Southern SO · USD

SEGMENT AND RELATED INFORMATIONThe Registrants adopted ASU 2023-07 and applied the guidance retrospectively effective for the fiscal year beginning January 1, 2024. See Note 1 under "Recently Adopted Accounting Standards" for additional information.The CODM at Southern Company, the traditional electric operating companies, and Southern Company Gas is the chairman, president, and chief executive officer of such Registrant. Southern Power's CODM consists of the chairman and chief executive officer and the president. The CODMs assess segment performance using net income that is reflected on the Registrants' respective statements of income as net income attributable to the registrant or net income, as applicable. The CODMs use net income in the annual budget and forecasting process and consider budget versus actual results on a monthly basis when making decisions about the allocation of resources. Asset information by segment is not utilized by the CODMs for purposes of assessing performance or allocating resources.Southern CompanySouthern 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 $437 million, $371 million, and $537 million in 2025, 2024, and 2023, respectively. All other inter-segment revenues were immaterial for all periods presented.

REVENUE FROM CONTRACTS WITH CUSTOMERSThe 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 under "Affiliate Transactions" and "Revenues" for additional information. See Notes 9 and 14 for additional information on revenue accounted for under lease and derivative accounting guidance, respectively.

CONTINGENCIES, COMMITMENTS, AND GUARANTEESGeneral Litigation MattersThe 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 CompanyOn July 11, 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 plaintiffs' alleged conspiracy. The plaintiffs seek to recover, among other relief, unspecified monetary damages, including treble damages and attorneys' fees, and injunctive relief. On October 15, 2025, Southern Company moved to dismiss the complaint. On November 6, 2025, the plaintiffs filed an amended complaint naming Southern Nuclear, among others, as a defendant. On December 19, 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.Southern Company and Mississippi PowerIn 2010, the DOE, through a cooperative agreement with SCS, agreed to fund $270 million of the Kemper County energy facility through the grants awarded to the project by the DOE under the Clean Coal Power Initiative Round 2.

INCOME TAXESSouthern Company files a consolidated federal income tax return, and the Registrants file various state income tax returns, some of which are combined or unitary. Under a joint consolidated income tax allocation agreement, each Southern Company subsidiary's current and deferred tax expense is computed on a stand-alone basis, and each subsidiary is allocated an amount of tax similar to that which would be paid if it filed a separate income tax return except for certain credit utilization and state apportionment results. In accordance with IRS regulations, each company is jointly and severally liable for the federal tax liability.Current and Deferred Income TaxesDetails of income tax provisions are as follows:2025SouthernCompanyAlabamaPowerGeorgiaPowerMississippiPowerSouthernPower SouthernCompany Gas(in millions)Federal —Current$139 $110 $99 $57 $71 $28 Deferred399 192 346 (6)(133)98 Total federal538 302 445 51 (62)126 State —Current94 95 32 (1)(3)32 Deferred196 28 125 15 4 24 Total state290 123 157 14 1 56 Total$828 $425 $602 $65 $(61)$182 2024SouthernCompanyAlabamaPowerGeorgiaPowerMississippiPowerSouthernPowerSouthernCompany Gas(in millions)Federal —Current$221 $357 $200 $32 $(112)$84 Deferred387 (111)211 2 106 86 Total federal608 246 411 34 (6)170 State —Current152 103 52 (1)6 42 Deferred209 11 140 14 (13)46 Total state361 114 192 13 (7)88 Total$969 $360 $603 $47 $(13)$258 2023SouthernCompanyAlabamaPowerGeorgiaPowerMississippiPowerSouthernPowerSouthernCompany Gas(in millions)Federal —Current$54 $242 $205 $49 $(320)$62 Deferred299 (257)195 (26)334 68 Total federal353 (15)400 23 14 130 State —Current41 82 37 1 (1)24 Deferred102 14 11 12 (1)57 Total state143 96 48 13 (2)81 Total$496 $81 $448 $36 $12 $211 Southern Company's and Southern Power's ITCs and PTCs generated in the current tax year and carried forward from prior tax years that cannot be utilized or transferred in the current tax year are reclassified from current to deferred taxes in federal income tax expense in the tables above. Southern Power's ITCs and PTCs reclassified in this manner were $95 million for 2025 and were immaterial for 2024 and 2023. See "Cash Paid for Income Taxes" and "Deferred Tax Assets and Liabilities" herein for additional information.Under current tax law, certain projects are eligible for ITCs.

