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The Southern Company and Subsidiary Companies:
Condensed Consolidated Statements of Income 10
Condensed Consolidated Statements of Comprehensive Income 11
Condensed Consolidated Statements of Cash Flows 12
Condensed Consolidated Balance Sheets 13
Condensed Consolidated Statements of Stockholders' Equity 15
Alabama Power Company:
Condensed Statements of Income 16
Condensed Statements of Comprehensive Income 16
Condensed Statements of Cash Flows 17
Condensed Balance Sheets 18
Condensed Statements of Common Stockholder's Equity 20
Georgia Power Company:
Condensed Statements of Income 21
Condensed Statements of Comprehensive Income 21
Condensed Statements of Cash Flows 22
Condensed Balance Sheets 23
Condensed Statements of Common Stockholder's Equity 25
Mississippi Power Company:
Condensed Statements of Income and Comprehensive Income 26
Condensed Statements of Cash Flows 27
Condensed Balance Sheets 28
Condensed Statements of Common Stockholder's Equity 30
Southern Power Company and Subsidiary Companies:
Condensed Consolidated Statements of Income (Loss) 31
Condensed Consolidated Statements of Comprehensive Income (Loss) 31
Condensed Consolidated Statements of Cash Flows 32
Condensed Consolidated Balance Sheets 33
Condensed Consolidated Statements of Stockholders' Equity 35
Southern Company Gas and Subsidiary Companies:
Condensed Consolidated Statements of Income 36
Condensed Consolidated Statements of Comprehensive Income 36
Condensed Consolidated Statements of Cash Flows 37
Condensed Consolidated Balance Sheets 38
Condensed Consolidated Statements of Stockholder's Equity 40
Combined Notes to the Condensed Financial Statements 41
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Table of Contents Index to Financial Statements
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Operating Revenues:
Retail electric revenues $ 4,745 $ 4,758 $ 9,385 $ 9,358
Wholesale electric revenues 699 681 1,664 1,425
Other electric revenues 242 220 507 463
Natural gas revenues (includes alternative revenue programs of $4, $(9), $2, and $(28), respectively) 966 979 3,157 2,818
Other revenues 325 335 661 684
Total operating revenues 6,977 6,973 15,374 14,748
Operating Expenses:
Fuel 1,054 1,116 2,544 2,408
Purchased power 288 260 532 510
Cost of natural gas 177 255 1,103 929
Cost of other sales 176 167 357 366
Other operations and maintenance 1,705 1,685 3,359 3,305
Depreciation and amortization 1,434 1,323 2,854 2,608
Taxes other than income taxes 367 403 831 848
Total operating expenses 5,201 5,209 11,580 10,974
Operating Income 1,776 1,764 3,794 3,774
Other Income and (Expense):
Allowance for equity funds used during construction 128 80 248 153
Earnings from equity method investments 86 10 136 43
Interest expense, net of amounts capitalized (796) (874) (1,573) (1,588)
Other income (expense), net 181 162 336 310
Total other income and (expense) (401) (622) (853) (1,082)
Earnings Before Income Taxes 1,375 1,142 2,941 2,692
Income taxes 187 289 414 569
Consolidated Net Income 1,188 853 2,527 2,123
Net income (loss) attributable to noncontrolling interests 14 (27) (4) (91)
Consolidated Net Income Attributable to Southern Company $ 1,174 $ 880 $ 2,531 $ 2,214
Common Stock Data:
Earnings per share -
Basic $ 1.03 $ 0.80 $ 2.24 $ 2.01
Diluted $ 1.03 $ 0.79 $ 2.23 $ 2.00
Average number of shares of common stock outstanding (in millions)
Basic 1,137 1,101 1,130 1,100
Diluted 1,141 1,108 1,134 1,107
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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Table of Contents Index to Financial Statements
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Consolidated Net Income $ 1,188 $ 853 $ 2,527 $ 2,123
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of $(4), $11, $(4), and $16, respectively (13) 35 (16) 49
Reclassification adjustment for amounts included in net income, net of tax of $3, $(10), $4, and $(14), respectively 7 (31) 11 (43)
Pension and other postretirement benefit plans:
Benefit plan net gain (loss), net of tax of $—, $—, $—, and $—, respectively — — 1 1
Reclassification adjustment for amounts included in net income, net of tax of $—, $—, $—, and $—, respectively 1 — 1 —
Total other comprehensive income (loss) (5) 4 (3) 7
Comprehensive Income 1,183 857 2,524 2,130
Comprehensive income (loss) attributable to noncontrolling interests 14 (27) (4) (91)
Consolidated Comprehensive Income Attributable to Southern Company $ 1,169 $ 884 $ 2,528 $ 2,221
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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Table of Contents Index to Financial Statements
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
2026 2025
(in millions)
Operating Activities:
Consolidated net income $ 2,527 $ 2,123
Adjustments to reconcile consolidated net income to net cash provided from operating activities —
Depreciation and amortization, total 3,176 2,860
Deferred income taxes 310 453
Allowance for equity funds used during construction (248) (153)
Pension, postretirement, and other employee benefits (277) (253)
Settlement of asset retirement obligations (283) (285)
Stock based compensation expense 112 102
Storm damage cost recovery – long-term (139) (238)
Other, net (87) 76
Changes in certain current assets and liabilities —
-Receivables 116 (130)
-Retail fuel cost under recovery 188 158
-Prepayments (96) (109)
-Materials and supplies (178) 35
-Natural gas for sale, net of temporary LIFO liquidation 197 233
-Other current assets (60) 61
-Accounts payable (403) (695)
-Accrued taxes (221) (245)
-Accrued compensation (459) (421)
-Other current liabilities 105 (141)
Net cash provided from operating activities 4,280 3,431
Investing Activities:
Property additions (6,639) (5,456)
Contributions in aid of construction 313 219
Nuclear decommissioning trust fund purchases (994) (777)
Nuclear decommissioning trust fund sales 994 777
Cost of removal, net of salvage (349) (304)
Other investing activities (83) (193)
Net cash used for investing activities (6,758) (5,734)
Financing Activities:
Increase (decrease) in notes payable, net 1,415 (150)
Proceeds —
Long-term debt 4,790 6,319
Short-term borrowings 350 200
Common stock 2,596 62
Redemptions and repurchases —
Long-term debt (3,085) (2,254)
Short-term borrowings (350) —
Distributions to noncontrolling interests (76) (66)
Payment of common stock dividends (1,579) (1,494)
Other financing activities (233) (150)
Net cash provided from financing activities 3,828 2,467
Net Change in Cash, Cash Equivalents, and Restricted Cash 1,350 164
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 1,640 1,101
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 2,990 $ 1,265
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $100 and $61 capitalized for 2026 and 2025, respectively) $ 1,472 $ 1,287
Income taxes, net (excludes credit transfers) 146 199
Noncash transactions —
Accrued property additions at end of period 1,409 1,091
Right-of-use assets obtained under operating leases 107 114
Right-of-use assets obtained under finance leases 5 14
Issuance of common stock under dividend reinvestment plan 109 112
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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Table of Contents Index to Financial Statements
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Assets At June 30, 2026 At December 31, 2025
(in millions)
Current Assets:
Cash and cash equivalents $ 2,984 $ 1,639
Receivables —
Customer accounts 2,301 2,251
Unbilled revenues 938 931
Under recovered fuel clause revenues 227 316
Other accounts and notes 580 655
Accumulated provision for uncollectible accounts (98) (84)
Materials and supplies 2,380 2,202
Fossil fuel for generation 728 735
Natural gas for sale 198 396
Prepaid expenses 370 327
Regulatory assets – asset retirement obligations 353 353
Other regulatory assets 916 709
Other current assets 501 487
Total current assets 12,378 10,917
Property, Plant, and Equipment:
In service 151,437 146,114
Less: Accumulated depreciation 45,868 43,483
Plant in service, net of depreciation 105,569 102,631
Other utility plant, net — 307
Nuclear fuel, at amortized cost 902 897
Construction work in progress 11,874 10,534
Total property, plant, and equipment 118,345 114,369
Other Property and Investments:
Goodwill 5,161 5,161
Nuclear decommissioning trusts, at fair value 3,110 2,947
Equity investments in unconsolidated subsidiaries 1,428 1,318
Other intangible assets, net of amortization of $457 and $444, respectively 287 300
Miscellaneous property and investments 701 714
Total other property and investments 10,687 10,440
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization 1,369 1,358
Deferred charges related to income taxes 1,094 948
Prepaid pension costs 3,544 3,257
Unamortized loss on reacquired debt 179 187
Deferred under recovered fuel clause revenues 151 252
Regulatory assets – asset retirement obligations, deferred 5,042 5,129
Other regulatory assets, deferred 7,577 7,427
Other deferred charges and assets 1,661 1,436
Total deferred charges and other assets 20,617 19,994
Total Assets $ 162,027 $ 155,720
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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Table of Contents Index to Financial Statements
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholders' Equity At June 30, 2026 At December 31, 2025
(in millions)
Current Liabilities:
Securities due within one year $ 4,694 $ 6,220
Notes payable 2,132 722
Accounts payable 3,374 3,710
Customer deposits 487 475
Accrued taxes —
Accrued income taxes 70 22
Other accrued taxes 695 982
Accrued interest 812 807
Accrued compensation 927 1,418
Asset retirement obligations 658 662
Liabilities from risk management activities, net of collateral 151 118
Operating lease obligations 207 197
Natural gas cost over recovery 191 158
Other regulatory liabilities 190 240
Other current liabilities 1,146 1,157
Total current liabilities 15,734 16,888
Long-term Debt 68,756 65,649
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 12,628 12,133
Deferred credits related to income taxes 4,611 4,712
Accumulated deferred ITCs 2,066 2,002
Employee benefit obligations 1,029 980
Operating lease obligations, deferred 1,298 1,287
Asset retirement obligations, deferred 8,917 8,939
Other cost of removal obligations 2,084 2,036
Other regulatory liabilities, deferred 712 722
Other deferred credits and liabilities 1,850 1,505
Total deferred credits and other liabilities 35,195 34,316
Total Liabilities 119,685 116,853
Total Stockholders' Equity (See accompanying statements) 42,342 38,867
Total Liabilities and Stockholders' Equity $ 162,027 $ 155,720
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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Table of Contents Index to Financial Statements
SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Southern Company Common Stockholders' Equity
Number of Common Shares Common Stock Accumulated Other Comprehensive Income (Loss)
Issued Treasury Par Value Paid-In Capital Treasury Retained Earnings Noncontrolling Interests Total
(in millions)
Balance at December 31, 2024 1,098 (1) $ 5,446 $ 14,149 $ (59) $ 13,750 $ (78) $ 3,466 $ 36,674
Consolidated net income (loss) — — — — — 1,334 — (64) 1,270
Other comprehensive income — — — — — — 3 — 3
Stock issued 2 — 7 78 — — — — 85
Stock-based compensation — — — 5 — — — — 5
Dividends of $0.72 per share — — — — — (791) — — (791)
Capital contributions from noncontrolling interests — — — — — — — 19 19
Distributions to noncontrolling interests — — — — — — — (37) (37)
Other — — — (1) (2) (2) — — (5)
Balance at March 31, 2025 1,100 (1) $ 5,453 $ 14,231 $ (61) $ 14,291 $ (75) $ 3,384 $ 37,223
Consolidated net income (loss) — — — — — 880 — (27) 853
Other comprehensive income — — — — — — 4 — 4
Stock issued 1 — 5 84 — — — — 89
Stock-based compensation — — — 11 — — — — 11
Dividends of $0.74 per share — — — — — (815) — — (815)
Capital contributions from noncontrolling interests — — — — — — — 4 4
Distributions to noncontrolling interests — — — — — — — (33) (33)
Other — — — 6 (1) 1 — — 6
Balance at June 30, 2025 1,101 (1) $ 5,458 $ 14,332 $ (62) $ 14,357 $ (71) $ 3,328 $ 37,342
Balance at December 31, 2025 1,120 (1) $ 5,554 $ 15,740 $ (59) $ 14,856 $ (75) $ 2,851 $ 38,867
Consolidated net income (loss) — — — — — 1,356 — (18) 1,338
Other comprehensive income — — — — — — 2 — 2
Stock issued 8 — 34 555 — — — — 589
Stock-based compensation — — — (9) — — — — (9)
Dividends of $0.74 per share — — — — — (830) — — (830)
Capital contributions from noncontrolling interests — — — — — — — 4 4
Distributions to noncontrolling interests — — — — — — — (46) (46)
Other — — — (1) (1) — — (1) (3)
Balance at March 31, 2026 1,128 (1) $ 5,588 $ 16,285 $ (60) $ 15,382 $ (73) $ 2,790 $ 39,912
Consolidated net income — — — — — 1,174 — 14 1,188
Other comprehensive income (loss) — — — — — — (5) — (5)
Change in par value from $5.00 to $0.01 — — (5,577) 5,577 — — — — —
Stock issued 23 — — 2,116 — — — — 2,116
Stock-based compensation — — — 15 — — — — 15
Dividends of $0.76 per share — — — — — (858) — — (858)
Distributions to noncontrolling interests — — — — — — — (32) (32)
Other — — — 5 (1) 2 — — 6
Balance at June 30, 2026 1,151 (1) $ 11 $ 23,998 $ (61) $ 15,700 $ (78) $ 2,772 $ 42,342
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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Table of Contents Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Operating Revenues:
Retail revenues $ 1,710 $ 1,718 $ 3,438 $ 3,441
Wholesale revenues, non-affiliates 85 98 202 189
Wholesale revenues, affiliates 55 36 174 105
Other revenues 113 116 241 245
Total operating revenues 1,963 1,968 4,055 3,980
Operating Expenses:
Fuel 336 337 764 723
Purchased power, non-affiliates 63 54 136 124
Purchased power, affiliates 53 67 126 121
Other operations and maintenance 415 472 808 935
Depreciation and amortization 385 371 766 741
Taxes other than income taxes 118 120 251 250
Total operating expenses 1,370 1,421 2,851 2,894
Operating Income 593 547 1,204 1,086
Other Income and (Expense):
Allowance for equity funds used during construction 18 18 37 36
Interest expense, net of amounts capitalized (117) (116) (232) (225)
Other income (expense), net 78 47 116 84
Total other income and (expense) (21) (51) (79) (105)
Earnings Before Income Taxes 572 496 1,125 981
Income taxes 135 115 263 226
Net Income $ 437 $ 381 $ 862 $ 755
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Net Income $ 437 $ 381 $ 862 $ 755
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of $—, $—, $—, and $—, respectively (2) — (2) —
Reclassification adjustment for amounts included in net income, net of tax of $—, $—, $—, and $—, respectively — — — 1
Total other comprehensive income (loss) (2) — (2) 1
Comprehensive Income $ 435 $ 381 $ 860 $ 756
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
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Table of Contents Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
2026 2025
(in millions)
Operating Activities:
Net income $ 862 $ 755
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total 867 803
Deferred income taxes 88 116
Pension, postretirement, and other employee benefits (115) (89)
Settlement of asset retirement obligations (114) (120)
Retail fuel cost under recovery – long-term (66) (62)
Other, net (57) (44)
Changes in certain current assets and liabilities —
-Receivables (6) (94)
-Prepayments (66) (89)
-Other current assets (21) (8)
-Accounts payable (277) (251)
-Accrued taxes 72 25
-Accrued compensation (111) (93)
-Customer refunds 2 (110)
-Other current liabilities 20 (61)
Net cash provided from operating activities 1,078 678
Investing Activities:
Property additions (958) (1,065)
Contributions in aid of construction 157 31
Nuclear decommissioning trust fund purchases (307) (270)
Nuclear decommissioning trust fund sales 307 270
Cost of removal, net of salvage (95) (92)
Other investing activities 18 (43)
Net cash used for investing activities (878) (1,169)
Financing Activities:
Proceeds —
Senior notes — 600
Other long-term debt — 4
Redemptions —
Senior notes — (250)
Other long-term debt (45) —
Capital contributions from parent company 276 562
Payment of common stock dividends (601) (609)
Other financing activities 6 (7)
Net cash provided from (used for) financing activities (364) 300
Net Change in Cash, Cash Equivalents, and Restricted Cash (164) (191)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 566 585
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 402 $ 394
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $11 and $10 capitalized for 2026 and 2025, respectively) $ 229 $ 205
Income taxes, net 217 217
Noncash transactions —
Accrued property additions at end of period 131 116
Right-of-use assets obtained under operating leases 11 7
Right-of-use assets obtained under finance leases 3 1
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
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Table of Contents Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Assets At June 30, 2026 At December 31, 2025
(in millions)
Current Assets:
Cash and cash equivalents $ 402 $ 566
Receivables —
Customer accounts 587 470
Unbilled revenues 216 189
Affiliated 120 126
Other accounts and notes 84 113
Accumulated provision for uncollectible accounts (23) (23)
Fossil fuel stock 294 303
Materials and supplies 746 732
Prepaid expenses 152 86
Other regulatory assets 372 344
Other current assets 84 80
Total current assets 3,034 2,986
Property, Plant, and Equipment:
In service 40,731 38,915
Less: Accumulated provision for depreciation 14,001 12,816
Plant in service, net of depreciation 26,730 26,099
Other utility plant, net — 307
Nuclear fuel, at amortized cost 276 290
Construction work in progress 1,386 1,441
Total property, plant, and equipment 28,392 28,137
Other Property and Investments:
Nuclear decommissioning trusts, at fair value 1,653 1,542
Equity investments in unconsolidated subsidiaries 53 48
Miscellaneous property and investments 123 123
Total other property and investments 1,829 1,713
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization 89 86
Deferred charges related to income taxes 263 261
Prepaid pension and other postretirement benefit costs 1,061 1,016
Regulatory assets – asset retirement obligations 1,454 1,518
Other regulatory assets, deferred 2,146 1,982
Other deferred charges and assets 411 425
Total deferred charges and other assets 5,424 5,288
Total Assets $ 38,679 $ 38,124
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
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Table of Contents Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's Equity At June 30, 2026 At December 31, 2025
(in millions)
Current Liabilities:
Securities due within one year $ 303 $ 625
Accounts payable —
Affiliated 263 294
Other 422 576
Customer deposits 115 113
Accrued taxes 187 105
Accrued interest 137 134
Accrued compensation 185 275
Asset retirement obligations 261 256
Other regulatory liabilities 58 89
Other current liabilities 148 135
Total current liabilities 2,079 2,602
Long-term Debt 11,670 11,388
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,351 4,209
Deferred credits related to income taxes 1,535 1,585
Accumulated deferred ITCs 105 115
Employee benefit obligations 138 152
Operating lease obligations 80 78
Asset retirement obligations, deferred 3,387 3,423
Other regulatory liabilities, deferred 216 252
Other deferred credits and liabilities 587 326
Total deferred credits and other liabilities 10,399 10,140
Total Liabilities 24,148 24,130
Common Stockholder's Equity (See accompanying statements) 14,531 13,994
Total Liabilities and Stockholder's Equity $ 38,679 $ 38,124
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
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Table of Contents Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
Number of Common Shares Issued Common Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total
(in millions)
Balance at December 31, 2024 31 $ 1,222 $ 7,657 $ 4,214 $ (5) $ 13,088
Net income — — — 375 — 375
Capital contributions from parent company — — 527 — — 527
Other comprehensive income — — — — 1 1
Cash dividends on common stock — — — (305) — (305)
