SOUTHERN CO
For the period ended Dec 31, 2023. Filed Feb 15, 2024.
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FY2023 · Filed Feb 15, 2024
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Retirement Benefits
- RETIREMENT BENEFITS
The Southern Company system has a qualified defined benefit, trusteed pension plan covering substantially all employees, with the exception of PowerSecure employees. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified pension plan were made for the year ended December 31, 2023 andno mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2024. 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
II-201 commissions. Southern Company Gas has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses. For the year ending December 31, 2024, no contributions to any other postretirement trusts are expected.
Actuarial Assumptions
The weighted average rates assumed in the actuarial calculations used to determine both the net periodic costs for the pension and other postretirement benefit plans for the following year and the benefit obligations as of the measurement date are presented below.
| 2023 | ||||||
|---|---|---|---|---|---|---|
| Assumptions used to determine netperiodic costs: | Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas |
| Pension plans | ||||||
| Discount rate – benefit obligations | 5.25% | 5.26% | 5.25% | 5.25% | 5.31% | 5.24% |
| Discount rate – interest costs | 5.13 | 5.14 | 5.12 | 5.12 | 5.19 | 5.12 |
| Discount rate – service costs | 5.36 | 5.38 | 5.38 | 5.37 | 5.37 | 5.31 |
| Expected long-term return on plan assets | 8.40 | 8.40 | 8.40 | 8.40 | 8.40 | 8.40 |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
| Other postretirement benefit plans | ||||||
| Discount rate – benefit obligations | 5.18% | 5.20% | 5.17% | 5.17% | 5.24% | 5.16% |
| Discount rate – interest costs | 5.08 | 5.09 | 5.07 | 5.08 | 5.12 | 5.07 |
| Discount rate – service costs | 5.34 | 5.35 | 5.34 | 5.33 | 5.33 | 5.33 |
| Expected long-term return on plan assets | 7.67 | 7.95 | 7.49 | 7.43 | — | 6.59 |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
| 2022 | ||||||
|---|---|---|---|---|---|---|
| Assumptions used to determine netperiodic costs: | Southern Company | AlabamaPower | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas |
| Pension plans | ||||||
| Discount rate – benefit obligations | 3.09% | 3.12% | 3.07% | 3.07% | 3.21% | 3.04% |
| Discount rate – interest costs | 2.55 | 2.58 | 2.51 | 2.54 | 2.79 | 2.53 |
| Discount rate – service costs | 3.34 | 3.36 | 3.37 | 3.35 | 3.36 | 3.21 |
| Expected long-term return on plan assets | 8.25 | 8.25 | 8.25 | 8.25 | 8.25 | 8.25 |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
| Other postretirement benefit plans | ||||||
| Discount rate – benefit obligations | 2.90% | 2.95% | 2.87% | 2.88% | 3.07% | 2.82% |
| Discount rate – interest costs | 2.32 | 2.38 | 2.30 | 2.27 | 2.55 | 2.17 |
| Discount rate – service costs | 3.26 | 3.30 | 3.27 | 3.26 | 3.25 | 3.22 |
| Expected long-term return on plan assets | 7.21 | 7.54 | 6.88 | 7.22 | — | 6.08 |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
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| 2021 | ||||||
|---|---|---|---|---|---|---|
| Assumptions used to determine net periodic costs: | Southern Company | AlabamaPower | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas |
| Pension plans | ||||||
| Discount rate – benefit obligations | 2.81% | 2.85% | 2.79% | 2.80% | 2.99% | 2.75% |
| Discount rate – interest costs | 2.13 | 2.17 | 2.09 | 2.12 | 2.46 | 2.10 |
| Discount rate – service costs | 3.18 | 3.23 | 3.21 | 3.20 | 3.22 | 2.97 |
| Expected long-term return on plan assets | 8.25 | 8.25 | 8.25 | 8.25 | 8.25 | 8.25 |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
| Other postretirement benefit plans | ||||||
| Discount rate – benefit obligations | 2.56% | 2.63% | 2.52% | 2.53% | 2.78% | 2.46% |
| Discount rate – interest costs | 1.84 | 1.91 | 1.82 | 1.78 | 2.12 | 1.64 |
| Discount rate – service costs | 3.07 | 3.13 | 3.08 | 3.06 | 3.05 | 3.01 |
| Expected long-term return on plan assets | 7.09 | 7.18 | 6.84 | 6.98 | — | 6.54 |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
| 2023 | ||||||
|---|---|---|---|---|---|---|
| Assumptions used to determine benefit obligations: | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas |
| Pension plans | ||||||
| Discount rate | 5.07% | 5.08% | 5.06% | 5.06% | 5.14% | 5.05% |
| Annual salary increase | 4.60 | 4.60 | 4.60 | 4.60 | 4.60 | 4.60 |
| Other postretirement benefit plans | ||||||
| Discount rate | 4.99% | 5.01% | 4.98% | 4.98% | 5.06% | 4.98% |
| Annual salary increase | 4.60 | 4.60 | 4.60 | 4.60 | 4.60 | 4.60 |
| 2022 | ||||||
|---|---|---|---|---|---|---|
| Assumptions used to determine benefit obligations: | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas |
| Pension plans | ||||||
| Discount rate | 5.25% | 5.26% | 5.25% | 5.25% | 5.31% | 5.24% |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
