31, 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.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

RESULTS OF OPERATIONS

Southern Company

Net Income

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$22	1.6

Consolidated net income attributable to Southern Company in the first quarter 2026 was $1.36 billion ($1.21 per share) compared to $1.33 billion ($1.21 per share) for the corresponding period in 2025. The increase was primarily due to increases in retail electric revenues associated with sales growth, higher natural gas revenues associated with base rate increases, higher non-fuel-related wholesale electric revenues, and an increase in AFUDC equity, partially offset by an increase in depreciation and amortization, decreases in retail electrics revenues associated with weather impacts, and an increase in interest expense.

Retail Electric Revenues

In the first quarter 2026, retail electric revenues were $4.64 billion compared to $4.60 billion for the corresponding period in 2025. Details of the changes in retail electric revenues were as follows:

	First Quarter 2026 vs. First Quarter 2025
		(change in millions)		(% change)
Rates and pricing		$	(21)	(0.5)	%
Sales growth		81		1.8
Weather		(69)		(1.5)
Fuel and other cost recovery		48		1.0
Retail electric revenues		$	39	0.8	%

Changes in rates and pricing resulted in a decrease in revenues in the first quarter 2026 when compared to the corresponding period in 2025 primarily due to lower contributions from commercial and industrial customers with variable demand-driven pricing at Georgia Power, partially offset by increases in PEP rates at Mississippi Power. See Note 2 to the financial statements under "Mississippi Power – Performance Evaluation Plan" in Item 8 of the Form 10-K for additional information.

Changes in sales resulted in an increase in revenues in the first quarter 2026 when compared to the corresponding period in 2025. Weather-adjusted residential KWH sales increased 0.9% in the first quarter 2026 primarily due to customer growth. Weather-adjusted commercial KWH sales increased 4.6% in the first quarter 2026 primarily due to increased customer usage, largely driven by data centers at Georgia Power. Industrial KWH sales increased 1.5% in the first quarter 2026 primarily due to increases in the primary metals, pipeline, and stone, clay, and glass sectors, partially offset by decreases in the paper and chemicals sectors.

Fuel and other cost recovery revenues increased $48 million in the first quarter 2026 compared to the corresponding period in 2025 primarily due to higher 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.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Wholesale Electric Revenues

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$221	29.7

In the first quarter 2026, wholesale electric revenues were $965 million compared to $744 million for the corresponding period in 2025. The increase was primarily due to an increase in energy revenues associated with a $145 million increase related to the average cost per KWH sold primarily resulting from higher fuel and purchased power prices and a $76 million increase related to the volume of KWHs sold resulting from higher demand.

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

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$23	9.5

In the first quarter 2026, other electric revenues were $265 million compared to $242 million for the corresponding period in 2025. The increase was primarily due to increases of $15 million in open access transmission tariff sales at the traditional electric operating companies and $8 million in realized gains associated with price stability products for retail customers on variable demand-driven pricing tariffs at Georgia Power.

Natural Gas Revenues

In the first quarter 2026, natural gas revenues were $2.2 billion compared to $1.8 billion for the corresponding period in 2025. Details of the changes in natural gas revenues were as follows:

	First Quarter 2026 vs. First Quarter 2025
		(change in millions)		(% change)
Rates		$	76	4.1	%
Gas costs and other cost recovery		245		13.3
Gas marketing services		32		1.8
Other		(1)		(0.1)
Natural gas revenues		$	352	19.1	%

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Changes in rates resulted in an increase in revenues in the first quarter 2026 compared to the corresponding period 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 increased in the first quarter 2026 compared to the corresponding period in 2025 primarily due to higher cost of natural gas driven by higher natural gas prices, as well as increases in other expenses passed through to customers. See "Cost of Natural Gas" herein for additional information. Natural gas distribution 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.

Revenues from gas marketing services increased in the first quarter 2026 compared to the corresponding period in 2025 primarily due to higher commodity prices, partially offset by weather impacts.