Other — — — — (1) (1)
Balance at March 31, 2025 31 $ 1,222 $ 8,184 $ 4,284 $ (5) $ 13,685
Net income — — — 381 — 381
Capital contributions from parent company — — 38 — — 38
Cash dividends on common stock — — — (304) — (304)
Other — — — (1) 1 —
Balance at June 30, 2025 31 $ 1,222 $ 8,222 $ 4,360 $ (4) $ 13,800
Balance at December 31, 2025 31 $ 1,222 $ 8,263 $ 4,512 $ (3) $ 13,994
Net income — — — 425 — 425
Capital contributions from parent company — — 226 — — 226
Cash dividends on common stock — — — (301) — (301)
Balance at March 31, 2026 31 $ 1,222 $ 8,489 $ 4,636 $ (3) $ 14,344
Net income — — — 437 — 437
Capital contributions from parent company — — 53 — — 53
Other comprehensive income (loss) — — — — (2) (2)
Cash dividends on common stock — — — (300) — (300)
Other — — — (1) — (1)
Balance at June 30, 2026 31 $ 1,222 $ 8,542 $ 4,772 $ (5) $ 14,531
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
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Table of Contents Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Operating Revenues:
Retail revenues $ 2,753 $ 2,765 $ 5,391 $ 5,395
Wholesale revenues 120 107 347 250
Other revenues 260 238 538 503
Total operating revenues 3,133 3,110 6,276 6,148
Operating Expenses:
Fuel 466 476 1,067 1,000
Purchased power, non-affiliates 171 180 329 340
Purchased power, affiliates 184 197 473 461
Other operations and maintenance 667 645 1,341 1,283
Depreciation and amortization 503 512 987 1,015
Taxes other than income taxes 138 173 313 342
Total operating expenses 2,129 2,183 4,510 4,441
Operating Income 1,004 927 1,766 1,707
Other Income and (Expense):
Allowance for equity funds used during construction 104 56 201 104
Interest expense, net of amounts capitalized (228) (198) (431) (385)
Other income (expense), net 50 58 108 112
Total other income and (expense) (74) (84) (122) (169)
Earnings Before Income Taxes 930 843 1,644 1,538
Income taxes 151 236 236 334
Net Income $ 779 $ 607 $ 1,408 $ 1,204
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Net Income $ 779 $ 607 $ 1,408 $ 1,204
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $—, $1, $—, and $1, respectively — 4 — 2
Reclassification adjustment for amounts included in net income, net of tax of $—, $—, $—, and $—, respectively — — — 1
Total other comprehensive income — 4 — 3
Comprehensive Income $ 779 $ 611 $ 1,408 $ 1,207
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
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Table of Contents Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
2026 2025
(in millions)
Operating Activities:
Net income $ 1,408 $ 1,204
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total 1,128 1,167
Deferred income taxes 25 238
Allowance for equity funds used during construction (201) (104)
Pension, postretirement, and other employee benefits (127) (128)
Settlement of asset retirement obligations (147) (149)
Storm damage cost recovery – long-term (139) (238)
Other, net (23) (39)
Changes in certain current assets and liabilities —
-Receivables (210) (270)
-Retail fuel cost under recovery 210 186
-Materials and supplies (132) 16
-Other current assets (36) (11)
-Accounts payable 48 (396)
-Accrued taxes (207) (196)
-Other current liabilities (20) 55
Net cash provided from operating activities 1,577 1,335
Investing Activities:
Property additions (4,233) (3,090)
Contributions in aid of construction 141 99
Nuclear decommissioning trust fund purchases (687) (507)
Nuclear decommissioning trust fund sales 687 507
Cost of removal, net of salvage (194) (152)
Other investing activities (26) (75)
Net cash used for investing activities (4,312) (3,218)
Financing Activities:
Increase in notes payable, net 70 285
Proceeds —
Senior notes 1,300 1,600
Short-term borrowings 250 200
FFB loan 1,016 —
Redemptions and repurchases —
Senior notes (325) (700)
Short-term borrowings (250) —
FFB loan (43) (43)
Other long-term debt (400) —
Capital contributions from parent company 2,463 1,671
Payment of common stock dividends (1,287) (1,105)
Other financing activities (46) (49)
Net cash provided from financing activities 2,748 1,859
Net Change in Cash, Cash Equivalents, and Restricted Cash 13 (24)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 59 118
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 72 $ 94
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $61 and $33 capitalized for 2026 and 2025, respectively) $ 392 $ 341
Income taxes, net (excludes credit transfers) 118 25
Noncash transactions —
Accrued property additions at end of period 1,050 699
Right-of-use assets obtained under operating leases 23 28
Right-of-use assets obtained under finance leases 1,400 13
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
22
Table of Contents Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Assets At June 30, 2026 At December 31, 2025
(in millions)
Current Assets:
Cash and cash equivalents $ 72 $ 59
Receivables —
Customer accounts, net 1,014 993
Unbilled revenues 577 346
Under recovered retail fuel clause revenues 161 310
Joint owner accounts 76 195
Affiliated 95 96
Other accounts and notes 127 61
Fossil fuel stock 364 362
Materials and supplies 1,130 994
Regulatory assets – asset retirement obligations 222 222
Other regulatory assets 500 335
Other current assets 288 285
Total current assets 4,626 4,258
Property, Plant, and Equipment:
In service 63,226 59,458
Less: Accumulated provision for depreciation 16,442 15,957
Plant in service, net of depreciation 46,784 43,501
Nuclear fuel, at amortized cost 626 606
Construction work in progress 8,215 6,764
Total property, plant, and equipment 55,625 50,871
Other Property and Investments:
Nuclear decommissioning trusts, at fair value 1,457 1,405
Equity investments in unconsolidated subsidiaries 39 40
Miscellaneous property and investments 229 231
Total other property and investments 1,725 1,676
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization 881 1,120
Deferred charges related to income taxes 805 660
Prepaid pension costs 1,180 1,099
Deferred under recovered retail fuel clause revenues 151 212
Regulatory assets – asset retirement obligations, deferred 3,360 3,382
Other regulatory assets, deferred 4,034 4,032
Other deferred charges and assets 984 767
Total deferred charges and other assets 11,395 11,272
Total Assets $ 73,371 $ 68,077
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
23
Table of Contents Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's Equity At June 30, 2026 At December 31, 2025
(in millions)
Current Liabilities:
Securities due within one year $ 1,548 $ 1,370
Notes payable 230 160
Accounts payable —
Affiliated 904 992
Other 1,756 1,728
Customer deposits 277 267
Accrued taxes 471 678
Accrued interest 236 234
Accrued compensation 217 327
Operating lease obligations 132 170
Asset retirement obligations 350 360
Other regulatory liabilities 29 52
Other current liabilities 346 332
Total current liabilities 6,496 6,670
Long-term Debt 22,857 20,122
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 4,902 4,811
Deferred credits related to income taxes 2,207 2,225
Accumulated deferred ITCs 461 354
Employee benefit obligations 192 189
Operating lease obligations, deferred 761 960
Asset retirement obligations, deferred 5,193 5,167
Other deferred credits and liabilities 682 545
Total deferred credits and other liabilities 14,398 14,251
Total Liabilities 43,751 41,043
Common Stockholder's Equity (See accompanying statements) 29,620 27,034
Total Liabilities and Stockholder's Equity $ 73,371 $ 68,077
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
24
Table of Contents Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
Number of Common Shares Issued Common Stock Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total
(in millions)
Balance at December 31, 2024 9 $ 398 $ 19,708 $ 3,562 $ 13 $ 23,681
Net income — — — 596 — 596
Capital contributions from parent company — — 702 — — 702
Other comprehensive income (loss) — — — — (1) (1)
Cash dividends on common stock — — — (552) — (552)
Balance at March 31, 2025 9 $ 398 $ 20,410 $ 3,606 $ 12 $ 24,426
Net income — — — 607 — 607
Capital contributions from parent company — — 972 — — 972
Other comprehensive income — — — — 4 4
Cash dividends on common stock — — — (553) — (553)
Other — — — 1 — 1
Balance at June 30, 2025 9 $ 398 $ 21,382 $ 3,661 $ 16 $ 25,457
Balance at December 31, 2025 9 $ 398 $ 22,416 $ 4,204 $ 16 $ 27,034
Net income — — — 628 — 628
Capital contributions from parent company — — 1,500 — — 1,500
Cash dividends on common stock — — — (644) — (644)
Other — — — 1 — 1
Balance at March 31, 2026 9 $ 398 $ 23,916 $ 4,189 $ 16 $ 28,519
Net income — — — 779 — 779
Capital contributions from parent company — — 965 — — 965
Cash dividends on common stock — — — (643) — (643)
Balance at June 30, 2026 9 $ 398 $ 24,881 $ 4,325 $ 16 $ 29,620
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
25
Table of Contents Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Operating Revenues:
Retail revenues $ 283 $ 274 $ 556 $ 522
Wholesale revenues, non-affiliates 74 62 162 133
Wholesale revenues, affiliates 35 55 131 136
Other revenues 11 9 26 30
Total operating revenues 403 400 875 821
Operating Expenses:
Fuel and purchased power 122 143 328 309
Other operations and maintenance 107 82 194 166
Depreciation and amortization 58 52 113 105
Taxes other than income taxes 36 36 72 69
Total operating expenses 323 313 707 649
Operating Income 80 87 168 172
Other Income and (Expense):
Interest expense, net of amounts capitalized (21) (20) (41) (40)
Other income (expense), net 9 9 19 16
Total other income and (expense) (12) (11) (22) (24)
Earnings Before Income Taxes 68 76 146 148
Income taxes 16 17 34 34
Net Income and Comprehensive Income $ 52 $ 59 $ 112 $ 114
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
26
Table of Contents Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
2026 2025
(in millions)
Operating Activities:
Net income $ 112 $ 114
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total 125 115
Deferred income taxes 14 4
Pension, postretirement, and other employee benefits (9) (8)
Settlement of asset retirement obligations (12) (7)
Other, net (3) (7)
Changes in certain current assets and liabilities —
-Receivables (11) (26)
-Retail fuel cost under recovery (14) (28)
-Fossil fuel stock — 20
-Other current assets (8) 8
-Accounts payable (23) (22)
-Accrued taxes (57) (49)
-Accrued compensation (21) (22)
-Wholesale fuel cost over recovery — (15)
-Other current liabilities — 1
Net cash provided from operating activities 93 78
Investing Activities:
Property additions (185) (166)
Contributions in aid of construction 4 57
Cost of removal, net of salvage (18) (17)
Payments pursuant to LTSAs (11) (11)
Other investing activities 1 (8)
Net cash used for investing activities (209) (145)
Financing Activities:
Increase in notes payable, net 38 18
Proceeds — Senior notes 75 100
Capital contributions from parent company 97 57
Payment of common stock dividends (96) (97)
Other financing activities (2) (2)
Net cash provided from financing activities 112 76
Net Change in Cash, Cash Equivalents, and Restricted Cash (4) 9
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 26 13
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 22 $ 22
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest $ 40 $ 37
Income taxes, net 23 21
Noncash transactions —
Accrued property additions at end of period 42 30
Right-of-use assets obtained under operating leases 3 —
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
27
Table of Contents Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Assets At June 30, 2026 At December 31, 2025
(in millions)
Current Assets:
Cash and cash equivalents $ 22 $ 26
Receivables —
Customer accounts, net 60 50
Unbilled revenues 48 44
Under recovered retail fuel clause revenues 55 —
Affiliated 27 26
Other accounts and notes 18 22
Fossil fuel stock 46 46
Materials and supplies 102 101
Other regulatory assets 58 49
Other current assets 14 10
Total current assets 450 374
Property, Plant, and Equipment:
In service 6,111 5,972
Less: Accumulated provision for depreciation 2,020 1,922
Plant in service, net of depreciation 4,091 4,050
Construction work in progress 223 238
Total property, plant, and equipment 4,314 4,288
Other Property and Investments 140 143
Deferred Charges and Other Assets:
Deferred charges related to income taxes 24 25
Prepaid pension costs 162 151
Deferred under recovered retail fuel clause revenues — 40
Regulatory assets – asset retirement obligations 228 229
Other regulatory assets, deferred 259 255
Accumulated deferred income taxes 59 66
Other deferred charges and assets 81 66
Total deferred charges and other assets 813 832
Total Assets $ 5,717 $ 5,637
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
28
Table of Contents Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's Equity At June 30, 2026 At December 31, 2025
(in millions)
Current Liabilities:
Securities due within one year $ 141 $ 66
Notes payable 38 —
Accounts payable —
Affiliated 72 70
Other 69 77
Accrued taxes 70 125
Accrued compensation 30 49
Asset retirement obligations 18 21
Other regulatory liabilities 24 20
Other current liabilities 97 92
Total current liabilities 559 520
Long-term Debt 1,720 1,720
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 501 491
Deferred credits related to income taxes 192 211
Employee benefit obligations 66 67
Asset retirement obligations, deferred 97 103
Other cost of removal obligations 103 115
Other regulatory liabilities, deferred 137 141
Other deferred credits and liabilities 40 80
Total deferred credits and other liabilities 1,136 1,208
Total Liabilities 3,415 3,448
Common Stockholder's Equity (See accompanying statements) 2,302 2,189
Total Liabilities and Stockholder's Equity $ 5,717 $ 5,637
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
29
Table of Contents Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
Number of Common Shares Issued Common Stock Paid-In Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total
(in millions)
Balance at December 31, 2024 1 $ 38 $ 4,791 $ (2,745) $ 5 $ 2,089
Net income — — — 55 — 55
Capital contributions from parent company — — 51 — — 51
Cash dividends on common stock — — — (48) — (48)
Other — — — — (1) (1)
Balance at March 31, 2025 1 $ 38 $ 4,842 $ (2,738) $ 4 $ 2,146
Net income — — — 59 — 59
Capital contributions from parent company — — 7 — — 7
Cash dividends on common stock — — — (49) — (49)
Other — — — 1 — 1
Balance at June 30, 2025 1 $ 38 $ 4,849 $ (2,727) $ 4 $ 2,164
Balance at December 31, 2025 1 $ 38 $ 4,871 $ (2,724) $ 4 $ 2,189
Net income — — — 60 — 60
Capital contributions from parent company — — 90 — — 90
Cash dividends on common stock — — — (48) — (48)
Balance at March 31, 2026 1 $ 38 $ 4,961 $ (2,712) $ 4 $ 2,291
Net income — — — 52 — 52
Capital contributions from parent company — — 7 — — 7
Cash dividends on common stock — — — (48) — (48)
Balance at June 30, 2026 1 $ 38 $ 4,968 $ (2,708) $ 4 $ 2,302
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
30
Table of Contents Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Operating Revenues:
Wholesale revenues, non-affiliates $ 439 $ 424 $ 1,016 $ 870
Wholesale revenues, affiliates 92 114 192 229
Other revenues 4 8 8 14
Total operating revenues 535 546 1,216 1,113
Operating Expenses:
Fuel 129 147 383 355
Purchased power 36 31 94 59
Other operations and maintenance 139 135 278 257
Depreciation and amortization 280 177 558 329
Taxes other than income taxes 13 13 25 25
Total operating expenses 597 503 1,338 1,025
Operating Income (Loss) (62) 43 (122) 88
Other Income and (Expense):
Interest expense, net of amounts capitalized (28) (24) (55) (50)
Other income (expense), net 2 3 4 6
Total other income and (expense) (26) (21) (51) (44)
Earnings (Loss) Before Income Taxes (88) 22 (173) 44
Income taxes (benefit) (77) (2) (147) (3)
Net Income (Loss) (11) 24 (26) 47
Net income (loss) attributable to noncontrolling interests 14 (27) (4) (91)
Net Income (Loss) Attributable to Southern Power $ (25) $ 51 $ (22) $ 138
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Net Income (Loss) $ (11) $ 24 $ (26) $ 47
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of $(2), $11, $(5), and $17, respectively (7) 35 (14) 52
Reclassification adjustment for amounts included in net income, net of tax of $1, $(10), $4. and $(15), respectively 4 (33) 13 (48)
Total other comprehensive income (loss) (3) 2 (1) 4
Comprehensive Income (Loss) (14) 26 (27) 51
Comprehensive income (loss) attributable to noncontrolling interests 14 (27) (4) (91)
Comprehensive Income (Loss) Attributable to Southern Power $ (28) $ 53 $ (23) $ 142
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
31
Table of Contents Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
2026 2025
(in millions)
Operating Activities:
Net income (loss) $ (26) $ 47
Adjustments to reconcile net income (loss) to net cash provided from operating activities —
Depreciation and amortization, total 568 340
Deferred income taxes (75) (2)
Utilization of federal tax credit carryforward 130 —
Amortization of ITCs (29) (29)
Loss on damaged equipment 22 —
Other, net (9) (18)
Changes in certain current assets and liabilities —
-Receivables (47) (69)
-Income taxes receivable (39) (2)
-Other current assets (24) 2
-Accounts payable (19) (20)
-Accrued compensation (11) (11)
-Other current liabilities 8 (6)
Net cash provided from operating activities 449 232
Investing Activities:
Property additions (399) (392)
Payments pursuant to LTSAs (28) (26)
Other investing activities 10 —
Net cash used for investing activities (417) (418)
Financing Activities:
Increase (decrease) in notes payable, net (135) 201
Proceeds — Senior notes 600 —
Redemptions — Senior notes (564) —
Capital contributions from parent company 465 146
Capital contributions from noncontrolling interests 4 23
Distributions to noncontrolling interests (76) (66)
Payment of common stock dividends (143) (139)
Other financing activities (10) (4)
Net cash provided from financing activities 141 161
Net Change in Cash, Cash Equivalents, and Restricted Cash 173 (25)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 105 168
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 278 $ 143
Supplemental Cash Flow Information:
Cash paid (received) during the period for —
Interest (net of $21 and $8 capitalized for 2026 and 2025, respectively) $ 61 $ 59
Income taxes, net (excludes credit transfers) (61) 52
Noncash transactions —
Accrued property additions at end of period 66 60
Right-of-use assets obtained under operating leases — 2
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
32
Table of Contents Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Assets At June 30, 2026 At December 31, 2025
(in millions)
Current Assets:
Cash and cash equivalents $ 278 $ 105
Receivables —
Customer accounts, net 193 151
Affiliated 42 35
Other 52 16
Materials and supplies 136 132
Prepaid income taxes 52 8
Other current assets 61 81
Total current assets 814 528
Property, Plant, and Equipment:
In service 15,339 15,034
Less: Accumulated provision for depreciation 5,564 5,214
Plant in service, net of depreciation 9,775 9,820
Construction work in progress 944 1,080
Total property, plant, and equipment 10,719 10,900
Other Property and Investments:
Intangible assets, net of amortization of $198 and $188, respectively 194 203
Net investment in sales-type leases 133 137
Total other property and investments 327 340
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization 474 479
Prepaid LTSAs 198 170
Other deferred charges and assets 248 240
Total deferred charges and other assets 920 889
Total Assets $ 12,780 $ 12,657
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
33
Table of Contents Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholders' Equity At June 30, 2026 At December 31, 2025
(in millions)
Current Liabilities:
Securities due within one year $ — $ 587
Notes payable — 138
Accounts payable —
Affiliated 76 88
Other 101 93
Accrued taxes 21 9
Accrued interest 32 38
Operating lease obligations 31 31
Other current liabilities 75 92
Total current liabilities 336 1,076
Long-term Debt 2,950 2,353
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 655 579
Accumulated deferred ITCs 1,354 1,383