LEASESLesseeThe Registrants recognize leases with a term of greater than 12 months on the balance sheet as lease obligations, representing the discounted future fixed payments due, along with ROU assets that will be amortized over the term of each lease.As lessee, the Registrants lease certain electric generating units (including renewable energy facilities), real estate/land, communication towers, railcars, and other equipment and vehicles. The major categories of lease obligations are as follows:SouthernCompanyAlabamaPowerGeorgiaPowerMississippiPowerSouthernPowerSouthernCompanyGas (in millions)At December 31, 2025Electric generating units(*)$1,064 $53 $1,793 $— $— $— Real estate/land931 3 37 1 541 111 Communication towers134 3 5 — — 20 Railcars74 39 26 9 — — Other49 6 3 19 — — Total$2,252 $104 $1,864 $29 $541 $131 At December 31, 2024Electric generating units(*)$672 $56 $1,509 $— $— $— Real estate/land834 3 45 2 540 20 Communication towers118 2 4 — — 21 Railcars64 31 29 4 — — Other52 2 2 16 — — Total$1,740 $94 $1,589 $22 $540 $41 (*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.Real estate/land leases primarily consist of commercial real estate leases at Southern Company, Georgia Power, and Southern Company Gas and various land leases primarily associated with renewable energy facilities at Southern Power. The commercial real estate leases have remaining terms of up to 18 years while the land leases have remaining terms of up to 41 years, including renewal periods.Communication towers are leased for the installation of equipment to provide cellular phone service to customers and to support the automated meter infrastructure programs at the traditional electric operating companies and Nicor Gas. Communication tower leases have remaining terms of up to 15 years.Renewal options exist in many of the leases. The expected term used in calculating the lease obligation generally reflects only the noncancelable period of the lease unless it is considered reasonably certain that the lease will be extended.

ACQUISITIONS AND DISPOSITIONSAlabama PowerOn September 30, 2025, Alabama Power completed its acquisition of Tenaska Alabama Partners, L.P., which owned and operated the Lindsay Hill Generating Station, an approximately 879.7-MW combined cycle generation facility in Autauga County, Alabama. The transaction was accounted for as a business combination. The total purchase price was $635 million, of which $622 million was related to net assets recorded within property, plant, and equipment and the remainder was included in inventory, current receivables, and accounts payable on the balance sheet. The transaction was recorded as a business acquisition within the investing section of the statement of cash flows. Alabama Power assumed an existing power sales agreement under which the full output of the generating facility remains committed to a non-affiliated third party through April 2027. See Note 2 under "Alabama Power – Rate CNP New Plant" for additional information.Mississippi PowerOn July 30, 2025, Mississippi Power completed the acquisition of FP&L's 50% ownership interest in Plant Daniel Units 1 and 2 and, as part of the acquisition, received approximately $36 million from FP&L. See Note 2 under "Mississippi Power – Plant Daniel" for additional information.Southern PowerSouthern Power's acquisition-related costs for the projects discussed under "Asset Acquisitions" and "Construction Projects" were not material for any of the years presented.Asset AcquisitionsDuring 2023, Southern Power acquired the Millers Branch and South Cheyenne projects, as discussed further under "Construction Projects" below, with an aggregate purchase price of $193 million. There were no asset acquisitions during 2024 and 2025.Construction ProjectsDuring 2024, Southern Power completed construction of and placed in service the 150-MW South Cheyenne solar facility. During 2025, Southern Power continued construction of the three phases of the 512-MW Millers Branch solar facility. At December 31, 2025, the total cost of construction incurred for the Millers Branch project was $694 million, which is primarily included in CWIP. The ultimate outcome of these matters cannot be determined at this time.

