# SOUTHERN CO (SO) Informational only - not investment advice. CIK: 0000092122 SIC: 4911 Electric Services SIC breadcrumb: [Transportation, Communications, Electric, Gas, And Sanitary Services](/division/E/) > [Electric, Gas, And Sanitary Services](/major-group/49/) > [SIC 4911 Electric Services](/industry/4911/) Latest 10-K filed: 2026-02-19 SEC page: https://www.sec.gov/edgar/browse/?CIK=92122 Filing source: https://www.sec.gov/Archives/edgar/data/92122/000009212226000006/so-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-19 · accession 0000092122-26-000006 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000092122.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 29,553,000,000 USD | 2025 | verified | | Net income | 4,341,000,000 USD | 2025 | verified | | Assets | 155,720,000,000 USD | 2025 | verified | | Free cash flow | -2,935,000,000 USD | 2025 | computed | | Net margin | 14.69% | 2025 | computed | | Operating margin | 24.65% | 2025 | computed | | Revenue YoY | +10.59% | 2025 | computed | | ROE | 12.05% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. Peer groups: [Regulated electric utilities](/compare/utilities/) · SIC 4911 Electric Services No market price, no rating, no forecast on this site. Not investment advice. ## Peer comparisons including SO - Regulated electric utilities: [peer review](/compare/utilities/) · [market-risk page](/compare/utilities/risk/) ### Peer percentile fingerprint | Ratio | SO | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 14.7% | 12.2% | 76 | 26 | | Operating margin | 24.7% | 20.2% | 80 | 26 | | Revenue growth | 10.6% | 9.2% | 64 | 26 | | FCF margin | -9.9% | -2.0% | 32 | 23 | | ROE | 12.1% | 9.4% | 74 | 28 | | ROA | 2.8% | 2.6% | 67 | 28 | | Liabilities / equity | 3.24 | 2.76 | 67 | 28 | | Current ratio | 0.65 | 0.81 | 19 | 28 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 4911 Electric Services, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 29553000000 | USD | 2025 | 2026-02-19 | | Net income | 4341000000 | USD | 2025 | 2026-02-19 | | Assets | 155720000000 | USD | 2025 | 2026-02-19 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000092122.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 19,896,000,000 | 23,031,000,000 | 23,495,000,000 | 21,419,000,000 | 20,375,000,000 | 23,113,000,000 | 29,279,000,000 | 25,253,000,000 | 26,724,000,000 | 29,553,000,000 | | Net income | | | | | | | | 3,976,000,000 | 4,401,000,000 | 4,341,000,000 | | Operating income | 4,486,000,000 | 2,333,000,000 | 4,191,000,000 | 7,736,000,000 | 4,885,000,000 | 3,698,000,000 | 5,370,000,000 | 5,826,000,000 | 7,068,000,000 | 7,285,000,000 | | Diluted EPS | 2.55 | 0.84 | 2.17 | 4.50 | 2.93 | 2.24 | 3.26 | 3.62 | 3.99 | 3.92 | | Operating cash flow | 4,894,000,000 | 6,394,000,000 | 6,945,000,000 | 5,781,000,000 | 6,696,000,000 | 6,169,000,000 | 6,302,000,000 | 7,553,000,000 | 9,788,000,000 | 9,802,000,000 | | Capital expenditures | 7,310,000,000 | 7,423,000,000 | 8,001,000,000 | 7,555,000,000 | 7,522,000,000 | 7,586,000,000 | 7,923,000,000 | 9,095,000,000 | 8,955,000,000 | 12,737,000,000 | | Dividends paid | 2,104,000,000 | 2,300,000,000 | 2,425,000,000 | 2,570,000,000 | 2,685,000,000 | 2,777,000,000 | 2,907,000,000 | 3,035,000,000 | 2,954,000,000 | 3,015,000,000 | | Assets | 109,697,000,000 | 111,005,000,000 | 116,914,000,000 | 118,700,000,000 | 122,935,000,000 | 127,534,000,000 | 134,891,000,000 | 139,331,000,000 | 145,180,000,000 | 155,720,000,000 | | Liabilities | 82,803,000,000 | 85,153,000,000 | 87,584,000,000 | 86,650,000,000 | 90,410,000,000 | 94,967,000,000 | 100,359,000,000 | 104,106,000,000 | 108,506,000,000 | 116,853,000,000 | | Stockholders' equity | 24,758,000,000 | 24,167,000,000 | 24,723,000,000 | 27,505,000,000 | 27,972,000,000 | 27,874,000,000 | 30,408,000,000 | 31,444,000,000 | 33,208,000,000 | 36,016,000,000 | | Cash and cash equivalents | 1,975,000,000 | 2,130,000,000 | 1,396,000,000 | 1,975,000,000 | 1,065,000,000 | 1,798,000,000 | 1,917,000,000 | 748,000,000 | 1,070,000,000 | 1,639,000,000 | | Free cash flow | -2,416,000,000 | -1,029,000,000 | -1,056,000,000 | -1,774,000,000 | -826,000,000 | -1,417,000,000 | -1,621,000,000 | -1,542,000,000 | 833,000,000 | -2,935,000,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | | 15.74% | 16.47% | 14.69% | | Operating margin | 22.55% | 10.13% | 17.84% | 36.12% | 23.98% | 16.00% | 18.34% | 23.07% | 26.45% | 24.65% | | Return on equity | | | | | | | | 12.64% | 13.25% | 12.05% | | Return on assets | | | | | | | | 2.85% | 3.03% | 2.79% | | Liabilities / equity | 3.34 | 3.52 | 3.54 | 3.15 | 3.23 | 3.41 | 3.30 | 3.31 | 3.27 | 3.24 | | Current ratio | 0.75 | 0.74 | 0.67 | 0.78 | 0.71 | 0.82 | 0.66 | 0.77 | 0.67 | 0.65 | ## As-reported value updates 4 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/SO/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000092122.