Operating lease obligations, deferred 505 510
Other deferred credits and liabilities 238 235
Total deferred credits and other liabilities 2,752 2,707
Total Liabilities 6,038 6,136
Total Stockholders' Equity (See accompanying statements) 6,742 6,521
Total Liabilities and Stockholders' Equity $ 12,780 $ 12,657
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
34
Table of Contents Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total CommonStockholder's Equity Noncontrolling Interests Total
(in millions)
Balance at December 31, 2024 $ 1,306 $ 1,912 $ (2) $ 3,216 $ 3,466 $ 6,682
Net income (loss) — 87 — 87 (64) 23
Capital contributions from parent company 130 — — 130 — 130
Other comprehensive income — — 2 2 — 2
Cash dividends on common stock — (70) — (70) — (70)
Capital contributions from noncontrolling interests — — — — 19 19
Distributions to noncontrolling interests — — — — (37) (37)
Balance at March 31, 2025 $ 1,436 $ 1,929 $ — $ 3,365 $ 3,384 $ 6,749
Net income (loss) — 51 — 51 (27) 24
Capital contributions from parent company 16 — — 16 — 16
Other comprehensive income — — 2 2 — 2
Cash dividends on common stock — (69) — (69) — (69)
Capital contributions from noncontrolling interests — — — — 4 4
Distributions to noncontrolling interests — — — — (33) (33)
Other — (1) — (1) — (1)
Balance at June 30, 2025 $ 1,452 $ 1,910 $ 2 $ 3,364 $ 3,328 $ 6,692
Balance at December 31, 2025 $ 1,912 $ 1,758 $ — $ 3,670 $ 2,851 $ 6,521
Net income (loss) — 4 — 4 (18) (14)
Other comprehensive income — — 2 2 — 2
Cash dividends on common stock — (72) — (72) — (72)
Capital contributions from noncontrolling interests — — — — 4 4
Distributions to noncontrolling interests — — — — (46) (46)
Other (1) 1 — — (1) (1)
Balance at March 31, 2026 $ 1,911 $ 1,691 $ 2 $ 3,604 $ 2,790 $ 6,394
Net income (loss) — (25) — (25) 14 (11)
Capital contributions from parent company 465 — — 465 — 465
Other comprehensive income (loss) — — (3) (3) — (3)
Cash dividends on common stock — (71) — (71) — (71)
Distributions to noncontrolling interests — — — — (32) (32)
Other 1 (1) — — — —
Balance at June 30, 2026 $ 2,377 $ 1,594 $ (1) $ 3,970 $ 2,772 $ 6,742
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
35
Table of Contents Index to Financial Statements
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Operating Revenues:
Natural gas revenues (includes revenue taxes of $25, $27, $95, and $90, respectively) $ 966 $ 979 $ 3,157 $ 2,818
Total operating revenues 966 979 3,157 2,818
Operating Expenses:
Cost of natural gas 177 255 1,103 929
Other operations and maintenance 341 301 683 617
Depreciation and amortization 185 172 369 341
Taxes other than income taxes 61 61 166 158
Total operating expenses 764 789 2,321 2,045
Operating Income 202 190 836 773
Other Income and (Expense):
Earnings from equity method investments 32 23 78 62
Interest expense, net of amounts capitalized (101) (92) (206) (183)
Other income (expense), net 25 18 41 34
Total other income and (expense) (44) (51) (87) (87)
Earnings Before Income Taxes 158 139 749 686
Income taxes 32 33 176 162
Net Income $ 126 $ 106 $ 573 $ 524
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended June 30, For the Six Months Ended June 30,
2026 2025 2026 2025
(in millions) (in millions)
Net Income $ 126 $ 106 $ 573 $ 524
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of $(1), $(2), $1, and $2, respectively (3) (6) 2 6
Reclassification adjustment for amounts included in net income, net of tax of $1, $—, $(2), and $—, respectively 2 (1) (4) —
Pension and other postretirement benefit plans:
Reclassification adjustment for amounts included in net income, net of tax of $—, $—, $—, and $—, respectively — — (1) (1)
Total other comprehensive income (loss) (1) (7) (3) 5
Comprehensive Income $ 125 $ 99 $ 570 $ 529
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
36
Table of Contents Index to Financial Statements
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30,
2026 2025
(in millions)
Operating Activities:
Net income $ 573 $ 524
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total 366 338
Deferred income taxes 89 67
Other, net 40 26
Changes in certain current assets and liabilities —
-Receivables 427 209
-Natural gas for sale, net of temporary LIFO liquidation 197 233
-Other current assets (12) 37
-Accounts payable (152) (105)
-Accrued compensation (39) (44)
-Natural gas cost over recovery 34 (87)
-Other current liabilities (15) 12
Net cash provided from operating activities 1,508 1,210
Investing Activities:
Property additions (799) (704)
Contributions in aid of construction 11 27
Cost of removal, net of salvage (39) (42)
Change in construction payables, net 26 15
Capital contributions to unconsolidated subsidiaries (93) (31)
Other investing activities 5 —
Net cash used for investing activities (889) (735)
Financing Activities:
Increase (decrease) in notes payable, net (190) 16
Proceeds — Other long-term debt 500 —
Redemptions —
Senior notes (350) —
First mortgage bonds (100) —
Return of capital to parent company — (23)
Capital contributions from parent company 22 22
Payment of common stock dividends (281) (297)
Other financing activities (17) (12)
Net cash used for financing activities (416) (294)
Net Change in Cash, Cash Equivalents, and Restricted Cash 203 181
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period 15 44
Cash, Cash Equivalents, and Restricted Cash at End of Period $ 218 $ 225
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $7 and $9 capitalized for 2026 and 2025, respectively) $ 201 $ 185
Income taxes, net 55 66
Noncash transactions —
Accrued property additions at end of period 138 101
Right-of-use assets obtained under operating leases 1 60
Return of capital to parent company — 33
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
37
Table of Contents Index to Financial Statements
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Assets At June 30, 2026 At December 31, 2025
(in millions)
Current Assets:
Cash and cash equivalents $ 214 $ 15
Receivables —
Customer accounts 326 490
Unbilled revenues 85 341
Other accounts and notes 61 57
Accumulated provision for uncollectible accounts (65) (50)
Materials and supplies 61 62
Natural gas for sale 198 396
Prepaid expenses 35 26
Other regulatory assets 117 114
Other current assets 49 66
Total current assets 1,081 1,517
Property, Plant, and Equipment:
In service 24,726 24,098
Less: Accumulated depreciation 6,489 6,273
Plant in service, net of depreciation 18,237 17,825
Construction work in progress 969 863
Total property, plant, and equipment 19,206 18,688
Other Property and Investments:
Goodwill 5,015 5,015
Equity investments in unconsolidated subsidiaries 1,254 1,182
Other intangible assets, net of amortization of $181 and $179, respectively 1 3
Miscellaneous property and investments 25 24
Total other property and investments 6,295 6,224
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization 80 85
Prepaid pension and other postretirement benefit costs 301 229
Other regulatory assets, deferred 508 517
Other deferred charges and assets 133 127
Total deferred charges and other assets 1,022 958
Total Assets $ 27,604 $ 27,387
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's Equity At June 30, 2026 At December 31, 2025
(in millions)
Current Liabilities:
Securities due within one year $ 80 $ 531
Notes payable 235 425
Accounts payable —
Affiliated 75 70
Other 439 553
Customer deposits 75 75
Accrued taxes 111 107
Accrued interest 102 100
Accrued compensation 98 137
Natural gas cost over recovery 191 158
Other regulatory liabilities 36 36
Other current liabilities 96 110
Total current liabilities 1,538 2,302
Long-term Debt 9,224 8,743
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes 2,059 1,971
Deferred credits related to income taxes 667 681
Employee benefit obligations 135 78
Operating lease obligations 120 123
Other cost of removal obligations 1,981 1,921
Accrued environmental remediation 201 207
Other deferred credits and liabilities 238 234
Total deferred credits and other liabilities 5,401 5,215
Total Liabilities 16,163 16,260
Common Stockholder's Equity (See accompanying statements) 11,441 11,127
Total Liabilities and Stockholder's Equity $ 27,604 $ 27,387
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED)
Paid-In Capital RetainedEarnings Accumulated Other Comprehensive Income (Loss) Total
(in millions)
Balance at December 31, 2024 $ 10,863 $ 85 $ 48 $ 10,996
Net income — 418 — 418
Return of capital to parent company (56) — — (56)
Capital contributions from parent company 3 — — 3
Other comprehensive income — — 12 12
Cash dividends on common stock — (149) — (149)
Other — 1 — 1
Balance at March 31, 2025 $ 10,810 $ 355 $ 60 $ 11,225
Net income — 106 — 106
Capital contributions from parent company 23 — — 23
Other comprehensive income (loss) — — (7) (7)
Cash dividends on common stock — (148) — (148)
Other — (1) — (1)
Balance at June 30, 2025 $ 10,833 $ 312 $ 53 $ 11,198
Balance at December 31, 2025 $ 10,854 $ 222 $ 51 $ 11,127
Net income — 447 — 447
Capital contributions from parent company 1 — — 1
Other comprehensive income (loss) — — (2) (2)
Cash dividends on common stock — (141) — (141)
Other — 1 — 1
Balance at March 31, 2026 $ 10,855 $ 529 $ 49 $ 11,433
Net income — 126 — 126
Capital contributions from parent company 24 — — 24
Other comprehensive income (loss) — — (1) (1)
Cash dividends on common stock — (140) — (140)
Other — (1) — (1)
Balance at June 30, 2026 $ 10,879 $ 514 $ 48 $ 11,441
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
MISSISSIPPI POWER COMPANY
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
(UNAUDITED)
INDEX TO THE NOTES TO THE CONDENSED FINANCIAL STATEMENTS
Note Page
A Introduction 42
B Regulatory Matters 45
C Contingencies 49
D Revenue from Contracts with Customers and Lease Income 51
E Consolidated Entities and Equity Method Investments 58
F Financing and Leases 59
G Income Taxes 64
H Retirement Benefits 65
I Fair Value Measurements 68
J Derivatives 72
K Acquisitions and Dispositions 81
L Segment and Related Information 83
INDEX TO APPLICABLE NOTES TO FINANCIAL STATEMENTS BY REGISTRANT
The following unaudited notes to the condensed financial statements are 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. The table below indicates the Registrants to which each note applies.
Applicable Notes
Registrant A B C D E F G H I J K L
Southern Company l l l l l l l l l l l l
Alabama Power l l l l l l l l l l
Georgia Power l l l l l l l l l l
Mississippi Power l l l l l l l l l l
Southern Power l l l l l l l l l l l
Southern Company Gas l l l l l l l l l l l
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(A) INTRODUCTION
The condensed quarterly financial statements of each Registrant included herein have been prepared by such Registrant, without audit, pursuant to the rules and regulations of the SEC. The Condensed Balance Sheets at December 31, 2025 have been derived from the audited financial statements of each Registrant. In the opinion of each Registrant's management, the information regarding such Registrant furnished herein reflects all adjustments, which, except as otherwise disclosed, are of a normal recurring nature, necessary to present fairly the results of operations for the periods ended June 30, 2026 and 2025. Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although each Registrant believes that the disclosures regarding such Registrant are adequate to make the information presented not misleading. Disclosures which would substantially duplicate the disclosures in the Form 10-K and details which have not changed significantly in amount or composition since the filing of the Form 10-K are generally omitted from this Quarterly Report on Form 10-Q unless specifically required by GAAP. Therefore, these Condensed Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K. Due to the seasonal variations in the demand for energy and other factors, operating results for the periods presented are not necessarily indicative of the operating results to be expected for the full year.
The preparation of financial statements in conformity with GAAP requires the use of estimates, and the actual results may differ from those estimates. Certain prior year data presented in the financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the overall results of operations, financial position, or cash flows of any Registrant.
Goodwill and Other Intangible Assets
Goodwill at both June 30, 2026 and December 31, 2025 was as follows:
Goodwill
(in millions)
Southern Company $ 5,161
Southern Company Gas:
Gas distribution operations $ 4,034
Gas marketing services 981
Southern Company Gas total $ 5,015
Goodwill is not amortized but is subject to an annual impairment test during the fourth quarter of each year, or more frequently if goodwill impairment indicators exist.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Other intangible assets were as follows:
At June 30, 2026 At December 31, 2025
Gross Carrying Amount Accumulated Amortization Other Intangible Assets, Net Gross Carrying Amount Accumulated Amortization Other Intangible Assets, Net
(in millions) (in millions)
Southern Company
Subject to amortization:
Customer relationships $ 212 $ (192) $ 20 $ 212 $ (189) $ 23
Trade names 64 (64) — 64 (64) —
PPA fair value adjustments 390 (198) 192 390 (188) 202
Other 3 (3) — 3 (3) —
Total subject to amortization $ 669 $ (457) $ 212 $ 669 $ (444) $ 225
Not subject to amortization:
FCC licenses 75 — 75 75 — 75
Total other intangible assets $ 744 $ (457) $ 287 $ 744 $ (444) $ 300
Southern Power(*)
PPA fair value adjustments $ 390 $ (198) $ 192 $ 390 $ (188) $ 202
Southern Company Gas(*)
Gas marketing services
Customer relationships $ 156 $ (155) $ 1 $ 156 $ (153) $ 3
Trade names 26 (26) — 26 (26) —
Total other intangible assets $ 182 $ (181) $ 1 $ 182 $ (179) $ 3
(*)All subject to amortization.
Amortization associated with other intangible assets was as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Southern Company(a) $ 7 $ 8 $ 13 $ 16
Southern Power(b) 5 5 10 10
Southern Company Gas
Gas marketing services 1 1 2 3
(a)Includes $5 million for the three months ended June 30, 2026 and 2025 and $10 million for the six months ended June 30, 2026 and 2025 recorded as a reduction to operating revenues.
(b)Recorded as a reduction to operating revenues.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed balance sheets that total to the amount shown in the condensed statements of cash flows for the applicable Registrants:
Southern Company Southern Company Gas
(in millions)
At June 30, 2026
Cash and cash equivalents $ 2,984 $ 214
Restricted cash(a):
Other current assets 5 4
Total cash, cash equivalents, and restricted cash(b) $ 2,990 $ 218
At December 31, 2025
Cash and cash equivalents $ 1,639 $ 15
Restricted cash(a):
Other current assets 1 —
Total cash, cash equivalents, and restricted cash(b) $ 1,640 $ 15
(a)For Southern Company Gas, reflects funds held to support letters of credit. For Southern Company, also reflects collateral of $1 million for life insurance and long-term disability insurance, which was included at Southern Holdings.
(b)Total may not add due to rounding.
Natural Gas for Sale
With the exception of Nicor Gas, Southern Company Gas records natural gas inventories on a weighted average cost basis. For any declines in market prices below the weighted average cost considered to be non-temporary, an adjustment is recorded to reduce the value of natural gas inventories to market value. Nicor Gas' natural gas inventory is carried at cost on a LIFO basis. Inventory decrements occurring during the year that are restored prior to year-end are charged to cost of natural gas at the estimated annual replacement cost. Inventory decrements that are not restored prior to year-end are charged to cost of natural gas at the actual LIFO cost of the inventory layers liquidated.
Southern Company Gas recorded no material adjustments to natural gas inventories for either period presented. Nicor Gas' inventory decrements that occurred during the year have been restored as of June 30, 2026.
Asset Retirement Obligations
See BUSINESS – "Regulation – Federal Power Act" in Item 1 and Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.
On April 16, 2026, the FERC issued a surrender order for Georgia Power's Langdale and Riverview hydroelectric projects, which includes dam removal obligations and other post-dam removal activities. As a result, in June 2026, Georgia Power recorded AROs of $46 million.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
(B) REGULATORY MATTERS
See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information relating to regulatory matters.
The recovery balances for retail fuel and storm/property damage for the traditional electric operating companies and natural gas cost for Southern Company Gas at June 30, 2026 and December 31, 2025 were as follows:
Recovery/Regulatory Clause Balance Sheet Location At June 30, 2026 At December 31, 2025
(in millions)
Alabama Power
Rate ECR Other regulatory assets, current $ 7 $ —
Other regulatory assets, deferred 212 146
NDR Other regulatory liabilities, deferred 29 60
Georgia Power
Fuel cost recovery Receivables – under recovered retail fuel clause revenues $ 161 $ 310
Deferred under recovered retail fuel clause revenues 151 212
Storm damage recovery Other regulatory assets, current 187 31
Other regulatory assets, deferred 784 880
Mississippi Power
Fuel cost recovery(*) Receivables – under recovered retail fuel clause revenues $ 55 $ —
Deferred under recovered retail fuel clause revenues — 40
Property damage reserve Other regulatory liabilities, deferred 56 57
Southern Company Gas
Natural gas cost recovery Natural gas cost over recovery $ 191 $ 158
(*)Mississippi Power also has wholesale MRA and Market Based (MB) fuel cost recovery factors. At June 30, 2026 and December 31, 2025, wholesale MRA fuel cost under recovery was $10 million and $6 million, respectively, and was included in customer accounts receivable, net on Mississippi Power's balance sheets. The wholesale MB fuel cost recovery was immaterial for both periods presented.
Alabama Power
Power to the People Act
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.
Reliability Reserve Accounting Order
In accordance with the notification provided to the Alabama PSC through its annual Rate RSE filing indicating plans to use $60 million of the reliability reserve, Alabama Power utilized $40 million of its reliability reserve during the first six months of 2026 for reliability-related transmission, distribution, and generation expenses. At June 30, 2026, Alabama Power's reliability reserve balance was $144 million.
Environmental Accounting Order
As a result of the planned conversion of Plant Barry Unit 5 from coal to natural gas, the unit's net book value no longer meets the criteria to be considered probable of abandonment, and, in the first quarter 2026, approximately $307 million was reclassified from other utility plant, net to plant in service on Alabama Power's and Southern Company's balance sheets.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Georgia Power
Integrated Resource Plans
Certification Requests
On March 25, 2026, Georgia Interfaith Power & Light, Park Avenue Baptist Church, Unitarian Universalist Church of Savannah, Sierra Club, Adrien Webber, and Southern Alliance for Clean Energy filed a petition with the Fulton County Superior Court appealing the Georgia PSC's December 19, 2025 approval of Georgia Power's request for certification of resources totaling 9,885 MWs (2025 All-Source Certification). The petition requests a reversal of the 2025 All-Source Certification, including a decertification of at least 757 MWs of resources. Georgia Power intervened in the proceeding, and both the Georgia PSC and Georgia Power filed motions to dismiss on April 24, 2026 and June 23, 2026, respectively. Georgia Power believes the appeal has no merit; however, the ultimate outcome of this matter cannot be determined at this time.
On June 2, 2026, the FERC approved two affiliate PPAs with Southern Power procured under the 2022 IRP. These affiliate PPAs began in June 2026 with capacities of 638 MWs and 74 MWs. See Note (F) under "Georgia Power Lease Modification" for additional information.