Other Revenues

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$(13)	(3.7)

In the first quarter 2026, other revenues were $336 million compared to $349 million for the corresponding period in 2025. The decrease was primarily due to a decrease of $18 million in unregulated sales associated with energy conservation projects at Georgia Power and $7 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 $13 million in unregulated sales associated with power delivery construction and maintenance projects at Georgia Power.

Fuel and Purchased Power Expenses

	First Quarter 2026 vs. First Quarter 2025
		(change in millions)		(% change)
Fuel		$	199	15.4	%
Purchased power		(6)		(2.4)
Total fuel and purchased power expenses		$	193

In the first quarter 2026, total fuel and purchased power expenses were $1.7 billion compared to $1.5 billion for the corresponding period in 2025. The increase was due to a $99 million increase related to the average cost of fuel and purchased power and a $94 million net increase related to the volume of KWHs generated and purchased.

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.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Details of the Southern Company system's generation and purchased power and the related costs were as follows:

	First Quarter 2026	First Quarter 2025
Total generation (in billions of KWHs)	47	46
Total purchased power (in billions of KWHs)	4	5
Sources of generation (percent) —
Gas	50	50
Coal	20	19
Nuclear	20	20
Hydro	2	3
Wind, Solar, and Other	8	8
Cost of fuel, generated (in cents per net KWH)—
Gas	4.71	4.17
Coal	3.56	4.02
Nuclear	0.79	0.84
Average cost of fuel, generated (in cents per net KWH)	3.56	3.35
Average cost of purchased power (in cents per net KWH)(*)	6.09	5.50

(*)Average cost of purchased power includes fuel purchased by the Southern Company system for tolling agreements where power is generated by the provider.

Cost of Natural Gas

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$252	37.4

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 84.2% of the total cost of natural gas in the first quarter 2026.

In the first quarter 2026, cost of natural gas was $926 million compared to $674 million for the corresponding period in 2025. The increase reflects higher gas cost recovery as a result of a 38.0% increase in natural gas prices.

Cost of Other Sales

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$(18)	(9.0)

In the first quarter 2026, cost of other sales was $181 million compared to $199 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, partially offset by an increase of $11 million in expenses associated with unregulated power delivery construction and maintenance projects at Georgia Power.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Other Operations and Maintenance Expenses

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$34	2.1

In the first quarter 2026, other operations and maintenance expenses were $1.65 billion compared to $1.62 billion for the corresponding period in 2025. The increase was primarily due to a $24 million increase in certain employee compensation and benefit expenses, $20 million in weather-related damage at a Southern Power solar project, and increases of $15 million in transmission and distribution expenses at the traditional electric operating companies, $14 million in customer education and assistance expenses at Georgia Power, $13 million in technology infrastructure and application production costs, $10 million in expenses at PowerSecure primarily related to distributed infrastructure projects, and $7 million related to certain deferred expenses at Southern Company Gas. Partially offsetting the increase was a $21 million decrease associated with utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses at Alabama Power, a $21 million increase in nuclear property insurance refunds at Alabama Power and Georgia Power, an $18 million decrease in planned outages at the traditional electric operating companies, and an $18 million decrease in legal expenses at Southern Company Gas.

Depreciation and Amortization

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$134	10.4

In the first quarter 2026, depreciation and amortization was $1.4 billion compared to $1.3 billion for the corresponding period in 2025. The increase was primarily due to increases of $127 million in accelerated depreciation related to wind repowering projects at Southern Power and $102 million associated with additional plant in service, partially offset by a decrease of $98 million 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

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$19	4.3

In the first quarter 2026, taxes other than income taxes were $464 million compared to $445 million for the corresponding period in 2025. The increase was primarily due to increases of $7 million in property taxes primarily related to an increase in the assessed value of property and $6 million in revenue taxes at Nicor Gas as a result of higher natural gas revenues.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Allowance for Equity Funds Used During Construction

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$48	65.8

In the first quarter 2026, allowance for equity funds used during construction was $121 million compared to $73 million for the corresponding period in 2025. The increase was primarily associated with an increase in capital expenditures subject to AFUDC at Georgia Power.