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | | | 1.03 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | | | 1.35 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | 0.79 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 5,748,000,000 | 823,000,000 | 0.76 | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 6,980,000,000 | 1,432,000,000 | 1.29 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 6,045,000,000 | 796,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 6,646,000,000 | 1,071,000,000 | 1.03 | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 6,463,000,000 | 1,188,000,000 | 1.09 | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 7,274,000,000 | 1,535,000,000 | 1.39 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 6,341,000,000 | 466,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 7,775,000,000 | 1,270,000,000 | 1.21 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | 1,270,000,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 6,973,000,000 | | 0.79 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 853,000,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 7,823,000,000 | | 1.54 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 6,981,000,000 | 341,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 8,397,000,000 | 1,338,000,000 | 1.20 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from SO's latest 10-K: [/company/SO/business/](/company/SO/business/). ## Risk Factors Verbatim Item 1A Risk Factors from SO's latest 10-K: [/company/SO/risk-factors/](/company/SO/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/92122/000009212226000054/so-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-07-30 Report date: 2026-06-30 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. [[GREPCENT_TABLE]] [["","Page"],["Combined Management's Discussion and Analysis of Financial Condition and Results of Operations"],["Overview","91"],["Results of Operations","93"],["Southern Company","93"],["Alabama Power","100"],["Georgia Power","105"],["Mississippi Power","110"],["Southern Power","114"],["Southern Company Gas","118"],["Future Earnings Potential","124"],["Accounting Policies","129"],["Financial Condition and Liquidity","129"]] [[/GREPCENT_TABLE]] The following Management's Discussion and Analysis of Financial Condition and Results of Operations is a combined presentation; however, information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf and each Registrant makes no representation as to information related to the other Registrants. 90     Table of Contents                                Index to Financial Statements MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW Southern Company is a holding company that owns all of the common stock of three traditional electric operating companies (Alabama Power, Georgia Power, and Mississippi Power), Southern Power, and Southern Company Gas and owns other direct and indirect subsidiaries. The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. Southern Company's reportable segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the distribution of natural gas and sale of other complementary products and services by Southern Company Gas. Alabama Power, Georgia Power, and Mississippi Power each operate with one reportable business segment, since substantially all of their business is providing electric service to customers. Southern Power also operates its business with one reportable business segment, the sale of electricity in the competitive wholesale market. Southern Company Gas' reportable segments are gas distribution operations, gas pipeline investments, and gas marketing services. See Note (L) to the Condensed Financial Statements herein for additional information on segment reporting. For additional information on the Registrants' primary business activities, see BUSINESS – "The Southern Company System" in Item 1 of the Form 10-K. The Registrants continue to focus on several key performance indicators. For the traditional electric operating companies and Southern Company Gas, these indicators include, but are not limited to, customer satisfaction, plant availability, electric and natural gas system reliability, and execution of major construction projects. Southern Company Gas also continues to focus on several operating metrics, including customer count and volumes of natural gas sold. For Southern Power, key performance indicators include, but are not limited to, the equivalent forced outage rate and contract availability to evaluate operating results and help ensure its ability to meet its contractual commitments to customers. In addition, Southern Company and the Subsidiary Registrants focus on earnings per share and net income, respectively, as a key performance indicator. Recent Developments Alabama Power In December 2025, the Alabama PSC issued a consent order to keep retail rates stable through 2027. On April 2, 2026, the State of Alabama enacted legislation providing that retail base rates established and in place on October 1, 2026 may not be increased before January 1, 2029 for utilities that are regulated by the Alabama PSC and that provide retail electric service. The ultimate outcome of this matter cannot be determined at this time. See Note 2 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information. Georgia Power