2025 IRP
Pursuant to the final order for Georgia Power's 2025 IRP, on June 9, 2026, Georgia Power initiated a request for proposals for 2,000 MWs to 6,000 MWs of capacity resources with projected CODs or delivery commencement dates in 2032 and 2033.
Fuel Cost Recovery
On each of March 13, 2026, April 15, 2026, and May 14, 2026, Georgia Power filed an Interim Fuel Rider (IFR) notification and plan informing the Georgia PSC that Georgia Power's under recovered fuel balance accumulated since May 31, 2023 exceeded $200 million, as established in a Georgia PSC stipulation approved in 2023, as of February 28, 2026, March 31, 2026, and April 30, 2026, respectively. Georgia Power did not propose a fuel cost recovery rate change pursuant to these IFR notifications and plans.
On May 28, 2026, the Georgia PSC approved a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors to decrease annual fuel billings by 12.9%, or approximately $394 million, effective June 1, 2026. Under the approved stipulation, Georgia Power is required to file for an adjustment to its fuel cost recovery rates under an IFR prior to the next fuel case, subject to a maximum 40% cumulative change, if its under or over recovered fuel balance accumulated since May 31, 2026 exceeds $300 million. Within 30 days of the filing, the Georgia PSC will approve, modify, or reject any proposed fuel cost recovery rate adjustment. Georgia Power is scheduled to file its next fuel case no later than February 28, 2029. Changes in fuel rates have no significant effect on Georgia Power's net income but impact the related operating cash flows.
Storm Damage Recovery
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 recovery of storm restoration costs. Under the stipulation, the Georgia PSC approved the following:
•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.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Construction
At June 30, 2026, Georgia Power had recorded approximately $4.4 billion of combined capital costs, excluding AFUDC, for the projects reflected in the table below approved by the Georgia PSC through the 2023 IRP Update and certification requests in September and December 2025 authorized through its 2022 IRP. The total certified amounts related to these projects are approximately $19.5 billion, excluding AFUDC. The ultimate outcome of these matters cannot be determined at this time.
Resource/Project Approximate Nameplate Capacity(MW) Actual/Projected COD
Projects Under Construction at June 30, 2026
Battery Energy Storage
McGrau Ford Phase 2 265 Third quarter 2026
McGrau Ford Phase 1 265 Fourth quarter 2026
Hammond Phase 1 58 Fourth quarter 2026
Hammond Phase 2 193 Fourth quarter 2030
Twiggs County 200 Fourth quarter 2027
Wadley 260 Fourth quarter 2027
Bowen Phase 1 250 Fourth quarter 2028
Bowen Phase 2 250 Fourth quarter 2029
South Hall 250 Fourth quarter 2028
Wansley 500 Fourth quarter 2028
Yates Phase 1 320 Fourth quarter 2028
Yates Phase 2 250 Fourth quarter 2028
Thomson 500 Fourth quarter 2029
McIntosh 250 Fourth quarter 2030
Solar with Battery Energy Storage
Laurens County 200 Fourth quarter 2028
Plant Mitchell 150 Fourth quarter 2028
Combined Cycle
Plant Bowen Unit 7 741 Fourth quarter 2029
Plant Bowen Unit 8 741 Second quarter 2030
Plant Wansley Unit 10 727 Fourth quarter 2029
Plant Wansley Unit 11 727 Second quarter 2030
Plant McIntosh Unit 12 757 Fourth quarter 2030
Combustion Turbine
Plant Yates Unit 8(*) 442 Fourth quarter 2026
Plant Yates Unit 9(*) 442 Second quarter 2027
Plant Yates Unit 10(*) 442 Third quarter 2027
Projects Completed During the Six Months Ended June 30, 2026
Battery Energy Storage
Robins 128 March 2026
Moody 50 April 2026
(*)Pursuant to the 2023 IRP Update, cost recovery over the certified amount is limited.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Mississippi Power
Performance Evaluation Plan
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.
Integrated Resource Plans
On March 9, 2026, in compliance with its IRP requirements, Mississippi Power submitted its mid-point update to its 2024 IRP to the Mississippi PSC, indicating that the retirement dates of Plant Daniel Unit 2 and Plant Watson Unit 4 will extend beyond 2028.
On July 7, 2026, the Mississippi PSC approved a request from Mississippi Power to convert either Plant Daniel Unit 1 or Unit 2 from a coal-fired unit to a natural gas-fired unit. Conversion of the declared unit is projected to be completed in 2029.
The remaining net book value of Plant Daniel Units 1 and 2 was approximately $481 million at June 30, 2026, and Mississippi Power is continuing to depreciate these units using approved rates. Until a unit is declared to be converted, Mississippi Power is unable to determine what portion of the net book value will remain in service upon a unit conversion. Mississippi Power expects to reclassify the remaining net book value of assets no longer in service upon a unit conversion or retirement to a regulatory asset to be amortized over a period to be determined by the Mississippi PSC in future proceedings, consistent with a 2020 order. The ultimate outcome of this matter cannot be determined at this time.
Environmental Compliance Overview Plan
On April 14, 2026, the Mississippi PSC approved Mississippi Power's annual ECO Plan filing for 2026, resulting in a $2 million annual increase in revenues effective with the first billing cycle of May 2026.
Ad Valorem Tax Adjustment
On June 12, 2026, Mississippi Power submitted its annual ad valorem tax adjustment filing for 2026 to the Mississippi PSC, which requested a $7 million annual increase in revenues. The ultimate outcome of this matter cannot be determined at this time.
System Restoration Rider
On June 18, 2026, the Mississippi PSC approved Mississippi Power's annual SRR filing for 2026, with no change in retail rates. Mississippi Power's minimum annual SRR accrual increased from $13.5 million to $13.7 million.
Reliability Reserve Accounting Order
On March 16, 2026, through its annual PEP Evaluation Report, Mississippi Power notified the Mississippi PSC of its intent to use a portion of its $59 million retail reliability reserve balance during 2026. On June 18, 2026, the Mississippi PSC approved the annual PEP filing which allowed for 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. At June 30, 2026, Mississippi Power's retail reliability reserve balance was $52 million. See "Performance Evaluation Plan" herein for information regarding Mississippi Power's annual PEP filing.
Excess Accumulated Deferred Income Tax Accounting Order
On June 18, 2026, 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.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Company Gas
Rate Proceedings
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.
(C) CONTINGENCIES
See Note 3 to the financial statements in Item 8 of the Form 10-K for information relating to various lawsuits and other contingencies.
General Litigation Matters
The Registrants are involved in various matters being litigated and regulatory matters. The ultimate outcome of such pending or potential litigation or regulatory matters against each Registrant and any subsidiaries cannot be determined at this time; however, for current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on such Registrant's financial statements.
The Registrants intend to dispute the allegations raised in and vigorously defend against the pending legal challenges discussed below; however, the ultimate outcome of each of these matters cannot be determined at this time.
Southern Company
In July 2025, a purported class action complaint was filed in the U.S. District Court for the District of Maryland against two nuclear consulting companies and all U.S. commercial nuclear power operators, or affiliated entities, including Southern Company. The purported class of plaintiffs includes all persons employed in nuclear power generation by the defendants, including nuclear operators, nuclear engineers, and nuclear technicians, from May 1, 2003 to the present. The complaint alleges that, since at least May 2003, the nuclear power industry conspired to fix and suppress employee compensation for nuclear power generation employees in violation of federal antitrust law. Although not named as defendants, other entities are accused of having participated in the conspiracy alleged by the plaintiffs. The plaintiffs seek to recover, among other relief, unspecified monetary damages, including treble damages and attorneys' fees, and injunctive relief. In October 2025, Southern Company moved to dismiss the complaint. In November 2025, the plaintiffs filed an amended complaint naming Southern Nuclear, among others, as a defendant. In December 2025, Southern Company and Southern Nuclear filed a motion to dismiss the amended complaint. An adverse outcome could have a material impact on Southern Company's financial statements.
Alabama Power
In 2022, Mobile Baykeeper filed a citizen suit in the U.S. District Court for the Southern District of Alabama alleging that Alabama Power's plan to close the Plant Barry surface impoundment utilizing a closure-in-place methodology violates the Resource Conservation and Recovery Act (RCRA) and regulations governing CCR. Among other relief requested, Mobile Baykeeper sought a declaratory judgment that the RCRA and regulations governing CCR were being violated, preliminary and injunctive relief to prevent implementation of Alabama Power's closure plan, and the development of a closure plan that satisfies regulations governing CCR requirements.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Later in 2022, Alabama Power filed a motion to dismiss the case. In 2024, the lawsuit was dismissed without prejudice by the U.S. District Court judge. Later in 2024, the U.S. District Court judge denied a motion to reconsider filed by the plaintiff, and the plaintiff filed a notice of appeal in the U.S. Court of Appeals for the Eleventh Circuit challenging the denial of the motion to reconsider the order of dismissal. On May 18, 2026, the U.S. Court of Appeals for the Eleventh Circuit overturned the dismissal and remanded the case to the U.S. District Court for further proceedings.
In 2023, the EPA issued a Notice of Potential Violations (NOPV) associated with Alabama Power's plan to close the Plant Barry surface impoundment. In 2024, Alabama Power reached a settlement with the EPA resolving two of the three allegations in the NOPV related to the groundwater monitoring system and the emergency action plan at the Plant Barry surface impoundment. The settlement did not resolve the EPA's allegation relating to Alabama Power's plan to close the Plant Barry surface impoundment. Alabama Power has affirmed to the EPA its position that it is in compliance with CCR requirements.
In July 2025, Coosa Riverkeeper filed a citizen suit in the U.S. District Court for the Northern District of Alabama alleging that Alabama Power's closure of the Plant Gadsden surface impoundment utilizing a closure-in-place methodology violates the RCRA and regulations governing CCR. Among other relief requested, Coosa Riverkeeper seeks declaratory judgment that Alabama Power is in violation of the RCRA and regulations governing CCR, and preliminary and injunctive relief to require Alabama Power to close the CCR unit and operate a groundwater monitoring system in a different manner to satisfy the RCRA and the regulations governing CCR requirements. In September 2025, Alabama Power filed a motion to dismiss the citizen suit.
These matters could have a material impact on Alabama Power's and Southern Company's financial statements, including ARO estimates and cash flows. See Note 6 to the financial statements in Item 8 of the Form 10-K for a discussion of Alabama Power's ARO liabilities.
Environmental Remediation
The Southern Company system must comply with environmental laws and regulations governing the handling and disposal of waste and releases of hazardous substances. Under these various laws and regulations, the Southern Company system could incur substantial costs to clean up affected sites. The traditional electric operating companies and the natural gas distribution utilities in Illinois and Georgia have each received authority from their respective state PSCs or other applicable state regulatory agencies to recover approved environmental remediation costs through regulatory mechanisms. These regulatory mechanisms are adjusted annually or as necessary within limits approved by the state PSCs or other applicable state regulatory agencies.
Georgia Power's environmental remediation liability was $15 million and $14 million at June 30, 2026 and December 31, 2025, respectively. Georgia Power has been designated or identified as a potentially responsible party at sites governed by the Georgia Hazardous Site Response Act and/or by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and assessment and potential cleanup of such sites is expected.
Southern Company Gas' environmental remediation liability was $215 million and $227 million at June 30, 2026 and December 31, 2025, respectively, based on the estimated cost of environmental investigation and remediation at known former manufactured gas plant operating sites.
The ultimate outcome of these matters cannot be determined at this time; however, as a result of the regulatory treatment for environmental remediation expenses described above, the final disposition of these matters is not expected to have a material impact on the financial statements of the applicable Registrants.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
(D) REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME
Revenue from Contracts with Customers
The Registrants generate revenues from a variety of sources, some of which are not accounted for as revenue from contracts with customers, such as leases, derivatives, and certain cost recovery mechanisms. Included in the wholesale electric revenues of the traditional electric operating companies and Southern Power are revenues associated with affiliate transactions. These revenues are generated through long-term PPAs or short-term energy sales made in accordance with the IIC, as approved by the FERC. Amounts related to these affiliate revenues are eliminated in consolidation for Southern Company. See Note 1 to the financial statements under "Affiliate Transactions" and "Revenues" in Item 8 of the Form 10-K for additional information. See "Lease Income" herein and Note (J) for additional information on revenue accounted for under lease and derivative accounting guidance, respectively.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The following table disaggregates revenue from contracts with customers for the three and six months ended June 30, 2026 and 2025:
Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Three Months Ended June 30, 2026
Operating revenues
Retail electric revenues
Residential $ 2,007 $ 720 $ 1,208 $ 79 $ — $ —
Commercial 1,757 501 1,166 90 — —
Industrial 1,021 441 471 109 — —
Other 29 3 24 2 — —
Total retail electric revenues 4,814 1,665 2,869 280 — —
Natural gas distribution revenues
Residential 353 — — — — 353
Commercial 89 — — — — 89
Transportation 358 — — — — 358
Industrial 6 — — — — 6
Other 67 — — — — 67
Total natural gas distribution revenues 873 — — — — 873
Wholesale electric revenues
PPA energy revenues 301 47 40 8 218 —
PPA capacity revenues 145 18 32 25 89 —
Non-PPA revenues 64 55 19 80 43 —
Total wholesale electric revenues 510 120 91 113 350 —
Other natural gas revenues
Gas marketing services 73 — — — — 73
Other 2 — — — — 2
Total other natural gas revenues 75 — — — — 75
Other revenues 450 62 212 11 4 —
Total revenue from contracts with customers 6,722 1,847 3,172 404 354 948
Other revenue sources(*) 255 116 (39) (1) 181 18
Total operating revenues $ 6,977 $ 1,963 $ 3,133 $ 403 $ 535 $ 966
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Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Six Months Ended June 30, 2026
Operating revenues
Retail electric revenues
Residential $ 4,010 $ 1,493 $ 2,358 $ 159 $ — $ —
Commercial 3,419 978 2,269 172 — —
Industrial 1,962 855 909 198 — —
Other 61 6 50 5 — —
Total retail electric revenues 9,452 3,332 5,586 534 — —
Natural gas distribution revenues
Residential 1,380 — — — — 1,380
Commercial 342 — — — — 342
Transportation 798 — — — — 798
Industrial 30 — — — — 30
Other 213 — — — — 213
Total natural gas distribution revenues 2,763 — — — — 2,763
Wholesale electric revenues
PPA energy revenues 796 93 104 11 610 —
PPA capacity revenues 294 36 76 46 172 —
Non-PPA revenues 156 175 63 250 88 —
Total wholesale electric revenues 1,246 304 243 307 870 —
Other natural gas revenues
Gas marketing services 355 — — — — 355
Other 4 — — — — 4
Total other natural gas revenues 359 — — — — 359
Other revenues 945 140 449 26 8 —
Total revenue from contracts with customers 14,765 3,776 6,278 867 878 3,122
Other revenue sources(*) 609 279 (2) 8 338 35
Total operating revenues $ 15,374 $ 4,055 $ 6,276 $ 875 $ 1,216 $ 3,157
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Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Three Months Ended June 30, 2025
Operating revenues
Retail electric revenues
Residential $ 2,021 $ 725 $ 1,217 $ 79 $ — $ —
Commercial 1,716 504 1,127 85 — —
Industrial 1,015 432 496 87 — —
Other 29 2 25 2 — —
Total retail electric revenues 4,781 1,663 2,865 253 — —
Natural gas distribution revenues
Residential 394 — — — — 394
Commercial 94 — — — — 94
Transportation 331 — — — — 331
Industrial 7 — — — — 7
Other 60 — — — — 60
Total natural gas distribution revenues 886 — — — — 886
Wholesale electric revenues
PPA energy revenues 310 58 50 2 210 —
PPA capacity revenues 154 29 35 17 85 —
Non-PPA revenues 60 36 10 100 59 —
Total wholesale electric revenues 524 123 95 119 354 —
Other natural gas revenues
Gas marketing services 81 — — — — 81
Other 5 — — — — 5
Total other natural gas revenues 86 — — — — 86
Other revenues 457 67 206 9 8 —
Total revenue from contracts with customers 6,734 1,853 3,166 381 362 972
Other revenue sources(*) 239 115 (56) 19 184 7
Total operating revenues $ 6,973 $ 1,968 $ 3,110 $ 400 $ 546 $ 979
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Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Six Months Ended June 30, 2025
Operating revenues
Retail electric revenues
Residential $ 4,087 $ 1,531 $ 2,403 $ 153 $ — $ —
Commercial 3,327 986 2,181 160 — —
Industrial 1,930 822 940 168 — —
Other 61 4 52 5 — —
Total retail electric revenues 9,405 3,343 5,576 486 — —
Natural gas distribution revenues
Residential 1,239 — — — — 1,239
Commercial 292 — — — — 292
Transportation 737 — — — — 737
Industrial 26 — — — — 26
Other 170 — — — — 170
Total natural gas distribution revenues 2,464 — — — — 2,464
Wholesale electric revenues
PPA energy revenues 723 112 134 5 491 —
PPA capacity revenues 299 57 74 34 169 —
Non-PPA revenues 136 106 19 233 121 —
Total wholesale electric revenues 1,158 275 227 272 781 —
Other natural gas revenues
Gas marketing services 337 — — — — 337
Other 10 — — — — 10
Total other natural gas revenues 347 — — — — 347
Other revenues 954 150 436 30 14 —
Total revenue from contracts with customers 14,328 3,768 6,239 788 795 2,811
Other revenue sources(*) 420 212 (91) 33 318 7
Total operating revenues $ 14,748 $ 3,980 $ 6,148 $ 821 $ 1,113 $ 2,818
(*)Other revenue sources relate to revenues from customers accounted for as derivatives and leases, alternative revenue programs primarily at Southern Company Gas, and cost recovery mechanisms and revenues (including those related to fuel costs) that meet other scope exceptions for revenues from contracts with customers at the traditional electric operating companies.
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Contract Balances
The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at June 30, 2026 and December 31, 2025:
Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Accounts Receivable
At June 30, 2026 $ 3,155 $ 860 $ 1,549 $ 122 $ 136 $ 448
At December 31, 2025 3,139 716 1,278 115 132 864
Contract Assets
At June 30, 2026 $ 354 $ — $ 189 $ 4 $ — $ 67
At December 31, 2025 294 3 160 — — 67
Contract Liabilities
At June 30, 2026 $ 329 $ 7 $ 123 $ — $ 1 $ —
At December 31, 2025 213 6 75 — 2 —
Contract assets for Georgia Power primarily relate to unregulated service agreements, where payment is contingent on project completion, and retail customer fixed bill programs, where payment is contingent upon Georgia Power's continued performance and the customer's continued participation in the program over a one-year contract term. Contract liabilities for Georgia Power primarily relate to cash collections recognized in advance of revenue for unregulated service agreements. Southern Company Gas' contract assets relate to work performed on an energy efficiency enhancement and upgrade contract with the U.S. General Services Administration. Southern Company Gas received cash advances totaling approximately $68 million from a third-party financial institution to fund work performed. These advances have been accounted for as long-term debt on the balance sheets. See Note 1 to the financial statements under "Affiliate Transactions" in Item 8 of the Form 10-K for additional information regarding the construction contract. At June 30, 2026 and December 31, 2025, Southern Company's unregulated distributed generation business had contract assets of $92 million and $63 million, respectively, and contract liabilities of $199 million and $132 million, respectively, for outstanding performance obligations, all of which are expected to be satisfied within one year.