| Other postretirement benefit plans | ||||||
| Discount rate | 5.18% | 5.20% | 5.17% | 5.17% | 5.24% | 5.16% |
| Annual salary increase | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 | 4.80 |
The Registrants estimate the expected rate of return on pension plan and other postretirement benefit plan assets using a financial model to project the expected return on each current investment portfolio. The analysis projects an expected rate of return on each of the different asset classes in order to arrive at the expected return on the entire portfolio relying on each trust's target asset allocation and reasonable capital market assumptions. The financial model is based on four key inputs: anticipated returns by asset class (based in part on historical returns), each trust's target asset allocation, an anticipated inflation rate, and the projected impact of a periodic rebalancing of each trust's portfolio. The Registrants set the expected rate of return assumption using an arithmetic mean which represents the expected simple average return to be earned by the pension plan assets over any one year. The Registrants believe the use of the arithmetic mean is more compatible with the expected rate of return's function of estimating a single year's investment return.
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An additional assumption used in measuring the accumulated other postretirement benefit obligations (APBO) was a weighted average medical care cost trend rate. The weighted average medical care cost trend rates used in measuring the APBO for the Registrants at December 31, 2023 were as follows:
| Initial Cost Trend Rate | Ultimate Cost Trend Rate | Year That Ultimate Rate is Reached | |
|---|---|---|---|
| Pre-65 | 7.00% | 4.50% | 2032 |
| Post-65 medical | 5.50 | 4.50 | 2032 |
| Post-65 prescription | 8.50 | 4.50 | 2032 |
Pension Plans
The total accumulated benefit obligation for the pension plans at December 31, 2023 and 2022 was as follows:
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| December 31, 2023 | $11,991 | $2,746 | $3,674 | $546 | $145 | $808 |
| December 31, 2022 | 11,422 | 2,601 | 3,534 | 520 | 135 | 801 |
An actuarial loss of $0.5 billion and an actuarial gain of $3.9 billion were recorded for the annual remeasurement of the Southern Company system pension plans at December 31, 2023 and 2022, respectively, primarily due to a decrease of 18 basis points and an increase of 216 basis points, respectively, in the overall discount rate used to calculate the benefit obligation as a result of higher market interest rates.
Changes in the projected benefit obligations and the fair value of plan assets during the plan years ended December 31, 2023 and 2022 were as follows:
| 2023 | ||||||
|---|---|---|---|---|---|---|
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
| (in millions) | ||||||
| Change in benefit obligation | ||||||
| Benefit obligation at beginning of year | $12,602 | $2,906 | $3,851 | $569 | $163 | $868 |
| Service cost | 275 | 64 | 68 | 11 | 6 | 24 |
| Interest cost | 626 | 145 | 191 | 28 | 8 | 42 |
| Benefits paid | (744) | (155) | (224) | (32) | (6) | (104) |
| Actuarial loss | 493 | 116 | 123 | 23 | 6 | 52 |
| Balance at end of year | 13,252 | 3,076 | 4,009 | 599 | 177 | 882 |
| Change in plan assets | ||||||
| Fair value of plan assets at beginning of year | 14,218 | 3,427 | 4,456 | 649 | 178 | 1,002 |
| Actual return on plan assets | 1,092 | 260 | 331 | 50 | 12 | 79 |
| Employer contributions | 52 | 11 | 9 | 2 | 2 | 3 |
| Benefits paid | (744) | (154) | (225) | (32) | (7) | (104) |
| Fair value of plan assets at end of year | 14,618 | 3,544 | 4,571 | 669 | 185 | 980 |
| Accrued asset | $1,366 | $468 | $562 | $70 | $8 | $98 |
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| 2022 | ||||||
|---|---|---|---|---|---|---|
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
| (in millions) | ||||||
| Change in benefit obligation | ||||||
| Benefit obligation at beginning of year | $16,382 | $3,806 | $5,012 | $743 | $222 | $1,134 |
| Service cost | 412 | 99 | 103 | 17 | 9 | 34 |
| Interest cost | 408 | 96 | 123 | 18 | 6 | 28 |
| Benefits paid | (692) | (144) | (226) | (30) | (5) | (75) |
| Actuarial gain | (3,908) | (951) | (1,161) | (179) | (69) | (253) |
| Balance at end of year | 12,602 | 2,906 | 3,851 | 569 | 163 | 868 |
| Change in plan assets | ||||||
| Fair value of plan assets at beginning of year | 17,225 | 4,141 | 5,415 | 786 | 213 | 1,241 |
| Actual loss on plan assets | (2,376) | (579) | (753) | (110) | (31) | (167) |
| Employer contributions | 61 | 9 | 20 | 3 | 1 | 3 |
| Benefits paid | (692) | (144) | (226) | (30) | (5) | (75) |
| Fair value of plan assets at end of year | 14,218 | 3,427 | 4,456 | 649 | 178 | 1,002 |
| Accrued asset | $1,616 | $521 | $605 | $80 | $15 | $134 |
The projected benefit obligations for the qualified and non-qualified pension plans at December 31, 2023 are shown in the following table. All pension plan assets are related to the qualified pension plan.