On May 28, 2026, the Georgia PSC approved a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors regarding Georgia Power's separate filings in February 2026 associated with recovery of fuel and storm restoration costs. The approved stipulation decreased annual fuel billings by 12.9%, or approximately $394 million, effective June 1, 2026. Under the stipulation, the Georgia PSC approved the following related to storm restoration costs: •Recovery of $31 million annually for storm restoration costs incurred after December 31, 2025. •Recovery of Georgia Power's adjusted regulatory asset balance totaling $869 million, as determined through the proceedings and stipulation, related to storm damage as of December 31, 2025 over a period of 67 months from June 1, 2026 through December 31, 2031, or $156 million annually. Additionally, the stipulation provided for the treatment of the Internal Revenue Code §45U PTCs generated from Georgia Power's nuclear generating facilities in 2024 and 2025, in which Georgia Power agreed to use $77 million of these tax credits for the benefit of customers. See Note (B) to the Condensed Financial Statements under "Georgia Power" herein for additional information. 91     Table of Contents                                Index to Financial Statements MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Mississippi Power On June 18, 2026, the Mississippi PSC approved Mississippi Power's annual retail PEP Evaluation Report for 2026, resulting in an annual increase in revenues of approximately 1.8%, or $20 million, primarily due to increases in investment and depreciation. In accordance with the PEP rate schedule, the increase became effective with the first billing cycle of January 2026. In the PEP filing, the Mississippi PSC approved the use of approximately $7 million of the reliability reserve balance, which Mississippi Power utilized for reliability-related generation, transmission, and distribution expenses during the first six months of 2026. In conjunction with the PEP filing, the Mississippi PSC approved approximately $21 million associated with certain federal excess accumulated deferred income taxes resulting from the Tax Reform Legislation to be credited back to customers over an 18-month period starting with the first billing cycle of July 2026. See Note (B) to the Condensed Financial Statements under "Mississippi Power" herein for additional information. Southern Power In the first quarter 2026, Southern Power committed to development projects to upgrade certain turbines at its existing Franklin and Wansley natural gas facilities, which are projected to add up to 400 MWs of incremental capacity. Commercial operations for the incremental capacity at the natural gas facilities are projected to occur between the second quarter 2029 and the fourth quarter 2030. The ultimate outcome of these matters cannot be determined at this time. In addition, during the first six months of 2026 and subsequent to June 30, 2026, Southern Power placed in service all 200 MWs of the repowering project at the Kay wind facility. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information. At June 30, 2026, Southern Power's average investment coverage ratio for its generating assets, including those owned with various partners, based on the ratio of investment under contract to total investment using the respective facilities' net book value (or expected in-service value for facilities under construction) as the investment amount was 97% through 2030 and 88% through 2035, with an average remaining contract duration of approximately 12 years. Southern Company Gas On June 16, 2026, in connection with Nicor Gas' 2023 general base rate case proceeding, the Illinois Appellate Court determined that the Illinois Commission did not provide sufficient support for its disallowance of $43 million of Nicor Gas' planned capital investments that were expected to be completed by December 31, 2024. As the disallowance related to planned capital investments for which costs had not yet been incurred, it was not included in the pre-tax charge to income recorded in 2023. This matter remains subject to further proceedings before the Illinois Commission and had no impact on the current period financial statements. On July 21, 2026, Nicor Gas filed a petition for leave to appeal with the Illinois Supreme Court related to the capital structure approved in Nicor Gas' 2023 general base rate case proceeding. The Illinois Supreme Court is expected to rule on the petition on September 30, 2026. The ultimate outcome of these matters cannot be determined at this time. 92     Table of Contents                                Index to Financial Statements MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) RESULTS OF OPERATIONS Southern Company Net Income [[GREPCENT_TABLE]] [["Second Quarter 2026 vs. Second Quarter 2025","","Year-to-Date 2026 vs. Year-to-Date 2025"],["(change in millions)","","(% change)","","(change in millions)","","(% change)"],["$294","","33.4","","$317","","14.3"]] [[/GREPCENT_TABLE]] Consolidated net income attributable