Revenues recognized in the three and six months ended June 30, 2026, which were included in contract liabilities at December 31, 2025, were $26 million and $80 million, respectively, for Southern Company, $7 million and $18 million, respectively, for Georgia Power, and immaterial for the other Registrants. Contract liabilities are primarily classified as current on the balance sheets as the corresponding revenues are generally expected to be recognized within one year.
Remaining Performance Obligations
Southern Company's subsidiaries may enter into long-term contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. For the traditional electric operating companies and Southern Power, these contracts primarily relate to PPAs whereby electricity and generation capacity are provided to a customer. The revenue recognized for the delivery of electricity is variable; however, certain PPAs include a fixed payment for fixed generation capacity over the term of the contract. Southern Company's unregulated distributed generation business also has partially satisfied performance obligations related
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to certain fixed price contracts. Revenues from contracts with customers related to these performance obligations remaining at June 30, 2026 are expected to be recognized as follows:
2026 (remaining) 2027 2028 2029 2030 Thereafter
(in millions)
Southern Company $ 668 $ 826 $ 472 $ 413 $ 416 $ 3,130
Alabama Power 7 5 4 3 1 6
Georgia Power 37 69 46 22 22 146
Mississippi Power(*) 33 69 73 12 — —
Southern Power(*) 184 349 389 393 393 2,978
Southern Company Gas 28 24 — — — —
(*)Includes performance obligations related to affiliate PPAs with Georgia Power. See Note 1 to the financial statements under "Affiliate Transactions" in Item 8 of the Form 10-K for additional information.
Lease Income
Lease income for the three and six months ended June 30, 2026 and 2025 was as follows:
Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Three Months Ended June 30, 2026
Lease income - interest income on sales-type leases $ 5 $ — $ — $ 3 $ 2 $ —
Lease income - operating leases 34 3 7 1 27 9
Variable lease income 125 — — — 136 —
Total lease income $ 164 $ 3 $ 7 $ 4 $ 165 $ 9
Six Months Ended June 30, 2026
Lease income - interest income on sales-type leases $ 12 $ — $ — $ 7 $ 4 $ —
Lease income - operating leases 69 6 15 2 64 18
Variable lease income 204 — — — 223 —
Total lease income $ 285 $ 6 $ 15 $ 9 $ 291 $ 18
Three Months Ended June 30, 2025
Lease income - interest income on sales-type leases $ 6 $ — $ — $ 4 $ 2 $ —
Lease income - operating leases 33 2 7 1 37 9
Variable lease income 125 — — — 136 —
Total lease income $ 164 $ 2 $ 7 $ 5 $ 175 $ 9
Six Months Ended June 30, 2025
Lease income - interest income on sales-type leases $ 11 $ — $ — $ 7 $ 4 $ —
Lease income - operating leases 66 3 14 1 73 18
Variable lease income 207 1 — — 225 —
Total lease income $ 284 $ 4 $ 14 $ 8 $ 302 $ 18
Lease payments received under tolling arrangements and PPAs consist of either scheduled payments or variable payments based on the amount of energy produced by the underlying electric generating units. Lease income related to PPAs is included in wholesale revenues for Alabama Power, Georgia Power, and Southern Power.
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(E) CONSOLIDATED ENTITIES AND EQUITY METHOD INVESTMENTS
See Note 7 to the financial statements in Item 8 of the Form 10-K for additional information.
Southern Company
At June 30, 2026 and December 31, 2025, Southern Holdings had equity method investments totaling $156 million and $124 million, respectively, primarily related to investments in venture capital funds focused on energy and utility investments. The net earnings (losses) from these investments totaled $45 million and $(14) million for the three months ended June 30, 2026 and 2025, respectively, and $48 million and $(20) million for the six months ended June 30, 2026 and 2025, respectively.
Southern Power
Variable Interest Entities
Southern Power has certain subsidiaries that are determined to be VIEs. Southern Power is considered the primary beneficiary of these VIEs because it controls the most significant activities of the VIEs, including operating and maintaining the respective assets, and has the obligation to absorb expected losses of these VIEs to the extent of its equity interests.
SP Solar
At June 30, 2026 and December 31, 2025, SP Solar had total assets of $5.1 billion and $5.2 billion, respectively, total liabilities of $364 million and $360 million, respectively, and noncontrolling interests of $907 million and $918 million, respectively. Cash distributions from SP Solar are allocated 67% to Southern Power and 33% to the limited partner in accordance with their partnership interest percentage. Under the terms of the limited partnership agreement, distributions without limited partner consent are limited to available cash and SP Solar is obligated to distribute all such available cash to its partners each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves.
Southern Power consolidates SP Solar, as the primary beneficiary, since it controls the most significant activities of the entity, including operating and maintaining its assets. Certain transfers and sales of the assets in the VIE are subject to partner consent, and the liabilities are non-recourse to the general credit of Southern Power. Liabilities consist of customary working capital items and do not include any long-term debt.
Other Variable Interest Entities
Southern Power has other consolidated VIEs that relate to certain subsidiaries that have either sold noncontrolling interests to tax equity investors or acquired less than a 100% interest from facility developers. These entities are considered VIEs because the arrangements are structured similar to a limited partnership and the noncontrolling members do not have substantive kick-out rights.
At June 30, 2026 and December 31, 2025, the other VIEs had total assets of $1.5 billion and $1.6 billion, respectively, total liabilities of $259 million and $236 million, respectively, and noncontrolling interests of $563 million and $617 million, respectively. Under the terms of the partnership agreements, distributions of all available cash are required each month or quarter and additional distributions require partner consent.
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Southern Company Gas
The carrying amounts of Southern Company Gas' equity method investments at June 30, 2026 and December 31, 2025 were as follows:
Investment Balance At June 30, 2026 At December 31, 2025
(in millions)
SNG $ 1,220 $ 1,148
Other 34 34
Total $ 1,254 $ 1,182
The earnings from Southern Company Gas' equity method investment in SNG were $32 million and $23 million for the three months ended June 30, 2026 and 2025, respectively, and $77 million and $62 million for the six months ended June 30, 2026 and 2025, respectively. The earnings from Southern Company Gas' other equity method investments were immaterial for all periods presented.
(F) FINANCING AND LEASES
Bank Credit Arrangements
See Note 8 to the financial statements under "Bank Credit Arrangements" in Item 8 of the Form 10-K for additional information.
At June 30, 2026, committed credit arrangements with banks were as follows:
Expires
Company 2026 2027 2028 2029 2031 Total Unused Expires within One Year
(in millions)
Southern Company parent(a) $ — $ — $ 500 $ — $ 2,500 $ 3,000 $ 2,999 $ —
Alabama Power(b) 15 — — 650 700 1,365 1,365 15
Georgia Power(c) — — — — 2,050 2,050 2,042 —
Mississippi Power(a) — — — 125 150 275 275 —
Southern Power(a)(d) — — — — 600 600 600 —
Southern Company Gas(e) — — — — 1,600 1,600 1,598 —
SEGCO — 30 — — — 30 30 30
Southern Company $ 15 $ 30 $ 500 $ 775 $ 7,600 $ 8,920 $ 8,909 $ 45
(a)Arrangement expiring in 2031 represents a $3.25 billion combined arrangement for Southern Company, Mississippi Power, and Southern Power allowing for flexible sublimits. Pursuant to the combined facility, the allocations among Southern Company, Mississippi Power, and Southern Power may be adjusted.
(b)Includes $15 million expiring in 2026 at Alabama Property Company, a wholly-owned subsidiary of Alabama Power, of which $15 million was unused at June 30, 2026. Alabama Power is not party to this arrangement.
(c)Georgia Power had $26 million of letters of credit outstanding under an uncommitted letter of credit facility at June 30, 2026.
(d)Does not include Southern Power Company's $75 million and $100 million continuing letter of credit facilities for standby letters of credit, expiring in 2027 and 2029, respectively, of which $17 million and $4 million, respectively, was unused at June 30, 2026. In addition, Southern Power Company had $23 million of letters of credit outstanding under an uncommitted letter of credit facility at June 30, 2026. Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities.
(e)Southern Company Gas, as the parent entity, guarantees the obligations of Southern Company Gas Capital, which is the borrower of $800 million of the credit arrangement expiring in 2031. Southern Company Gas' committed credit arrangement expiring in 2031 also includes $800 million for which Nicor Gas is the borrower and which is restricted for working capital needs of Nicor Gas. Pursuant to the multi-year credit arrangement expiring in 2031, the allocations between Southern Company Gas Capital and Nicor Gas may be adjusted.
As reflected in the table above, in March 2026, (i) Southern Company, Mississippi Power, and Southern Power extended the maturity date of their $3.25 billion combined multi-year credit arrangement from 2030 to 2031, (ii)
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Southern Company extended the maturity date of its multi-year credit agreement from 2027 to 2028, (iii) Georgia Power extended the maturity date of its multi-year credit arrangement from 2030 to 2031, and (iv) Mississippi Power extended the maturity date of its multi-year credit arrangement from 2027 to 2029. In May 2026, Alabama Power and Southern Company Gas Capital, along with Nicor Gas, extended the maturity date of each of their respective multi-year credit arrangements from 2030 to 2031. In May and June 2026, SEGCO amended its credit arrangements to extend the maturity dates from 2026 to 2027.
Subject to applicable market conditions, Southern Company and its subsidiaries expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, Southern Company and its subsidiaries may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
These bank credit arrangements, as well as the term loan arrangements of the Registrants, Nicor Gas, and SEGCO, contain covenants that limit debt levels and contain cross-acceleration provisions to other indebtedness (including guarantee obligations) that are restricted only to the indebtedness of the individual company. The cross-acceleration provisions to other indebtedness would trigger an event of default if the applicable borrower defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2026, the Registrants, Nicor Gas, and SEGCO were in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.
A portion of the unused credit with banks is allocated to provide liquidity support to certain revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO. At June 30, 2026, outstanding variable rate demand revenue bonds of the traditional electric operating companies with allocated liquidity support totaled approximately $1.5 billion (comprised of approximately $796 million at Alabama Power, $667 million at Georgia Power, and $58 million at Mississippi Power). In addition, at June 30, 2026, Georgia Power had approximately $210 million of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months. Variable rate demand revenue bonds and fixed rate revenue bonds required to be remarketed within the next 12 months are classified as long-term debt on the balance sheets as a result of available long-term committed credit.
DOE Loan Guarantee Borrowings
On February 20, 2026, pursuant to the loan guarantee program (DOE Loan Guarantee Program) established under Title XVII of the Energy Policy Act of 2005, as amended (Title XVII), Alabama Power entered into (i) a loan guarantee agreement, dated as of February 20, 2026 (Alabama Power LGA), between Alabama Power and the DOE, as guarantor, (ii) a note purchase agreement, dated as of February 20, 2026 (Alabama Power NPA), among Alabama Power, the FFB, and the Secretary of Energy, acting through the DOE, and (iii) future advance promissory notes, each dated February 20, 2026, made by Alabama Power to the FFB (each an Alabama Power FFB Note and, together with the Alabama Power NPA, the Alabama Power FFB Credit Facility Documents). The Alabama Power LGA and the Alabama Power FFB Credit Facility Documents are referred to herein together as the Alabama Power Loan Documents.
In addition, on February 20, 2026, pursuant to the DOE Loan Guarantee Program, Georgia Power entered into (i) a loan guarantee agreement, dated as of February 20, 2026 (Georgia Power LGA and, together with the Alabama Power LGA, the Loan Guarantee Agreements), between Georgia Power and the DOE, as guarantor, (ii) a note purchase agreement, dated as of February 20, 2026 (Georgia Power NPA), among Georgia Power, the FFB, and the Secretary of Energy, acting through the DOE, and (iii) future advance promissory notes, each dated February 20, 2026, made by Georgia Power to the FFB (each a Georgia Power FFB Note and, together with the Georgia Power NPA, the Georgia Power FFB Credit Facility Documents). The Georgia Power LGA and the Georgia Power FFB Credit Facility Documents are referred to herein together as the Georgia Power Loan Documents.
The Alabama Power FFB Credit Facility Documents provide for a multi-advance term loan facility under which Alabama Power may make term loan borrowings through the FFB (Alabama Power Credit Facility). The Georgia Power FFB Credit Facility Documents provide for a multi-advance term loan facility under which Georgia Power may make term loan borrowings through the FFB (Georgia Power Credit Facility and, together with the Alabama
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Power Credit Facility, the Credit Facilities). Each of Alabama Power and Georgia Power is referred to herein as a Borrower in connection with its applicable Credit Facility.
Proceeds of advances made under each Credit Facility must be used for the purpose of reimbursing the applicable Borrower for a portion (up to 80%) of "eligible project costs" (as defined in the applicable Loan Guarantee Agreement) incurred by such Borrower for projects that are eligible for financing under the terms of the applicable Loan Guarantee Agreement and the DOE Loan Guarantee Program (Eligible Projects). Eligible Projects may include new gas generating units and upgrades associated with existing gas generating units; new transmission lines, substations, and transmission system upgrades; new stand-alone battery energy storage systems; hydropower refurbishment and upgrades; upgrades, uprates, and license extensions for existing nuclear facilities; coal-to-gas conversions; and grid enhancements.
The aggregate amount of advances under the Alabama Power Credit Facility may not exceed approximately $4.1 billion (Alabama Power Maximum Facility Amount). The aggregate amount of advances under the Georgia Power Credit Facility may not exceed approximately $22.4 billion (Georgia Power Maximum Facility Amount and, together with the Alabama Power Maximum Facility Amount, the Maximum Facility Amounts). Each Borrower may request advances under its applicable Credit Facility during an availability period (with respect to each Borrower, the "availability period") that will continue until the earliest of (i) September 15, 2033, (ii) the date total advances reach the applicable Maximum Facility Amount, or (iii) the termination of the obligation to fund further advances following an event of default under the applicable Loan Guarantee Agreement. In addition, the FFB's obligation to fund advances to Alabama Power will terminate if Alabama Power has failed to request an initial advance by February 20, 2031.
In March 2026, Georgia Power received initial advances under the Georgia Power Credit Facility in an amount of approximately $1.0 billion at an interest rate of 5.041% through the final maturity date of December 10, 2055.
Future advances under each of the Credit Facilities are subject to confirmation of investment grade credit ratings and satisfaction of customary conditions, as well as certification of compliance with the requirements of Title XVII, including accuracy of project-related representation and warranties, delivery of updated project-related information, and evidence of compliance with the prevailing wage requirements of the Davis-Bacon Act of 1931, as amended (DOE Program Requirements), compliance with the Cargo Preference Act of 1954, and certification from the DOE's consulting engineer that proceeds of the advances are used to reimburse for eligible project costs.
All borrowings under each of the Credit Facilities will be full recourse, senior unsecured obligations of the respective Borrower. Alabama Power is not a party to, and has no obligations with respect to, the Georgia Power Credit Facility. Georgia Power is not a party to, and has no obligations with respect to, the Alabama Power Credit Facility.
The final scheduled maturity date for all borrowings under each Credit Facility is December 10, 2055. Each advance will bear interest at a rate equal to the applicable U.S. Treasury rate plus a spread of 0.375%, which rate will be determined at the time of the advance. Principal payments for the Alabama Power Credit Facility are payable in three equal annual installments, beginning on December 10, 2053. Principal payments for the Georgia Power Credit Facility are payable in seven equal annual installments, beginning on December 10, 2049.
Under each of the Loan Guarantee Agreements, the DOE agreed to provide guarantees with respect to the obligations of Alabama Power and Georgia Power under the Alabama Power FFB Credit Facility Documents and Georgia Power FFB Credit Facility Documents, respectively. Under their respective Loan Guarantee Agreements, Alabama Power and Georgia Power are obligated to reimburse the DOE for any amounts the DOE is required to pay with respect to such guarantees. Alabama Power's and Georgia Power's reimbursement obligations to the DOE are full recourse, senior unsecured obligations of the respective Borrower.
Under each Loan Guarantee Agreement, the applicable Borrower is subject to customary affirmative and negative covenants and events of default. In addition, Alabama Power and Georgia Power are subject to project-related reporting requirements and other project-specific covenants and events of default.
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Under each Loan Guarantee Agreement, the applicable Borrower will be required to prepay certain amounts outstanding under the applicable Credit Facility if (i) the applicable Borrower takes any action that causes an Eligible Project to cease to be an Eligible Project, (ii) certain "termination events" (as defined in the applicable Loan Guarantee Agreement) occur with respect to any Eligible Project of the applicable Borrower, (iii) eligible project costs recoverable in customer rates of the applicable Borrower are less than 95% of total advances made to the applicable Borrower under the applicable Credit Facility, with such amount tested on the third anniversary of the termination of the applicable availability period, or (iv) the applicable Borrower receives advances for certain preliminary costs and fails to satisfy the DOE Program Requirements. Any mandatory prepayment will be made in quarterly installments and, depending on the size of the required mandatory prepayment, will be payable over a period of one to three years (in the case of Alabama Power) or one to five years (in the case of Georgia Power). Any such mandatory prepayment will be at a prepayment price equal to 100% of the principal amount to be prepaid, plus accrued and unpaid interest to the date of prepayment.
In addition, if a "change of control" (as defined in the applicable Loan Guarantee Agreement) occurs with respect to the applicable Borrower, such Borrower will be required to offer to prepay all outstanding advances under its Credit Facility. Any such prepayment will be made with a make-whole premium or discount, as applicable.
Each Borrower will be permitted to voluntarily prepay all or a portion of any outstanding advances. Any such prepayment will be made with a make-whole premium or discount, as applicable.
Equity Distribution Agreement
See Note 8 to the financial statements under "Equity Distribution Agreement" in Item 8 of the Form 10-K for additional information.
In June 2026, Southern Company established a new at-the-market program and entered into an equity distribution agreement pursuant to which it may sell, from time to time, up to an aggregate of 50 million shares of its common stock, including through initially priced forward sale contracts and collared forward sale contracts (2026 ATM Program). In connection with the establishment of the 2026 ATM Program, Southern Company terminated further sales under its prior at-the-market program established in 2024 (2024 ATM Program).
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The table below reflects shares of Southern Company common stock sold and settled under separate initially priced forward sale contracts with forward purchasers during the six months ended June 30, 2026.
Shares Sold Initial Forward Price per Share To be Settled On or Before Forward Price Per Share Settled Shares Issued to Settle Settlement Date
Sold during 2025 (2024 ATM Program)
3,255,866 $89.4692 December 31, 2026 $89.2443 3,255,866 March 2, 2026
2,314,487 $92.7805 June 30, 2027 $92.8723 2,314,487 March 2, 2026
3,850,000 $90.6617 December 31, 2026 $90.2362 3,850,000 June 1, 2026
2,470,306 $94.5394 June 30, 2027 $93.8913 2,470,306 June 1, 2026
1,590,200 $93.4524 June 30, 2027 $93.4038 1,590,200 June 1, 2026
4,000,000 $90.8141 June 30, 2027 $90.6358 4,000,000 June 12, 2026
2,876,034 $92.2437 June 30, 2027 $91.9664 2,876,034 June 12, 2026
3,015,668 $93.4521 June 30, 2027 $93.1290 3,015,668 June 12, 2026
3,130,641(a) $88.2823 December 31, 2026 $88.0620 1,070,641 June 16, 2026
2,346,903 $91.1610 June 30, 2027 $90.9425 2,346,903 June 16, 2026
911,448 $94.2411 June 30, 2027 $93.9331 911,448 June 16, 2026
Sold during 2026 (2024 ATM Program)
1,467,305 $96.3883 March 31, 2028 N/A N/A N/A
1,896,549 $97.5815 March 31, 2028 N/A N/A N/A
1,903,317 $95.5086 March 31, 2028 N/A N/A N/A
Sold during 2026 (2026 ATM Program)
1,713,535 $93.2987 June 30, 2028 N/A N/A N/A
1,909,112 $92.4821 June 30, 2028 N/A N/A N/A
1,994,083 $95.1457 June 30, 2028 N/A N/A N/A
600,094(b) $95.9974 June 30, 2028 N/A N/A N/A
(a)The total number of shares sold under this forward sale contract is 3,130,641, of which 1,070,641 shares were settled during the six months ended June 30, 2026. The other 2,060,000 shares were settled in December 2025.