Earnings from Equity Method Investments

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$18	56.3

In the first quarter 2026, earnings from equity method investments were $50 million compared to $32 million for the corresponding period in 2025. The increase was primarily due to an increase of $10 million at Southern Holdings related to investment gains and losses and a $7 million increase 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

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$64	9.0

In the first quarter 2026, interest expense, net of amounts capitalized was $778 million compared to $714 million for the corresponding period in 2025. The increase primarily reflects approximately $56 million related to higher average outstanding borrowings, an $11 million loss associated with the extinguishment of debt at the parent company, and a $7 million increase in interest associated with PPAs accounted for as finance leases at Georgia Power, partially offset by an increase of $23 million in capitalized interest and AFUDC debt associated with increased capital expenditures. See FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" and "Financing Activities" herein for additional information.

Income Taxes

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$(52)	(18.6)

In the first quarter 2026, income taxes were $228 million compared to $280 million for the corresponding period in 2025. The decrease was primarily due to an increase of $35 million related to higher wind PTCs resulting from the purchase of the noncontrolling membership interest in the SP Wind tax equity partnership at Southern Power and an increase of $16 million in amortization of federal PTCs 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.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Net Loss Attributable to Noncontrolling Interests

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$46	71.9

Substantially all noncontrolling interests relate to renewable projects at Southern Power. In the first quarter 2026, net loss attributable to noncontrolling interests was $18 million compared to $64 million for the corresponding period in 2025. The decrease was primarily due to $41 million in lower HLBV loss allocations to Southern Power's tax equity partners, primarily resulting from Southern Power's purchase of the noncontrolling membership interests in the SP Wind tax equity partnership, and $5 million in higher income allocations to Southern Power's equity partners. 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

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$50	13.3

Alabama Power's net income in the first quarter 2026 was $425 million compared to $375 million for the corresponding period in 2025. The increase was primarily due to a decrease in other operations and maintenance expenses and an increase in retail revenues associated with sales growth, partially offset by weather impacts.

Retail Revenues

In the first quarter 2026, retail revenues were $1.73 billion compared to $1.72 billion for the corresponding period in 2025. Details of the changes in retail revenues were as follows:

	First Quarter 2026 vs. First Quarter 2025
		(change in millions)		(% change)
Rates and pricing		$	3	0.2	%
Sales growth		34		2.0
Weather		(39)		(2.3)
Fuel and other cost recovery		7		0.4
Retail revenues		$	5	0.3	%

Changes in rates and pricing resulted in an increase in revenues in the first quarter 2026 as compared to the corresponding period in 2025 primarily due to an increase in Rate CNP Compliance revenues.

Changes in sales resulted in an increase in revenues in the first quarter 2026 as compared to the corresponding period in 2025. Weather-adjusted residential KWH sales increased 2.2% primarily due to increased customer usage and customer growth. Weather-adjusted commercial KWH sales increased 0.3% primarily due to customer growth. Industrial KWH sales increased 4.0% primarily due to an increase in the primary metals sector.

Fuel and other cost recovery revenues increased in the first quarter 2026 as compared to the corresponding period in 2025 primarily as a result of higher recoverable fuel costs. Electric rates include provisions to recognize the recovery of fuel costs, purchased power costs, PPAs certificated by the Alabama PSC, and costs associated with the NDR. Under these provisions, fuel and other cost recovery revenues generally equal fuel and other cost recovery expenses and do not affect net income. See Note 2 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Wholesale Revenues – Non-Affiliates

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$26	28.6

In the first quarter 2026, wholesale revenues from sales to non-affiliates were $117 million compared to $91 million for the corresponding period in 2025. The increase consisted of a $36 million increase in energy revenues due to increases of $31 million related to the average cost per KWH sold due to higher Southern Company system fuel and purchased power prices and $5 million related to the volume of KWH sales associated with higher market demand, partially offset by a $10 million decrease in non-fuel revenues from wholesale capacity contracts. The decrease in capacity revenues was primarily due to the expiration of a power sales agreement in December 2025, partially offset by the commencement of a new power sales agreement in October 2025 associated with the acquisition of the Lindsay Hill Generating Station. See Note 15 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.