to Southern Company was $1.2 billion ($1.03 per share) in the second quarter 2026 compared to $0.9 billion ($0.80 per share) for the corresponding period in 2025. For year-to-date 2026, consolidated net income attributable to Southern Company was $2.5 billion ($2.24 per share) compared to $2.2 billion ($2.01 per share) for the corresponding period in 2025. The increases were primarily due to increases within retail electric revenues associated with sales growth, higher natural gas revenues associated with base rate increases, decreases in income taxes, and increases in AFUDC equity and earnings from equity method investments, partially offset by increases in depreciation and amortization. Also contributing to the increase in the second quarter 2026 was a decrease in interest expense. Retail Electric Revenues In the second quarter 2026, retail electric revenues were $4.75 billion compared to $4.76 billion for the corresponding period in 2025. For year-to-date 2026, retail electric revenues were $9.39 billion compared to $9.36 billion for the corresponding period in 2025. Details of the changes in retail electric revenues were as follows: [[GREPCENT_TABLE]] [["","Second Quarter 2026 vs. Second Quarter 2025","","Year-to-Date 2026 vs. Year-to-Date 2025"],["","(change in millions)","","(% change)","","(change in millions)","","(% change)"],["Rates and pricing","$","(10)","","","(0.2)","%","","$","(31)","","","(0.3)","%"],["Sales growth","77","","","1.6","","","158","","","1.7"],["Weather","(10)","","","(0.2)","","","(79)","","","(0.9)"],["Fuel and other cost recovery","(70)","","","(1.5)","","","(21)","","","(0.2)"],["Retail electric revenues","$","(13)","","","(0.3)","%","","$","27","","","0.3","%"]] [[/GREPCENT_TABLE]] Changes in rates and pricing resulted in decreases in revenues in the second quarter and year-to-date 2026 when compared to the corresponding periods in 2025 primarily due to lower contributions from commercial and industrial customers with variable demand-driven pricing at Georgia Power, partially offset by an increase in Rate CNP Compliance revenues at Alabama Power and higher revenues associated with a tolling arrangement accounted for as a sales-type lease at Mississippi Power. Also partially offsetting the decrease in revenues for year-to-date 2026 were increases in PEP rates at Mississippi Power. See Note 2 to the financial statements under "Alabama Power – Rate CNP Compliance" and "Mississippi Power – Performance Evaluation Plan" in Item 8 of the Form 10-K for additional information. Changes in sales resulted in increases in revenues in the second [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/92122/000009212226000006/so-20251231.htm Complete FY 2025 MD&A: /company/SO/mda/fy2025/ Extracted from a later financial-section MD&A body after the formal Item 7 span was a short reference. Confidence: high Filing date: 2026-02-19 Report date: 2025-12-31 COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS OVERVIEW Business Activities Southern Company is a holding company that owns all of the common stock of three traditional electric operating companies, Southern Power, and Southern Company Gas and owns other direct and indirect subsidiaries. The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. Southern Company's reportable segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the distribution of natural gas and other complementary products and services by Southern Company Gas. See Note 16 to the financial statements for additional information. •The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are vertically integrated utilities providing electric service to retail customers in three Southeastern states in addition to wholesale customers in the Southeast. •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 Power continually seeks opportunities to execute its strategy to create value through various transactions including acquisitions, dispositions, and sales and purchases of partnership interests, development and construction of new generating facilities, and entry into PPAs primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers. In general, Southern Power commits to the construction or acquisition of new generating capacity only after entering into or assuming long-term PPAs for the new facilities. •Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas. Southern Company Gas owns natural gas distribution utilities in four states – Illinois, Georgia, Virginia, and Tennessee – and is also involved in several other complementary businesses. Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services, which includes SouthStar, a Marketer and provider of energy-related products and services to natural gas choice markets – and one non-reportable segment, all other. See Notes 7, 15, and 16 to the financial statements for additional information. Southern Company's other business activities include providing distributed energy and resilience solutions and deploying microgrids for commercial, industrial, governmental, and utility customers, as well as investments in telecommunications. Management continues to evaluate the contribution of each of these activities to total shareholder return and may pursue acquisitions, dispositions, and other strategic ventures or investments accordingly. See FUTURE EARNINGS POTENTIAL herein for a discussion of many factors that could impact the Registrants' future results of operations, financial condition, and liquidity. Recent Developments Alabama Power Jurisdictional Separation Study Order On June 5, 2025, the Alabama PSC approved an order authorizing Alabama Power to implement changes related to the Jurisdictional Separation Study (JSS) under Rate RSE, which allocates costs between retail and other electric services. For 2026, a revised JSS allocation factor will account for Alabama Power system capacity previously allocated to wholesale electric services that is being used for retail electric service starting January 1, 2026. In addition, Alabama Power is authorized to establish a regulatory asset to defer certain costs associated with this capacity for 2026, and those costs are estimated to be approximately $100 million. Beginning in 2027, Alabama Power will amortize the regulatory asset on a levelized basis over a period not exceeding 10 years. Reliability Reserve Accounting Order In 2025, Alabama Power utilized $30 million of the reliability reserve for reliability-related transmission, distribution, and generation expenses and accrued $83 million to the reliability reserve in accordance with procedures established in the reliability reserve accounting order. In addition, Alabama Power notified the Alabama PSC through its annual RSE filing of its intent to utilize $60 million of its reliability reserve balance in 2026. See Note 2 to the financial statements under "Alabama Power – Reliability Reserve Accounting Order" for additional information. II-3     Table of Contents                                Index to Financial Statements         COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Rate CNP New Plant On August 13, 2025, the Alabama PSC approved Alabama Power's petition for a CCN authorizing Alabama Power to complete the acquisition of the Lindsay Hill Generating Station (879.7 MWs), which had been approved by the FERC on June 6, 2025. The transaction closed on September 30, 2025. See Notes 2 and 15 to the financial statements under "Alabama Power – Rate CNP New Plant" and "Alabama Power," respectively, for additional information. Nuclear Production Tax Credits Order On October 7, 2025, the Alabama PSC issued an order authorizing Alabama Power to establish a regulatory liability for nuclear PTCs received through its nuclear generating facilities pursuant to Internal Revenue Code §45U for tax years 2024 through 2032. The §45U PTCs will be deferred as a regulatory liability until the Alabama PSC provides direction on how to apply them for the benefit of customers. For the 2024 tax year, Alabama Power received $180 million in §45U PTCs on Southern Company's consolidated federal income tax return. The ultimate outcome of this matter cannot be determined at this time. December 5th Consent Order On December 5, 2025, the Alabama PSC issued a consent order (December 5th Consent Order) approving a plan to keep retail rates stable through 2027. Alabama Power has agreed to: •a moratorium on any upward rate adjustments associated with Rate RSE for 2027; •maintain the current Rate CNP Compliance factors through December 2027; •delay the effective date of Rate CNP New Plant adjustment to recover costs associated with the Lindsay Hill Generating Station acquisition until January 2028 billings; •maintain the current Rate CNP PPA factor through March 2028; and •maintain the current Rate ECR interim factor through December 2027. To implement the plan, the Alabama PSC authorized Alabama Power to apply any customer refund resulting from Alabama Power's 2025 Rate RSE actual result calculation to the NDR. The Alabama PSC also approved the use of Alabama Power's 2024 nuclear PTCs, when monetized, to offset retail cost of service in 2027. In addition, any future regulatory liabilities associated with monetized nuclear PTCs from 2025, 2026, and 2027 will be used to offset future retail cost of service, including any under recovered balances under Rate CNP and Rate ECR. Furthermore, the Alabama PSC, as part of its routine oversight of Alabama Power's regulated activities, will monitor factors such as weather, natural disasters, changes in fuel markets, and other significant unforeseen events that may impact this plan. If such events occur, Alabama Power will work with the Alabama PSC to determine a reasonable and responsive course of action under the circumstances. See Note 2 to the financial statements under "Alabama Power" for additional information. Rate RSE On December 1, 2025, Alabama Power made its required annual Rate RSE submission to the Alabama PSC of projected data for calendar year 2026. Projected earnings were within the specified range; therefore, retail rates under Rate RSE remain unchanged for 2026. For the year ended December 31, 2025, Alabama Power's