(b)The total number of shares sold under this forward sale contract is 1,940,548, of which the remaining 1,340,454 shares were sold subsequent to June 30, 2026. The initial forward price was determined after the completion of sales by the forward seller in July 2026.
As of June 30, 2026, Southern Company had entered into separate forward sale contracts with forward purchasers for a total of 49,885,779 shares of common stock under the 2024 ATM Program, all of which had been sold by the forward sellers, and 7,557,278 shares of common stock under the 2026 ATM Program, of which 6,216,824 shares had been sold by the forward sellers. Of these shares, 27,701,553 were settled during the six months ended June 30, 2026, all under the 2024 ATM Program, in the form of shares at the initial forward price adjusted for interest earned and dividends paid from the forward sale date to the settlement date. The net proceeds from the shares settled during the six months ended June 30, 2026 were approximately $2.5 billion.
As of June 30, 2026, the total number of shares sold remaining under the forward sale contracts subject to settlement at a future date is 11,483,995. Each initial forward price is subject to adjustment under certain circumstances as specified in the respective forward sales contracts. Southern Company may settle each of the forward transactions in shares, cash, or net shares.
Earnings per Share
For Southern Company, the difference in computing basic and diluted EPS is attributable to awards outstanding under stock-based compensation plans, forward sale contracts pursuant to the equity distribution agreement, convertible senior notes, and equity units. EPS dilution resulting from stock-based compensation plans, forward sale contracts, and the equity units is determined using the treasury stock method. EPS dilution resulting from the convertible senior notes is determined using the net share settlement method. See "Equity Distribution Agreement"
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herein and Note 8 to the financial statements under "Convertible Senior Notes," "Equity Distribution Agreement," and "Equity Units" and Note 12 to the financial statements in Item 8 of the Form 10-K for additional information. Shares used to compute diluted EPS were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
As reported shares 1,137 1,101 1,130 1,100
Effect of stock-based compensation 3 6 3 6
Effect of convertible senior notes — 1 — 1
Effect of forward sale contracts 1 — 1 —
Diluted shares 1,141 1,108 1,134 1,107
For all periods presented, an immaterial number of stock-based compensation awards was excluded from the diluted EPS calculation because the awards were anti-dilutive.
Georgia Power Lease Modification
See Note 9 to the financial statements in Item 8 of the Form 10-K for information on Georgia Power's leases. In June 2026, Georgia Power recognized a lease modification related to an existing affiliate PPA with Southern Power which converted from an operating lease to a finance lease upon its approval by the FERC. As a result, Georgia Power removed from its balance sheet operating lease right-of-use assets, net of amortization of $179 million and lease obligations of $197 million maturing through 2030 and recorded finance lease right-of-use assets of $1.3 billion and lease obligations of $1.3 billion maturing through 2045. See Note (B) under "Georgia Power – Integrated Resource Plans – Certification Requests" for additional information.
(G) INCOME TAXES
See Note 10 to the financial statements in Item 8 of the Form 10-K for additional tax information.
Cash Paid for Income Taxes
Alabama Power, Georgia Power, and Southern Power have entered into transferability agreements with non-affiliated parties to sell ITCs and PTCs at a discount to the generated credit value in 2024, 2025, and 2026. The discount is recorded as a reduction in tax credits recognized in the financial statements and does not have a material impact on results of operations. During the first six months of 2026, Alabama Power, Georgia Power, and Southern Power received cash of $39 million, $91 million, and $49 million, respectively, from credits transferred. The Southern Company system continues to explore the ability to efficiently monetize its tax credits through third-party transfer agreements.
During the first six months of 2026, pursuant to certain joint ownership agreements, Georgia Power paid $83 million to the other Vogtle Owners for advanced nuclear PTCs for Plant Vogtle Units 3 and 4. The gain was recognized as an income tax benefit and was immaterial.
Effective Tax Rate
Southern Company's effective tax rate is typically lower than the statutory rate due to employee stock plans' dividend deduction, non-taxable AFUDC equity at the traditional electric operating companies, flowback of excess deferred income taxes at the regulated utilities, and federal income tax benefits from ITCs and PTCs.
Details of significant changes in the effective tax rate for the applicable Registrants are provided herein.
Southern Company
Southern Company's effective tax rate was 14.1% for the six months ended June 30, 2026 compared to 21.1% for the corresponding period in 2025. The effective tax rate decrease was primarily due to a decrease in charges to a
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valuation allowance on certain state tax credit carryforwards at Georgia Power, an increase in federal PTCs at Southern Power, and an increase in amortization of federal PTCs at Georgia Power, partially offset by a decrease in the flowback of excess state deferred income taxes at Georgia Power.
Georgia Power
Georgia Power's effective tax rate was 14.3% for the six months ended June 30, 2026 compared to 21.7% for the corresponding period in 2025. The effective tax rate decrease was primarily due to a decrease in charges to a valuation allowance on certain state tax credit carryforwards and an increase in amortization of federal PTCs and ITCs, partially offset by a decrease in the flowback of excess state deferred income taxes.
Southern Power
Southern Power's effective tax benefit rate was (85.1)% for the six months ended June 30, 2026 compared to (7.0)% for the corresponding period in 2025. The effective tax benefit rate increase was primarily due to an increase in federal PTCs resulting from Southern Power's purchase of the noncontrolling membership interests in the SP Wind tax equity partnership, as well as a change in pre-tax earnings attributable to Southern Power, including the impact of accelerated depreciation related to wind repowering projects. See Note (K) under "Southern Power – Wind Repowering Projects" and Notes 5 and 15 to the financial statements under "Depreciation and Amortization – Southern Power" and "Southern Power – Purchase of Renewable Facility Interests," respectively, in Item 8 of the Form 10-K for additional information.
Southern Company Gas
Southern Company Gas' effective tax rate was 23.5% for the six months ended June 30, 2026 compared to 23.7% for the corresponding period in 2025. The effective tax rate decrease was primarily due to an increase in tax benefits related to certain state tax filing positions, offset by a decrease in the flowback of excess state deferred income taxes.
(H) RETIREMENT BENEFITS
The Southern Company system has a qualified defined benefit, trusteed, pension plan covering substantially all employees, with the exception of employees at PowerSecure. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2026. The Southern Company system also provides certain non-qualified defined benefits for a select group of management and highly compensated employees, which are funded on a cash basis. In addition, the Southern Company system provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional electric operating companies fund other postretirement trusts to the extent required by their respective regulatory commissions.
See Note 11 to the financial statements in Item 8 of the Form 10-K for additional information.
On each Registrant's condensed statements of income, the service cost component of net periodic benefit costs is included in other operations and maintenance expenses and all other components of net periodic benefit costs are included in other income (expense), net. Components of the net periodic benefit costs for the three and six months ended June 30, 2026 and 2025 are presented in the following tables.
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Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Three Months Ended June 30, 2026
Pension Plans
Service cost $ 69 $ 16 $ 16 $ 3 $ 1 $ 7
Interest cost 161 37 47 8 3 11
Expected return on plan assets (322) (78) (100) (14) (4) (22)
Amortization:
Prior service costs — — 1 — — (1)
Net (gain) loss 19 5 7 — (1) 1
Net periodic pension income $ (73) $ (20) $ (29) $ (3) $ (1) $ (4)
Postretirement Benefits
Service cost $ 3 $ 1 $ 1 $ — $ — $ —
Interest cost 16 4 6 — — 2
Expected return on plan assets (22) (8) (8) 1 — (2)
Amortization:
Net gain (2) (1) — — — (2)
Net periodic postretirement benefit cost (income) $ (5) $ (4) $ (1) $ 1 $ — $ (2)
Six Months Ended June 30, 2026
Pension Plans
Service cost $ 138 $ 31 $ 33 $ 6 $ 3 $ 14
Interest cost 323 75 94 15 5 22
Expected return on plan assets (644) (157) (199) (29) (8) (43)
Amortization:
Prior service costs — — 1 — — (1)
Regulatory asset — — — — — 3
Net (gain) loss 37 10 13 1 (1) 1
Net periodic pension income $ (146) $ (41) $ (58) $ (7) $ (1) $ (4)
Postretirement Benefits
Service cost $ 6 $ 2 $ 2 $ — $ — $ —
Interest cost 32 8 12 1 — 3
Expected return on plan assets (45) (17) (16) — — (4)
Amortization:
Prior service costs 1 — — — — —
Net gain (4) (1) — — — (4)
Net periodic postretirement benefit cost (income) $ (10) $ (8) $ (2) $ 1 $ — $ (5)
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Southern Company Alabama Power Georgia Power Mississippi Power Southern Power Southern Company Gas
(in millions)
Three Months Ended June 30, 2025
Pension Plans
Service cost $ 66 $ 15 $ 15 $ 2 $ 2 $ 7
Interest cost 166 38 49 8 3 11
Expected return on plan assets (320) (78) (99) (14) (4) (22)
Amortization:
Prior service costs — — 1 — — (1)
Regulatory asset — — — — — 4
Net (gain) loss 10 4 3 — (2) —
Net periodic pension income $ (78) $ (21) $ (31) $ (4) $ (1) $ (1)
Postretirement Benefits
Service cost $ 3 $ 1 $ 1 $ — $ — $ —
Interest cost 18 4 7 — — 2
Expected return on plan assets (22) (9) (8) — — (2)
Amortization:
Regulatory asset — — — — — 2
Net (gain) loss (4) — (2) 1 — (2)
Net periodic postretirement benefit cost (income) $ (5) $ (4) $ (2) $ 1 $ — $ —
Six Months Ended June 30, 2025
Pension Plans
Service cost $ 132 $ 30 $ 31 $ 5 $ 3 $ 13
Interest cost 332 77 98 15 5 22
Expected return on plan assets (640) (156) (198) (29) (8) (43)
Amortization:
Prior service costs — — 1 — — (1)
Regulatory asset — — — — — 8
Net (gain) loss 19 6 7 1 (1) —
Net periodic pension income $ (157) $ (43) $ (61) $ (8) $ (1) $ (1)
Postretirement Benefits
Service cost $ 6 $ 2 $ 2 $ — $ — $ —
Interest cost 35 8 13 1 — 4
Expected return on plan assets (45) (18) (16) — — (4)
Amortization:
Prior service costs 1 — — — — —
Regulatory asset — — — — — 3
Net gain (7) — (2) — — (4)
Net periodic postretirement benefit cost (income) $ (10) $ (8) $ (3) $ 1 $ — $ (1)
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(I) FAIR VALUE MEASUREMENTS
At June 30, 2026, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:
Fair Value Measurements Using
At June 30, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value as a Practical Expedient (NAV) Total
(in millions)
Southern Company
Assets:
Energy-related derivatives(a) $ 8 $ 61 $ — $ — $ 69
Interest rate derivatives — 5 — — 5
Investments in trusts:(b)
Domestic equity 1,030 293 — — 1,323
Foreign equity 199 256 — — 455
U.S. Treasury and government agency securities — 410 — — 410
Municipal bonds — 31 — — 31
Pooled funds – fixed income — 4 — — 4
Corporate bonds — 533 — — 533
Mortgage- and asset-backed securities — 110 — — 110
Private equity — — — 202 202
Cash and cash equivalents 1 — — — 1
Other 33 4 — 9 46
Investments, available-for-sale:
U.S. Treasury and government agency securities 1 12 — — 13
Municipal bonds — 2 — — 2
Corporate bonds — 4 — — 4
Mortgage- and asset-backed securities — 3 — — 3
Cash equivalents 1,768 18 — — 1,786
Other investments 10 35 8 — 53
Other — — 10 — 10
Total $ 3,050 $ 1,781 $ 18 $ 211 $ 5,060
Liabilities:
Energy-related derivatives(a) $ 11 $ 155 $ — $ — $ 166
Interest rate derivatives — 205 — — 205
Foreign currency derivatives — 63 — — 63
Contingent consideration — — 12 — 12
Other — 13 11 — 24
Total $ 11 $ 436 $ 23 $ — $ 470
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Fair Value Measurements Using
At June 30, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value as a Practical Expedient (NAV) Total
(in millions)
Alabama Power
Assets:
Energy-related derivatives $ — $ 27 $ — $ — $ 27
Nuclear decommissioning trusts:(b)
Domestic equity 569 282 — — 851
Foreign equity 199 — — — 199
U.S. Treasury and government agency securities — 16 — — 16
Municipal bonds — 1 — — 1
Corporate bonds — 319 — — 319
Mortgage- and asset-backed securities — 28 — — 28
Private equity — — — 202 202
Other 14 2 — 9 25
Cash equivalents 40 18 — — 58
Other investments — 35 — — 35
Total $ 822 $ 728 $ — $ 211 $ 1,761
Liabilities:
Energy-related derivatives $ — $ 58 $ — $ — $ 58
Georgia Power
Assets:
Energy-related derivatives $ — $ 14 $ — $ — $ 14
Nuclear decommissioning trusts:(b)
Domestic equity 461 1 — — 462
Foreign equity — 254 — — 254
U.S. Treasury and government agency securities — 394 — — 394
Municipal bonds — 30 — — 30
Corporate bonds — 214 — — 214
Mortgage- and asset-backed securities — 82 — — 82
Other 19 2 — — 21
Cash equivalents 11 — — — 11
Total $ 491 $ 991 $ — $ — $ 1,482
Liabilities:
Energy-related derivatives $ — $ 48 $ — $ — $ 48
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Fair Value Measurements Using
At June 30, 2026 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Net Asset Value as a Practical Expedient (NAV) Total
(in millions)
Mississippi Power
Assets:
Energy-related derivatives $ — $ 14 $ — $ — $ 14
Cash equivalents 1 — — — 1
Total $ 1 $ 14 $ — $ — $ 15
Liabilities:
Energy-related derivatives $ — $ 40 $ — $ — $ 40
Southern Power
Assets:
Energy-related derivatives $ — $ 3 $ — $ — $ 3
Cash equivalents 162 — — — 162
Other — — 10 — 10
Total $ 162 $ 3 $ 10 $ — $ 175
Liabilities:
Energy-related derivatives $ — $ 4 $ — $ — $ 4
Contingent consideration — — 12 — 12
Other — 13 11 — 24
Total $ — $ 17 $ 23 $ — $ 40
Southern Company Gas
Assets:
Energy-related derivatives(a) $ 8 $ 3 $ — $ — $ 11
Non-qualified deferred compensation trusts:
Domestic equity — 10 — — 10
Foreign equity — 2 — — 2
Pooled funds – fixed income — 4 — — 4
Cash and cash equivalents 1 — — — 1
Cash equivalents 200 — — — 200
Total $ 209 $ 19 $ — $ — $ 228
Liabilities:
Energy-related derivatives(a) $ 11 $ 5 $ — $ — $ 16
Interest rate derivatives — 62 — — 62
Total $ 11 $ 67 $ — $ — $ 78
(a)Excludes cash collateral of $18 million.
(b)Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements under "Nuclear Decommissioning" in Item 8 of the Form 10-K for additional information.
Southern Company, Alabama Power, and Georgia Power continue to elect the option to fair value investment securities held in the nuclear decommissioning trust funds. The fair value of the funds, including reinvested interest and dividends and excluding the funds' expenses, increased (decreased) by the amounts shown in the table below for
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the three and six months ended June 30, 2026 and 2025. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.
Three Months Ended June 30, Six Months Ended June 30,
Fair value increases (decreases) 2026 2025 2026 2025
(in millions)
Southern Company $ 249 $ 165 $ 205 $ 159
Alabama Power 156 99 126 86
Georgia Power 93 66 79 73
Valuation Methodologies
The energy-related derivatives primarily consist of exchange-traded and over-the-counter financial products for natural gas and physical power products, including, from time to time, basis swaps. These are standard products used within the energy industry and are valued using the market approach. The inputs used are mainly from observable market sources, such as forward natural gas prices, power prices, implied volatility, and overnight index swap interest rates. Interest rate derivatives are also standard over-the-counter products that are valued using observable market data and assumptions commonly used by market participants. The fair value of interest rate derivatives reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future interest rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and occasionally, implied volatility of interest rate options. The fair value of cross-currency swaps reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future foreign currency exchange rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and discount rates. The interest rate derivatives and cross-currency swaps are categorized as Level 2 under Fair Value Measurements as these inputs are based on observable data and valuations of similar instruments. See Note (J) for additional information on how these derivatives are used.
For fair value measurements of the investments within the nuclear decommissioning trusts and the non-qualified deferred compensation trusts, external pricing vendors are designated for each asset class with each security specifically assigned a primary pricing source. For investments held within commingled funds, fair value is determined at the end of each business day through the net asset value, which is established by obtaining the underlying securities' individual prices from the primary pricing source. A market price secured from the primary source vendor is then evaluated by management in its valuation of the assets within the trusts. As a general approach, fixed income market pricing vendors gather market data (including indices and market research reports) and integrate relative credit information, observed market movements, and sector news into proprietary pricing models, pricing systems, and mathematical tools. Dealer quotes and other market information, including live trading levels and pricing analysts' judgments, are also obtained when available.
The NRC requires licensees of commissioned nuclear power reactors to establish a plan for providing reasonable assurance of funds for future decommissioning. See Note 6 to the financial statements under "Nuclear Decommissioning" in Item 8 of the Form 10-K for additional information.
Southern Company's investments, available for sale relate to a wholly-owned subsidiary that insures various risk exposures of Southern Company and its subsidiaries. Corporate and municipal bonds, government agency securities, and commercial paper are valued using pricing models maximizing the use of observable inputs for similar securities, including basing value on yields currently available on comparable securities of issues with similar credit ratings. Mortgage- and asset-backed securities are valued through an analysis of the underlying assets and a review of the documentation, including financials, the manager's valuation methodology in valuing their underlying assets, the types of assets and risks involved, and the investor's exit and termination parameters.
Southern Power has contingent payment obligations related to two of its acquisitions whereby it is primarily obligated to make generation-based payments to the seller, commencing at the commercial operation of each facility
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and continuing through 2026 and 2036, respectively. The obligations are primarily categorized as Level 3 under Fair Value Measurements as the fair value is determined using significant unobservable inputs for the forecasted facility's generation in MW-hours, as well as other inputs such as a fixed dollar amount per MW-hour, and a discount rate. The fair value of the obligations reflects the net present value of expected payments and any periodic change arising from forecasted generation is expected to be immaterial.