Wholesale Revenues – Affiliates

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$50	72.5

In the first quarter 2026, wholesale revenues from sales to affiliates were $119 million compared to $69 million for the corresponding period in 2025. The increase was primarily due to increases of 35.9% in the volume of KWH sales due to affiliated company energy needs and 26.3% in the price of energy due to an increase in natural gas prices.

Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. Energy revenues related to these transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost and energy purchases are generally offset by energy revenues through Alabama Power's energy cost recovery clause.

Fuel and Purchased Power Expenses

	First Quarter 2026 vs. First Quarter 2025
		(change in millions)		(% change)
Fuel		$	42	10.9	%
Purchased power – non-affiliates		4		5.8
Purchased power – affiliates		18		32.7
Total fuel and purchased power expenses		$	64

In the first quarter 2026, total fuel and purchased power expenses were $574 million compared to $510 million for the corresponding period in 2025. The increase was due to a $53 million increase related to the average cost of fuel and purchased power and an $11 million net increase related to the volume of KWHs generated and purchased.

Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Alabama Power's energy cost recovery clause. See Note 2 to the financial statements under "Alabama Power – Rate ECR" in Item 8 of the Form 10-K for additional information.

Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of 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.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.

Details of Alabama Power's generation and purchased power and the related costs were as follows:

	First Quarter 2026	First Quarter 2025
Total generation (in billions of KWHs)	16	15
Total purchased power (in billions of KWHs)	2	2
Sources of generation (percent) —
Coal	35	35
Gas	33	33
Nuclear	26	24
Hydro	6	8
Cost of fuel, generated (in cents per net KWH) —
Coal	3.37	3.43
Gas	3.99	3.58
Nuclear	0.72	0.70
Average cost of fuel, generated (in cents per net KWH)	2.87	2.76
Average cost of purchased power (in cents per net KWH)(*)	9.65	7.52

(*)Average cost of purchased power includes fuel, energy, and transmission purchased by Alabama Power for tolling agreements where power is generated by the provider.

Other Operations and Maintenance Expenses

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$(70)	(15.1)

In the first quarter 2026, other operations and maintenance expenses were $393 million compared to $463 million for the corresponding period in 2025. The decrease was primarily due to decreases of $28 million in planned outages, $21 million associated with utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses, and $11 million associated with higher nuclear property insurance refunds and $10 million of deferred costs related to the Jurisdictional Separation Study Order. See Note (B) to the Condensed Financial Statements under "Alabama Power – Reliability Reserve Accounting Order" herein and Note 2 to the financial statements under "Alabama Power – Jurisdictional Separation Study Order" in Item 8 of the Form 10-K for additional information.

Income Taxes

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$18	16.2

In the first quarter 2026, income taxes were $129 million compared to $111 million for the corresponding period in 2025. The increase was primarily due to higher pre-tax earnings.

Table of Contents Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS (Continued)

Georgia Power

Net Income

First Quarter 2026 vs. First Quarter 2025
	(change in millions)	(% change)
	$32	5.4

Georgia Power's net income in the first quarter 2026 was $628 million compared to $596 million for the corresponding period in 2025. The increase was primarily due to an increase in AFUDC equity and higher non-fuel-related wholesale revenues, partially offset by an increase in other operations and maintenance expenses.

Retail Revenues

In the first quarter 2026, retail revenues were $2.64 billion compared to $2.63 billion for the corresponding period in 2025. Details of the changes in retail revenues were as follows:

First Quarter 2026 vs.

First Quarter 2025

(change in millions)

(% change)

Rates and pricing

(43)

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Next expected filings

~2026-07-30 10-Q expected by 2026-08-08 (in 90 days)
~2026-10-29 10-Q expected by 2026-11-07 (in 181 days)
~2027-02-18 10-K expected by 2027-02-27 (in 293 days)
~2027-04-29 10-Q expected by 2027-05-08 (in 363 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

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
2025-05-27 8-K Material Financial Obligation; Unregistered Equity Sale; Financial Statements and Exhibits
2025-05-27 8-K/A Officer/Director Change
2025-05-21 8-K Other Events; Financial Statements and Exhibits
2025-05-20 8-K Other Events; Financial Statements and Exhibits

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