Risk Management and StrategyAlthough many of the networks are segmented, overall network security is a centralized shared service across the Southern Company system, led by the Cybersecurity Organization and the CISO. Recognizing that no single technology, process, or business control can effectively prevent or mitigate all risks related to cyber threats, multiple technologies, processes, and controls, all working independently but as part of a cohesive strategy, are employed to reduce risk. Southern Company system exposure and defenses are regularly tested through auditing, penetration testing, vulnerability testing, and other exercises designed to assess effectiveness.The Southern Company system emphasizes both security and resiliency through business assurance and incident response plans designed to identify, evaluate, and remediate incidents when they occur. A 24/7 security operations center is also utilized, which facilitates real-time situational awareness across the cyber-threat environment, and a robust insider threat protection program that leverages cross-function information sharing to assess insider threat activity is employed. The Southern Company system regularly reviews and updates its plans, policies, and technologies and conducts regular training exercises and crisis management preparedness activities to test their effectiveness. In addition, a security awareness program for the Southern Company system's employees has also been implemented, which is designed to educate and train employees at least annually, or more often as needed, about risks inherent to human interaction with information and operational technology.The Southern Company system's cybersecurity program is increasingly leveraging intelligence-sharing capabilities about emerging threats within the energy industry, across other industries, with specialized vendors, and through public-private partnerships with U.S. government intelligence agencies. By engaging with both the Electricity Information Sharing and Analysis Center and the Downstream Natural Gas Information Sharing and Analysis Center, the Southern Company system benefits from quality analysis and rapid sharing of security information across the energy sector. Such intelligence helps to allow for better detection and prevention of emerging cyber threats before they materialize.

FINANCINGLong-term DebtDetails of long-term debt at December 31, 2025 and 2024 are provided in the following table:At December 31, 2025Balance Outstanding atDecember 31,MaturityWeighted AverageInterest Rate20252024(in millions)Southern CompanySenior notes(a)2026-20754.38%$49,922 $44,862 Junior subordinated notes2027-20854.82%9,922 7,389 FFB loans(b)2026-20442.88%4,617 4,703 Revenue bonds(c)2026-20633.14%3,323 3,379 First mortgage bonds(d)2026-20653.93%2,925 2,775 Medium-term notes2026-20277.03%84 84 Other long-term debt2026-20454.56%603 209 Finance lease obligations(e)768 287 Unamortized fair value adjustment249 275 Unamortized debt premium (discount), net(56)(58)Unamortized debt issuance expenses(488)(419)Total long-term debt71,869 63,486 Less: Amount due within one year(a)6,220 4,718 Total long-term debt excluding amount due within one year$65,649 $58,768 Alabama PowerSenior notes2026-20754.02%$10,725 $9,875 Revenue bonds(c)2026-20633.11%1,300 1,300 Other long-term debt2026-20305.32%65 61 Finance lease obligations(e)12 4 Unamortized debt premium (discount), net(20)(19)Unamortized debt issuance expenses(69)(67)Total long-term debt12,013 11,154 Less: Amount due within one year625 655 Total long-term debt excluding amount due within one year$11,388 $10,499 Georgia PowerSenior notes2026-20744.48%$13,692 $11,292 Junior subordinated notes20775.00%270 270 FFB loans(b)2026-20442.88%4,617 4,703 Revenue bonds(c)2026-20623.16%1,923 1,968 Other long-term debt20264.59%400 — Finance lease obligations(e)734 261 Unamortized debt premium (discount), net(17)(21)Unamortized debt issuance expenses(127)(123)Total long-term debt21,492 18,350 Less: Amount due within one year1,370 966 Total long-term debt excluding amount due within one year$20,122 $17,384 At December 31, 2025Balance Outstanding atDecember 31,MaturityWeighted AverageInterest Rate20252024(in millions)Mississippi PowerSenior notes2026-20554.40%$1,675 $1,575 Revenue bonds(c)2027-20522.94%101 111 Finance lease obligations(e)19 14 Unamortized debt premium (discount), net1 2 Unamortized debt issuance expenses(10)(9)Total long-term debt1,786 1,693 Less: Amount due within one year66 12 Total long-term debt excluding amount due within one year$1,720 $1,681 Southern PowerSenior notes(a)2026-20464.