Southern Power also has payment obligations through 2040 whereby it must reimburse the transmission owners for interconnection facilities and network upgrades constructed to support connection of a Southern Power generating facility to the transmission system. The obligations are categorized as Level 2 under Fair Value Measurements as the fair value is determined using observable inputs for the contracted amounts and reimbursement period, as well as a discount rate. The fair value of the obligations reflects the net present value of expected payments.
"Other investments" primarily includes investments traded in the open market that have maturities greater than 90 days, which are categorized as Level 2 under Fair Value Measurements and are comprised of corporate bonds, bank certificates of deposit, treasury bonds, and/or agency bonds.
At June 30, 2026, the fair value measurements of private market investments held in Alabama Power's nuclear decommissioning trusts that are calculated at net asset value per share (or its equivalent) as a practical expedient totaled $211 million and unfunded commitments related to the private market investments totaled $94 million. Private market investments include high-quality private equity funds across several market sectors, funds that invest in real estate assets, and private credit funds. Private market funds do not have redemption rights. Distributions from these funds will be received as the underlying investments in the funds are liquidated.
At June 30, 2026, other financial instruments for which the carrying amount did not equal fair value were as follows:
Southern Company(*) Alabama Power Georgia Power Mississippi Power Southern Power SouthernCompany Gas(*)
(in billions)
Long-term debt, including securities due within one year:
Carrying amount $ 72.7 $ 12.0 $ 22.3 $ 1.8 $ 3.0 $ 9.3
Fair value 68.0 10.7 20.7 1.7 2.9 8.4
(*)The carrying amount of Southern Company Gas' long-term debt includes fair value adjustments from the effective date of the 2016 merger with Southern Company. Southern Company Gas amortizes the fair value adjustments over the remaining lives of the respective bonds, the latest being through 2043.
The fair values are determined using Level 2 measurements and are based on quoted market prices for the same or similar issues or on the current rates available to the Registrants.
(J) DERIVATIVES
The Registrants are exposed to market risks, including commodity price risk, interest rate risk, weather risk, and occasionally foreign currency exchange rate risk. To manage the volatility attributable to these exposures, each company nets its exposures, where possible, to take advantage of natural offsets and enters into various derivative transactions for the remaining exposures pursuant to each company's policies in areas such as counterparty exposure and risk management practices. Each company's policy is that derivatives are to be used primarily for hedging purposes and mandates strict adherence to all applicable risk management policies. Derivative positions are monitored using techniques including, but not limited to, market valuation, value at risk, stress testing, and sensitivity analysis. Derivative instruments are recognized at fair value in the balance sheets as either assets or liabilities and are presented on a net basis. See Note (I) for additional fair value information. In the statements of cash flows, any cash impacts of settled energy-related and interest rate derivatives are recorded as operating activities. Any cash impacts of settled foreign currency derivatives are classified as operating or financing activities to correspond with the classification of the hedged interest or principal, respectively. See Note 1 to the financial statements under "Financial Instruments" in Item 8 of the Form 10-K for additional information.
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Energy-Related Derivatives
The Subsidiary Registrants enter into energy-related derivatives to hedge exposures to electricity, natural gas, and other fuel price changes. However, due to cost-based rate regulations and other various cost recovery mechanisms, the traditional electric operating companies and the natural gas distribution utilities have limited exposure to market volatility in energy-related commodity prices. Each of the traditional electric operating companies and certain of the natural gas distribution utilities manage fuel-hedging programs, implemented per the guidelines of their respective state PSCs or other applicable state regulatory agencies, through the use of financial derivative contracts, which are expected to continue to mitigate price volatility. The traditional electric operating companies (with respect to wholesale generating capacity) and Southern Power have limited exposure to market volatility in energy-related commodity prices because their long-term sales contracts shift substantially all fuel cost responsibility to the purchaser. However, the traditional electric operating companies and Southern Power may be exposed to market volatility in energy-related commodity prices to the extent any uncontracted capacity is used to sell electricity. Southern Company Gas retains exposure to price changes that can, in a volatile energy market, be material and can adversely affect its results of operations.
Southern Company Gas also enters into weather derivative contracts as economic hedges in the event of warmer-than-normal weather. Exchange-traded options are carried at fair value, with changes reflected in natural gas revenues. Non-exchange-traded options are accounted for using the intrinsic value method. Changes in the intrinsic value for non-exchange-traded contracts are reflected in natural gas revenues.
Energy-related derivative contracts are accounted for under one of three methods:
•Regulatory Hedges – Energy-related derivative contracts designated as regulatory hedges relate primarily to the traditional electric operating companies' and the natural gas distribution utilities' fuel-hedging programs, where gains and losses are initially recorded as regulatory liabilities and assets, respectively, and then are included in fuel expense as the underlying fuel is used in operations and ultimately recovered through an approved cost recovery mechanism.
•Cash Flow Hedges – Gains and losses on energy-related derivatives designated as cash flow hedges (which are mainly used to hedge anticipated purchases and sales) are initially deferred in accumulated OCI before being recognized in the statements of income in the same period and in the same income statement line item as the earnings effect of the hedged transactions.
•Not Designated – Gains and losses on energy-related derivative contracts that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.
Some energy-related derivative contracts require physical delivery as opposed to financial settlement, and this type of derivative is both common and prevalent within the electric and natural gas industries. When an energy-related derivative contract is settled physically, any cumulative unrealized gain or loss is reversed and the contract price is recognized in the respective line item representing the actual price of the underlying goods being delivered.
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At June 30, 2026, the net volume of energy-related derivative contracts for natural gas positions, together with the longest hedge date over which the respective entity is hedging its exposure to the variability in future cash flows for forecasted transactions and the longest non-hedge date for derivatives not designated as hedges, were as follows:
Net Purchased mmBtu Longest Hedge Date Longest Non-Hedge Date
(in millions)
Southern Company(*) 469 2030 2029
Alabama Power 155 2029 2026
Georgia Power 117 2028 2026
Mississippi Power 114 2030 2026
Southern Power 8 2030 2026
Southern Company Gas(*) 75 2028 2029
(*)Southern Company Gas' derivative instruments include both long and short natural gas positions. A long position is a contract to purchase natural gas and a short position is a contract to sell natural gas. Southern Company Gas' volume represents the net of 85 million mmBtu long natural gas positions and 10 million mmBtu short natural gas positions at June 30, 2026, which is also included in Southern Company's total volume.
In addition to the volumes discussed above, the traditional electric operating companies and Southern Power enter into physical natural gas supply contracts that provide the option to sell back excess natural gas due to operational constraints. The maximum expected volume of natural gas subject to such a feature is 15 million mmBtu for Southern Company, which includes 4 million mmBtu for Alabama Power, 6 million mmBtu for Georgia Power, 2 million mmBtu for Mississippi Power, and 3 million mmBtu for Southern Power.
For cash flow hedges of energy-related derivatives, the estimated pre-tax gains (losses) expected to be reclassified from accumulated OCI to earnings for the 12-month period ending June 30, 2027 are immaterial for Southern Company, Alabama Power, Mississippi Power, Southern Power, and Southern Company Gas.
Interest Rate Derivatives
Southern Company and certain subsidiaries may enter into interest rate derivatives to hedge exposure to changes in interest rates. Derivatives related to existing variable rate securities or forecasted transactions are accounted for as cash flow hedges where the derivatives' fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time and presented on the same income statement line item as the earnings effect of the hedged transactions. Derivatives related to existing fixed rate securities are accounted for as fair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are both recorded directly to earnings on the same income statement line item. Fair value gains or losses on derivatives that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.
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At June 30, 2026, the following interest rate derivatives were outstanding:
Notional Amount Weighted Average Interest Rate Paid Interest Rate Received Hedge Maturity Date Fair ValueGain (Loss) atJune 30, 2026
(in millions) (in millions)
Fair Value Hedges of Existing Debt
Southern Company parent $ 400 1-day SOFR + 0.80% 1.75% March 2028 $ (23)
Southern Company parent 1,000 1-day SOFR + 2.48% 3.70% April 2030 (103)
Southern Company parent 565 1-day SOFR + 1.56% 6.50% March 2045 (12)
Southern Company Gas 500 1-day SOFR + 0.49% 1.75% January 2031 (62)
Southern Company $ 2,465 $ (200)
For cash flow hedges of interest rate derivatives, the estimated pre-tax gains (losses) expected to be reclassified from accumulated OCI to interest expense for the 12-month period ending June 30, 2027 are immaterial for Southern Company, the traditional electric operating companies, and Southern Company Gas. Deferred gains and losses related to interest rate derivatives are expected to be amortized into earnings through 2054 for Southern Company, Georgia Power, and Mississippi Power, 2052 for Alabama Power, and 2046 for Southern Company Gas.
Foreign Currency Derivatives
Southern Company and certain subsidiaries may enter into foreign currency derivatives to hedge exposure to changes in foreign currency exchange rates, such as that arising from the issuance of debt denominated in a currency other than U.S. dollars. Derivatives related to forecasted transactions are accounted for as cash flow hedges where the derivatives' fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time and on the same income statement line as the earnings effect of the hedged transactions, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Derivatives related to existing fixed rate securities are accounted for as fair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are both recorded directly to earnings on the same income statement line item, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Southern Company has elected to exclude the cross-currency basis spread from the assessment of effectiveness in the fair value hedges of its foreign currency risk and record any difference between the change in the fair value of the excluded components and the amounts recognized in earnings as a component of OCI.
At June 30, 2026, the following foreign currency derivatives were outstanding:
Pay Notional Pay Rate Receive Notional Receive Rate Hedge Maturity Date Fair ValueGain (Loss) atJune 30, 2026
(in millions) (in millions) (in millions)
Fair Value Hedges of Existing Debt
Southern Company parent $ 1,476 3.39% € 1,250 1.88% September 2027 $ (63)
Derivative Financial Statement Presentation and Amounts
The Registrants enter into derivative contracts that may contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Southern Company and certain subsidiaries also utilize master netting agreements to mitigate exposure to counterparty credit risk. The fair value amounts of derivative assets and liabilities on the balance sheets are presented net to the extent that there are netting arrangements or similar agreements with the counterparties.
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The fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected as either assets or liabilities in the balance sheets (included in "Other" or shown separately as "Risk Management Activities") as follows:
At June 30, 2026 At December 31, 2025
Derivative Category and Balance Sheet Location Assets Liabilities Assets Liabilities
(in millions)
Southern Company
Energy-related derivatives designated as hedging instruments for regulatory purposes
Current $ 28 $ 89 $ 24 $ 64
Non-current 30 60 31 35
Total derivatives designated as hedging instruments for regulatory purposes 58 149 55 99
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Current 3 12 1 6
Non-current 2 1 2 1
Interest rate derivatives:
Current 5 52 8 48
Non-current — 153 — 139
Foreign currency derivatives:
Current — 23 17 22
Non-current — 40 4 —
Total derivatives designated as hedging instruments in cash flow and fair value hedges 10 281 32 216
Energy-related derivatives not designated as hedging instruments
Current 6 4 6 6
Gross amounts recognized 74 434 93 321
Gross amounts offset(a) (39) (57) (21) (54)
Net amounts recognized in the Balance Sheets(b) $ 35 $ 377 $ 72 $ 267
Alabama Power
Energy-related derivatives designated as hedging instruments for regulatory purposes
Current $ 15 $ 31 $ 9 $ 18
Non-current 12 25 10 13
Total derivatives designated as hedging instruments for regulatory purposes 27 56 19 31
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Current — 2 — —
Gross amounts recognized 27 58 19 31
Gross amounts offset (16) (16) (13) (13)
Net amounts recognized in the Balance Sheets $ 11 $ 42 $ 6 $ 18
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(UNAUDITED)
At June 30, 2026 At December 31, 2025
Derivative Category and Balance Sheet Location Assets Liabilities Assets Liabilities
(in millions)
Georgia Power
Energy-related derivatives designated as hedging instruments for regulatory purposes
Current $ 5 $ 32 $ 7 $ 23
Non-current 7 16 10 10
Total derivatives designated as hedging instruments for regulatory purposes 12 48 17 33
Energy-related derivatives not designated as hedging instruments
Current 2 — 1 —
Gross amounts recognized 14 48 18 33
Gross amounts offset (11) (11) (14) (14)
Net amounts recognized in the Balance Sheets $ 3 $ 37 $ 4 $ 19
Mississippi Power
Energy-related derivatives designated as hedging instruments for regulatory purposes
Current $ 3 $ 21 $ 3 $ 15
Non-current 11 19 11 12
Total derivatives designated as hedging instruments for regulatory purposes 14 40 14 27
Gross amounts offset (13) (13) (13) (13)
Net amounts recognized in the Balance Sheets $ 1 $ 27 $ 1 $ 14
Southern Power
Derivatives designated as hedging instruments in cash flow hedges
Energy-related derivatives:
Current $ 1 $ 2 $ 1 $ 1
Non-current 2 1 2 —
Foreign currency derivatives:
Current — — 17 —
Total derivatives designated as hedging instruments in cash flow hedges 3 3 20 1
Energy-related derivatives not designated as hedging instruments
Current — 1 1 —
Gross amounts recognized 3 4 21 1
Gross amounts offset (1) (1) — —
Net amounts recognized in the Balance Sheets $ 2 $ 3 $ 21 $ 1
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At June 30, 2026 At December 31, 2025
Derivative Category and Balance Sheet Location Assets Liabilities Assets Liabilities
(in millions)
Southern Company Gas
Energy-related derivatives designated as hedging instruments for regulatory purposes
Current $ 5 $ 5 $ 5 $ 8
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Current 2 8 — 5
Non-current — — — 1
Interest rate derivatives:
Current — 13 — 13
Non-current — 49 — 46
Total derivatives designated as hedging instruments in cash flow and fair value hedges 2 70 — 65
Energy-related derivatives not designated as hedging instruments
Current 4 3 4 6
Gross amounts recognized 11 78 9 79
Gross amounts offset(a) 6 (12) 19 (14)
Net amounts recognized in the Balance Sheets(b) $ 17 $ 66 $ 28 $ 65
(a)Gross amounts offset includes cash collateral held on deposit in broker margin accounts of $18 million and $33 million at June 30, 2026 and December 31, 2025, respectively.
(b)Net amounts of derivative instruments outstanding exclude immaterial premium and intrinsic value associated with weather derivatives at June 30, 2026 and December 31, 2025.
At June 30, 2026 and December 31, 2025, the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred were as follows:
Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheets
Derivative Category and Balance Sheet Location Southern Company Alabama Power Georgia Power Mississippi Power Southern Company Gas
(in millions)
At June 30, 2026:
Energy-related derivatives:
Other regulatory assets, current $ (75) $ (26) $ (27) $ (18) $ (4)
Other regulatory assets, deferred (31) (13) (10) (8) —
Other regulatory liabilities, current 15 10 — — 5
Total energy-related derivative gains (losses) $ (91) $ (29) $ (37) $ (26) $ 1
At December 31, 2025:
Energy-related derivatives:
Other regulatory assets, current $ (48) $ (13) $ (17) $ (12) $ (6)
Other regulatory assets, deferred (8) (5) (1) (2) —
Other regulatory liabilities, current 7 4 1 — 2
Other regulatory liabilities, deferred 4 2 1 1 —
Total energy-related derivative gains (losses) $ (45) $ (12) $ (16) $ (13) $ (4)
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(UNAUDITED)
For the three and six months ended June 30, 2026 and 2025, the pre-tax effects of cash flow and fair value hedge accounting on accumulated OCI for the applicable Registrants were as follows:
Gain (Loss) From Derivatives Recognized in OCI Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Southern Company
Cash flow hedges:
Energy-related derivatives $ (8) $ (13) $ 1 $ 6
Interest rate derivatives — 9 — 5
Foreign currency derivatives (7) 47 (19) 67
Fair value hedges(*):
Foreign currency derivatives — 3 (1) (13)
Total $ (15) $ 46 $ (19) $ 65
Alabama Power
Cash flow hedges:
Energy-related derivatives $ (2) $ — $ (2) $ —
Georgia Power
Cash flow hedges:
Interest rate derivatives $ — $ 5 $ — $ 3
Southern Power
Cash flow hedges:
Energy-related derivatives $ (2) $ (1) $ — $ 2
Foreign currency derivatives (7) 47 (19) 67
Total $ (9) $ 46 $ (19) $ 69
Southern Company Gas
Cash flow hedges:
Energy-related derivatives $ (4) $ (12) $ 3 $ 4
Interest rate derivatives — 4 — 4
Total $ (4) $ (8) $ 3 $ 8
(*)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI.
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For the three and six months ended June 30, 2026 and 2025, the pre-tax effects of cash flow and fair value hedge accounting on income were as follows:
Gain (Loss)
Statements of Income Location Derivative Category Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Southern Company
Fuel Energy-related cash flow hedges $ (1) $ — $ 2 $ 1
Cost of natural gas Energy-related cash flow hedges (3) 1 7 —
Interest expense, net of amounts capitalized Interest rate cash flow hedges (2) (3) (5) (6)
Foreign currency cash flow hedges (2) (2) (5) (5)
Interest rate fair value hedges (41) 29 (21) 69
Other income (expense), net Foreign currency cash flow hedges (2) 45 (14) 67
Foreign currency fair value hedges (13) 115 (45) 155
Amount excluded from effectiveness testing recognized in earnings — (3) 1 13
Southern Power
Fuel Energy-related cash flow hedges $ (1) $ — $ 2 $ 1
Interest expense, net of amounts capitalized Foreign currency cash flow hedges (2) (2) (5) (5)
Other income (expense), net Foreign currency cash flow hedges (2) 45 (14) 67
Southern Company Gas
Cost of natural gas Energy-related cash flow hedges $ (3) $ 1 $ 7 $ —
Interest expense, net of amounts capitalized Interest rate fair value hedges (32) 3 (3) 21
At June 30, 2026 and December 31, 2025, the following amounts were recorded on the balance sheets related to cumulative basis adjustments for fair value hedges:
Carrying Amount of the Hedged Item Cumulative Amount of Fair Value Hedging Adjustment included in Carrying Amount of the Hedged Item
Balance Sheet Location of Hedged Items At June 30, 2026 At December 31, 2025 At June 30, 2026 At December 31, 2025
(in millions)
Southern Company
Long-term debt $ (3,687) $ (3,742) $ 169 $ 156
Southern Company Gas
Long-term debt $ (442) $ (446) $ 56 $ 51
Pre-tax gains (losses) on energy-related derivatives not designated as hedging instruments were $7 million and $(14) million for the three months ended June 30, 2026 and 2025, respectively, and $2 million and $(6) million for the six months ended June 30, 2026 and 2025, respectively, and reflected in cost of natural gas on the statements of income of Southern Company and Southern Company Gas.
Contingent Features
The Registrants do not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade. There are certain derivatives that could require collateral, but
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(UNAUDITED)
not accelerated payment, in the event of various credit rating changes of certain Southern Company subsidiaries. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. At June 30, 2026, the Registrants had no collateral posted with derivative counterparties to satisfy these arrangements.