weighted common equity return exceeded 6.15%, resulting in Alabama Power establishing a current regulatory liability of $57 million for Rate RSE refunds, which was subsequently applied to the NDR pursuant to the December 5th Consent Order. See Note 2 to the financial statements under "Alabama Power – Rate RSE" for additional information. Georgia Power 2022 ARP On July 1, 2025, the Georgia PSC approved a settlement agreement among Georgia Power, the staff of the Georgia PSC, and certain intervenors to extend the 2022 ARP for an additional three-year term through December 31, 2028 (ARP Extension). Under the ARP Extension, base rates will not be adjusted in 2026, 2027, or 2028 except for reasonable and prudent storm damage costs incurred through December 31, 2025. In a separate regulatory proceeding, on February 17, 2026, Georgia Power filed a request with the Georgia PSC to recover the reasonable and prudent storm costs incurred through December 31, 2025, which is expected to increase annual recovery by approximately $300 million effective June 1, 2026. The proposed annual recovery included in the filing is expected to fully II-4     Table of Contents                                Index to Financial Statements         COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS recover the regulatory asset balance related to storm damage at December 31, 2025 over four years, and the remaining balance at December 31, 2028 will be included in the next rate case. Georgia Power expects the Georgia PSC to make a final decision on this matter on May 28, 2026. The ultimate outcome of this matter cannot be determined at this time. Under the ARP Extension, Georgia Power's retail ROE set point will continue at 10.50% and its equity ratio will continue at 56%. Additionally, the retail ROE range approved by the Georgia PSC in the 2022 ARP, of 9.50% to 11.90%, will continue. See Note 2 to the financial statements under "Georgia Power – Rate Plans" and " – Storm Damage Recovery" for additional information. Integrated Resource Plans 2025 IRP On July 15, 2025, the Georgia PSC approved Georgia Power's 2025 IRP, as modified by a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors. In the 2025 IRP decision, the Georgia PSC approved several requests, including the following: •Extended operation of Plant Scherer Unit 3 (614 MWs based on 75% ownership) through at least December 31, 2035 and Plant Gaston Units 1 through 4 (500 MWs based on 50% ownership through SEGCO) through December 31, 2034. •Installation of environmental controls and natural gas co-firing at Plant Bowen Units 1 through 4 (3,160 MWs), Plant Scherer Units 1 and 2 (137 MWs based on 8.4% ownership), and Plant Scherer Unit 3 for compliance with both ELG supplemental rules and GHG rules. •Upgrades to Plant McIntosh Units 10 and 11 (1,319 MWs) for a projected 194 MWs of incremental capacity by 2028 and Plant McIntosh Units 1 through 8 (640 MWs) for a projected 74 MWs of incremental capacity by 2033. •Upgrades to Plant Vogtle Units 1 and 2 (1,060 MWs based on 45.7% ownership) for a projected 54 MWs of incremental capacity, some of which could be available as early as 2028. •Investments related to the continued reliable operations of four hydro facilities, as well as the authority to spend up to $25 million to undertake engineering studies related to two additional hydro facilities. •RFP for at least 1,100 MWs of utility scale and distributed generation renewable resources. See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans – 2025 IRP" for additional information. Certification Requests On September 4, 2025, the Georgia PSC approved Georgia Power's request to certify a Georgia Power-owned battery energy storage facility with a capacity of 200 MWs and a projected COD in 2027. On December 19, 2025, the Georgia PSC approved Georgia Power's request, as modified [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/SO/mda/fy2025/ All MD&A years: /company/SO/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/SO/mda/fy2024/): filed 2025-02-20; accession 0000092122-25-000018 (https://www.sec.gov/Archives/edgar/data/92122/000009212225000018/so-20241231.htm) - [FY 2023 MD&A](/company/SO/mda/fy2023/): filed 2024-02-15; accession 0000092122-24-000009 (https://www.sec.gov/Archives/edgar/data/92122/000009212224000009/so-20231231.htm) - [FY 2022 MD&A](/company/SO/mda/fy2022/): filed 2023-02-16; accession 0000092122-23-000012 (https://www.sec.gov/Archives/edgar/data/92122/000009212223000012/so-20221231.htm) - [FY 2021 MD&A](/company/SO/mda/fy2021/): filed 2022-02-17; accession 0000092122-22-000003 (https://www.sec.gov/Archives/edgar/data/92122/000009212222000003/so-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 4911 Electric Services) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate Macro-to-micro threads including this sector: [Money & trade](/thread/money-trade/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/SO.md · JSON record: /company/SO.json · verified financials: /company/SO/financials.json / /company/SO/financials.csv · machine TOC for the whole site: /llms.txt