For Southern Company, the fair value of foreign currency derivative liabilities and interest rate derivative liabilities with contingent features, and the maximum potential collateral requirements arising from the credit-risk-related contingent features at a rating below BBB- and/or Baa3, was $31 million at June 30, 2026. For the traditional electric operating companies and Southern Power, energy-related derivative liabilities with contingent features and the maximum potential collateral requirements arising from the credit-risk-related contingent features, at a rating below BBB- and/or Baa3, were immaterial at June 30, 2026. The maximum potential collateral requirements arising from the credit-risk-related contingent features for the traditional electric operating companies and Southern Power include certain agreements that could require collateral in the event that one or more Southern Company power pool participants has a credit rating change to below investment grade.
Alabama Power and Southern Power maintain accounts with certain regional transmission organizations to facilitate financial derivative transactions and they may be required to post collateral based on the value of the positions in these accounts and the associated margin requirements. At June 30, 2026, cash collateral posted in these accounts was immaterial for Alabama Power and Southern Power. Southern Company Gas maintains accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and the associated margin requirements, Southern Company Gas may be required to deposit cash into these accounts, which are netted with energy-related derivatives recognized in the balance sheets.
The Registrants are exposed to losses related to financial instruments in the event of counterparties' nonperformance. The Registrants generally enter into agreements and material transactions with counterparties that have investment grade credit ratings by Moody's, S&P, or Fitch or with counterparties who have posted collateral to cover potential credit exposure. The Registrants have also established risk management policies and controls to determine and monitor the creditworthiness of counterparties in order to mitigate their exposure to counterparty credit risk.
Southern Company Gas uses established credit policies to determine and monitor the creditworthiness of counterparties, including requirements to post collateral or other credit security, as well as the quality of pledged collateral. Collateral or credit security is most often in the form of cash or letters of credit from an investment-grade financial institution, but may also include cash or U.S. government securities held by a trustee. Prior to entering a physical transaction, Southern Company Gas assigns its counterparties an internal credit rating and credit limit based on the counterparties' Moody's, S&P, and Fitch ratings, commercially available credit reports, and audited financial statements. Southern Company Gas may require counterparties to pledge additional collateral when deemed necessary.
The Registrants do not anticipate a material adverse effect on their respective financial statements as a result of counterparty nonperformance.
(K) ACQUISITIONS AND DISPOSITIONS
See Note 15 to the financial statements in Item 8 of the Form 10-K for additional information.
Southern Power
Construction Projects
During the six months ended June 30, 2026, Southern Power completed construction of and placed in service the 200-MW first phase and continued construction of the 180-MW second phase and 132-MW third phase of the Millers Branch solar facility. At June 30, 2026, the total cost of construction incurred for the Millers Branch project
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(UNAUDITED)
was $718 million, of which $408 million remains in CWIP. The ultimate outcome of these matters cannot be determined at this time.
Project Facility Resource ApproximateNameplate Capacity(MW) Location Actual/Projected COD PPA Contract Period
Projects Under Construction at June 30, 2026
Millers Branch
Phase II Solar 180 Haskell County, TX Third quarter 2026 15 years
Phase III Solar 132 Haskell County, TX Fourth quarter 2026 15 years
Projects Completed During the Six Months Ended June 30, 2026
Millers Branch
Phase I Solar 200 Haskell County, TX February 2026 20 years
Wind Repowering Projects
During the six months ended June 30, 2026, Southern Power continued the development projects to repower the Kay, Grant, Grant Plains, Wake, and Bethel wind facilities. At June 30, 2026, the total cost of construction incurred related to the projects was $598 million, of which $409 million remains in CWIP. The repowered output of the facilities is contracted under new and amended PPAs. The ultimate outcome of these matters cannot be determined at this time.
Project Facility Resource Approximate NameplateCapacity(MW) Location Actual/Projected Completion Date
Projects Under Construction at June 30, 2026
Kay(a) Wind 200 Kay County, OK July 2026(b)
Grant Wind 152 Grant County, OK Fourth quarter 2026
Grant Plains Wind 147 Grant County, OK Fourth quarter 2026
Wake Wind 257 Crosby & Floyd Counties, TX Second quarter 2027
Bethel Wind 276 Castro County, TX Third quarter 2027
(a)The facility has a total capacity of 299 MWs, of which 200 MWs was projected to be repowered and is contracted under a PPA.
(b)During the first six months of 2026 and subsequent to June 30, 2026, Southern Power placed all 200 MWs of repowered capacity in service.
Natural Gas Turbine Upgrade Projects
In the first quarter 2026, Southern Power committed to projects to upgrade certain turbines at its existing Franklin and Wansley natural gas facilities, located in Lee County, Alabama and Heard County, Georgia, respectively. The upgrades are projected to add up to 400 MWs of incremental capacity, with commercial operations projected to begin between the second quarter 2029 and the fourth quarter 2030. At June 30, 2026, the total cost of construction incurred related to the projects was $82 million, which is included in CWIP. The ultimate outcome of these matters cannot be determined at this time.
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(UNAUDITED)
(L) SEGMENT AND RELATED INFORMATION
See Note 16 to the financial statements in Item 8 of the Form 10-K for additional information.
Southern Company
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. The traditional electric operating companies are vertically integrated utilities providing electric service in three Southeastern states. Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including battery energy storage projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through its natural gas distribution utilities and is involved in several other complementary businesses including gas pipeline investments and gas marketing services.
Southern Company's reportable business 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 other complementary products and services by Southern Company Gas. While the traditional electric operating companies represent three separate operating segments, they are vertically integrated utilities providing electric service to retail customers, as well as wholesale customers, in the Southeast and have been aggregated into one reportable segment. The "All Other" presentation includes the Southern Company parent entity, which does not allocate operating expenses to business segments, and operating segments below the quantitative threshold for separate disclosure. These operating segments include providing distributed energy and resilience solutions and deploying microgrids for commercial, industrial, governmental, and utility customers, as well as investments in telecommunications. Revenues from sales by Southern Power to the traditional electric operating companies were $92 million and $192 million for the three and six months ended June 30, 2026, respectively, and $114 million and $229 million for the three and six months ended June 30, 2025, respectively. All other inter-segment revenues were immaterial for all periods presented.
Southern Company's CODM utilizes segment net income, including variances to budget and forecasts, to assess performance and is not provided with segment expense information. To achieve the consolidated net income goal, Southern Company's CODM sets net income expectations for each operating segment, which is expected to monitor its expenses in order to achieve its assigned net income target. Therefore, Southern Company has no reportable significant segment expenses.
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Financial data for business segments for the three and six months ended June 30, 2026 and 2025 was as follows:
Electric Utilities
Traditional Electric Operating Companies Southern Power Eliminations Total Southern Company Gas Total Reportable Segments All Other Eliminations Consolidated
(in millions)
Three Months Ended June 30, 2026
Operating revenues $ 5,396 $ 535 $ (105) $ 5,826 $ 966 $ 6,792 $ 223 $ (38) $ 6,977
Other segment items(a) 2,501 329 (78) 2,752 554 3,306 193 (27) 3,472
Depreciation and amortization(b) 967 280 (15) 1,232 185 1,417 17 — 1,434
Earnings from equity method investments 12 — — 12 32 44 42 — 86
Interest expense 367 28 (12) 383 101 484 312 — 796
Income taxes (benefit) 304 (77) — 227 32 259 (72) — 187
Segment net income (loss)(b)(c) $ 1,269 $ (25) $ — $ 1,244 $ 126 $ 1,370 $ (185) $ (11) $ 1,174
Six Months Ended June 30, 2026
Operating revenues $ 10,878 $ 1,216 $ (246) $ 11,848 $ 3,157 $ 15,005 $ 441 $ (72) $ 15,374
Other segment items(a) 5,360 772 (219) 5,913 1,911 7,824 382 (68) 8,138
Depreciation and amortization(b) 1,908 558 (15) 2,451 369 2,820 34 — 2,854
Earnings from equity method investments 11 — — 11 78 89 47 — 136
Interest expense(d) 705 55 (12) 748 206 954 619 — 1,573
Income taxes (benefit) 534 (147) — 387 176 563 (149) — 414
Segment net income (loss)(b)(c)(d) $ 2,382 $ (22) $ — $ 2,360 $ 573 $ 2,933 $ (398) $ (4) $ 2,531
At June 30, 2026
Goodwill $ — $ 2 $ — $ 2 $ 5,015 $ 5,017 $ 144 $ — $ 5,161
Total assets 120,194 12,780 (2,101) 130,873 27,604 158,477 4,283 (733) 162,027
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Electric Utilities
Traditional Electric Operating Companies Southern Power Eliminations Total Southern Company Gas Total Reportable Segments All Other Eliminations Consolidated
(in millions)
Three Months Ended June 30, 2025
Operating revenues $ 5,380 $ 546 $ (122) $ 5,804 $ 979 $ 6,783 $ 225 $ (35) $ 6,973
Other segment items(a) 2,674 296 (122) 2,848 599 3,447 193 (23) 3,617
Depreciation and amortization(b) 957 177 — 1,134 172 1,306 17 — 1,323
Earnings from equity method investments 4 — — 4 23 27 (17) — 10
Interest expense(d) 336 24 — 360 92 452 422 — 874
Income taxes (benefit) 370 (2) — 368 33 401 (112) — 289
Segment net income (loss)(b)(c)(d) $ 1,047 $ 51 $ — $ 1,098 $ 106 $ 1,204 $ (312) $ (12) $ 880
Six Months Ended June 30, 2025
Operating revenues $ 10,692 $ 1,113 $ (245) $ 11,560 $ 2,818 $ 14,378 $ 454 $ (84) $ 14,748
Other segment items(a) 5,468 599 (245) 5,822 1,670 7,492 401 (81) 7,812
Depreciation and amortization(b) 1,905 329 — 2,234 341 2,575 33 — 2,608
Earnings from equity method investments 2 — — 2 62 64 (21) — 43
Interest expense(d) 652 50 — 702 183 885 703 — 1,588
Income taxes (benefit) 596 (3) — 593 162 755 (186) — 569
Segment net income (loss)(b)(c)(d) $ 2,073 $ 138 $ — $ 2,211 $ 524 $ 2,735 $ (518) $ (3) $ 2,214
At December 31, 2025
Goodwill $ — $ 2 $ — $ 2 $ 5,015 $ 5,017 $ 144 $ — $ 5,161
Total assets 114,287 12,657 (915) 126,029 27,387 153,416 2,829 (525) 155,720
(a)Primarily consists of fuel, purchased power, cost of natural gas, cost of other sales, other operations and maintenance expenses, taxes other than income taxes, AFUDC equity, non-service cost-related retirement benefits income, and net income (loss) attributable to noncontrolling interests.
(b)For Southern Power, includes accelerated depreciation related to the repowering of multiple wind facilities of $140 million ($109 million after tax) and $293 million ($228 million after tax) for the three and six months ended June 30, 2026, respectively, and $42 million ($31 million after tax, net of noncontrolling interest impacts) and $69 million ($51 million after tax, net of noncontrolling interest impacts) for the three and six months ended June 30, 2025. See Note (K) under "Southern Power – Wind Repowering Projects" 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.
(c)Attributable to Southern Company.
(d)For All Other, includes pre-tax losses associated with the extinguishment of debt at the parent company of $11 million ($8 million after tax) for the six months ended June 30, 2026 and $129 million ($97 million after tax) for the three and six months ended June 30, 2025.
Traditional Electric Operating Companies
Each of the traditional electric operating companies' single reportable business segment is the sale of electricity.
Alabama Power and Georgia Power have identified utility operations and maintenance expenses as significant segment expenses provided to their CODMs. Utility operations and maintenance expenses is calculated as other operations and maintenance, as reflected on the statements of income, less expenses from unregulated products and services, losses (gains) on asset dispositions, impairment charges, and amortization of cloud software. Alabama Power's utility operations and maintenance expenses are disaggregated into expenses related to Rate RSE and Rate
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CNP Compliance. See Note 2 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.
During the third and fourth quarters of 2025, Mississippi Power updated the information provided to its CODM. As a result, Mississippi Power identified certain operational and environmental compliance expenses as significant segment expenses and has recast prior period information to conform to the current period presentation.
Financial data for significant segment expenses and other segment information for the three and six months ended June 30, 2026 and 2025 was as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Alabama Power
Operating revenues $ 1,963 $ 1,968 $ 4,055 $ 3,980
Utility operations and maintenance
Rate RSE expenses 332 374 633 739
Rate CNP Compliance expenses 71 67 145 142
Total utility operations and maintenance 403 441 778 881
Other segment items(a) 486 544 1,154 1,152
Depreciation and amortization 385 371 766 741
Interest expense 117 116 232 225
Income taxes 135 115 263 226
Segment net income $ 437 $ 381 $ 862 $ 755
Capital expenditures $ 501 $ 599 $ 1,019 $ 1,159
Georgia Power
Operating revenues $ 3,133 $ 3,110 $ 6,276 $ 6,148
Utility operations and maintenance 586 568 1,164 1,104
Other segment items(a) 886 989 2,050 2,106
Depreciation and amortization 503 512 987 1,015
Interest expense 228 198 431 385
Income taxes 151 236 236 334
Segment net income $ 779 $ 607 $ 1,408 $ 1,204
Capital expenditures $ 2,173 $ 1,676 $ 4,243 $ 3,313
Mississippi Power
Operating revenues $ 403 $ 400 $ 875 $ 821
Operational expenses(b) 80 65 144 122
Environmental compliance expenses(c) 3 4 7 6
Other segment items(a) 173 183 424 400
Depreciation and amortization 58 52 113 105
Interest expense 21 20 41 40
Income taxes 16 17 34 34
Segment net income $ 52 $ 59 $ 112 $ 114
Capital expenditures $ 96 $ 126 $ 178 $ 199
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(UNAUDITED)
(a)Primarily consists of fuel, purchased power, expenses from unregulated products and services, losses (gains) on asset dispositions, amortization of cloud software, taxes other than income taxes, AFUDC equity, and non-service cost-related retirement benefits income. For Mississippi Power, includes employee benefit expenses. Also includes earnings from equity method investments, which were immaterial for all periods presented.
(b)Consists of certain operations and maintenance expenses related to PEP and the MRA tariff, including labor costs, materials, contract services, and other normal operational costs. See Note (B) under "Mississippi Power" and Note 2 to the financial statements under "Mississippi Power" in Item 8 of the Form 10-K for additional information regarding PEP and the MRA tariff.
(c)Consists of environmental compliance expenses related to ECO Plan and the MRA tariff. See Note (B) under "Mississippi Power" and Note 2 to the financial statements under "Mississippi Power" in Item 8 of the Form 10-K for additional information regarding ECO Plan and the MRA tariff.
Southern Power
Southern Power's single reportable business segment is the sale of electricity in the competitive wholesale market. Southern Power's CODM utilizes segment expense information in the form of variances to budget to assess performance; therefore, Southern Power has no reportable significant segment expenses.
Financial data for segment information for the three and six months ended June 30, 2026 and 2025 was as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
(in millions)
Operating revenues $ 535 $ 546 $ 1,216 $ 1,113
Other segment items(a) 329 296 772 599
Depreciation and amortization(b) 280 177 558 329
Interest expense 28 24 55 50
Income taxes (benefit) (77) (2) (147) (3)
Segment net income (loss)(b)(c) $ (25) $ 51 $ (22) $ 138
(a)Primarily consists of fuel, purchased power, other operations and maintenance expenses, taxes other than income taxes, and net income (loss) attributable to noncontrolling interests.
(b)Includes accelerated depreciation related to the repowering of multiple wind facilities of $140 million ($109 million after tax) and $293 million ($228 million after tax) for the three and six months ended June 30, 2026, respectively, and $42 million ($31 million after tax, net of noncontrolling interest impacts) and $69 million ($51 million after tax, net of noncontrolling interest impacts) for the three and six months ended June 30, 2025 respectively. See Note (K) under "Southern Power – Wind Repowering Projects" 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.
(c)Southern Power had no earnings from equity method investments for any period presented.
Southern Company Gas
Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services. The non-reportable segments are combined and presented as "All Other."
The gas distribution operations segment is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities in four states.
The gas pipeline investments segment consists of joint ventures in natural gas pipeline investments including a 50% interest in SNG and a 50% joint ownership interest in the Dalton Pipeline. These natural gas pipelines enable the provision of diverse sources of natural gas supplies to the customers of Southern Company Gas. See Note 7 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
The gas marketing services segment provides natural gas marketing to end-use customers primarily in Georgia through SouthStar.
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(UNAUDITED)
The "All Other" presentation includes operating segments and subsidiaries that fall below the quantitative threshold for separate disclosure.
Southern Company Gas' CODM utilizes segment expense information in the form of variances to budget to assess performance; therefore, Southern Company Gas has no reportable significant segment expenses.
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Financial data for business segments for the three and six months ended June 30, 2026 and 2025 was as follows:
Gas Distribution Operations Gas Pipeline Investments Gas Marketing Services Total Reportable Segments AllOther Eliminations Consolidated
(in millions)
Three Months Ended June 30, 2026
Operating revenues $ 885 $ 8 $ 73 $ 966 $ 2 $ (2) $ 966
Other segment items(*) 496 1 54 551 5 (2) 554
Depreciation and amortization 181 1 3 185 — — 185
Earnings from equity method investments — 32 — 32 — — 32
Interest expense 90 9 1 100 1 — 101
Income taxes (benefit) 23 7 4 34 (2) — 32
Segment net income (loss) $ 95 $ 22 $ 11 $ 128 $ (2) $ — $ 126
Six Months Ended June 30, 2026
Operating revenues $ 2,785 $ 16 $ 358 $ 3,159 $ 4 $ (6) $ 3,157
Other segment items(*) 1,673 1 237 1,911 6 (6) 1,911
Depreciation and amortization 360 2 5 367 2 — 369
Earnings from equity method investments — 78 — 78 — — 78
Interest expense 181 18 2 201 5 — 206
Income taxes (benefit) 139 18 32 189 (13) — 176
Segment net income $ 432 $ 55 $ 82 $ 569 $ 4 $ — $ 573
Total assets at June 30, 2026 $ 26,244 $ 1,546 $ 1,710 $ 29,500 $ 11,265 $ (13,161) $ 27,604
Three Months Ended June 30, 2025
Operating revenues $ 885 $ 8 $ 83 $ 976 $ 5 $ (2) $ 979
Other segment items(*) 526 1 68 595 6 (2) 599
Depreciation and amortization 167 1 3 171 1 — 172
Earnings from equity method investments — 23 — 23 — — 23
Interest expense 82 9 1 92 — — 92
Income taxes 19 5 3 27 6 — 33
Segment net income (loss) $ 91 $ 15 $ 8 $ 114 $ (8) $ — $ 106
Six Months Ended June 30, 2025
Operating revenues $ 2,454 $ 16 $ 345 $ 2,815 $ 9 $ (6) $ 2,818
Other segment items(*) 1,431 3 234 1,668 8 (6) 1,670
Depreciation and amortization 330 3 7 340 1 — 341
Earnings from equity method investments — 62 — 62 — — 62
Interest expense 164 18 1 183 — — 183
Income taxes (benefit) 123 13 29 165 (3) — 162
Segment net income $ 406 $ 41 $ 74 $ 521 $ 3 $ — $ 524
Total assets at December 31, 2025 $ 25,391 $ 1,475 $ 1,749 $ 28,615 $ 10,643 $ (11,871) $ 27,387
(*)Primarily consists of cost of natural gas, other operations and maintenance expenses, taxes other than income taxes, AFUDC equity, and non-service cost-related retirement benefits income.
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Table of Contents Index to Financial Statements