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| Projected benefit obligations: | ||||||
| Qualified pension plan | $12,540 | $2,959 | $3,865 | $569 | $154 | $822 |
| Non-qualified pension plan | 713 | 117 | 145 | 29 | 22 | 60 |
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Amounts recognized in the balance sheets at December 31, 2023 and 2022 related to the Registrants' pension plans consist of the following:
| SouthernCompany | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| December 31, 2023: | ||||||
| Prepaid pension costs(a) | $2,079 | $585 | $706 | $99 | $31 | $158 |
| Other regulatory assets, deferred(b) | 2,960 | 821 | 1,051 | 152 | — | 143 |
| Other current liabilities | (64) | (11) | (13) | (2) | (2) | (3) |
| Employee benefit obligations(c) | (649) | (106) | (131) | (27) | (21) | (58) |
| Other regulatory liabilities, deferred | (47) | — | — | — | — | — |
| AOCI | 79 | — | — | — | 20 | (45) |
| December 31, 2022: | ||||||
| Prepaid pension costs(a) | $2,290 | $629 | $738 | $108 | $37 | $183 |
| Other regulatory assets, deferred(b) | 2,455 | 679 | 887 | 123 | — | 111 |
| Other current liabilities | (56) | (10) | (12) | (2) | (2) | (3) |
| Employee benefit obligations(c) | (618) | (98) | (121) | (26) | (20) | (42) |
| Other regulatory liabilities, deferred | (85) | — | — | — | — | — |
| AOCI | 24 | — | — | — | 11 | (75) |
(a)Included in prepaid pension and other postretirement benefit costs on Alabama Power's balance sheet and other deferred charges and assets on Southern Power's consolidated balance sheet.
(b)Amounts for Southern Company exclude regulatory assets of $173 million and $190 million at December 31, 2023 and 2022, respectively, associated with unamortized amounts in Southern Company Gas' pension plans prior to its acquisition by Southern Company.
(c)Included in other deferred credits and liabilities on Southern Power's consolidated balance sheets.
Presented below are the amounts included in regulatory assets at December 31, 2023 and 2022 related to the portion of the defined benefit pension plan attributable to Southern Company, the traditional electric operating companies, and Southern Company Gas that had not yet been recognized in net periodic pension cost.
| SouthernCompany | Alabama Power | GeorgiaPower | Mississippi Power | Southern Company Gas | |
|---|---|---|---|---|---|
| (in millions) | |||||
| Regulatory assets: | |||||
| Prior service cost | $9 | $4 | $6 | $1 | $(7) |
| Net loss | 2,904 | 817 | 1,045 | 151 | 100 |
| Regulatory amortization | — | — | — | — | 50 |
| Total regulatory assets(*) | $2,913 | $821 | $1,051 | $152 | $143 |
| Regulatory assets: | |||||
| Prior service cost | $10 | $4 | $7 | $1 | $(9) |
| Net loss | 2,361 | 675 | 880 | 122 | 66 |
| Regulatory amortization | — | — | — | — | 54 |
| Total regulatory assets(*) | $2,371 | $679 | $887 | $123 | $111 |
(*)Amounts for Southern Company exclude regulatory assets of $173 million and $190 million at December 31, 2023 and 2022, respectively, associated with unamortized amounts in Southern Company Gas' pension plans prior to its acquisition by Southern Company.
II-206
The changes in the balance of regulatory assets related to the portion of the defined benefit pension plan attributable to Southern Company, the traditional electric operating companies, and Southern Company Gas for the years ended December 31, 2023 and 2022 are presented in the following table:
| SouthernCompany | Alabama Power | GeorgiaPower | Mississippi Power | Southern Company Gas | |
|---|---|---|---|---|---|
| (in millions) | |||||
| Regulatory assets (liabilities):(*) | |||||
| Balance at December 31, 2021 | $2,801 | $809 | $971 | $146 | $91 |
| Net (gain) loss | (183) | (67) | (9) | (12) | 27 |
| Reclassification adjustments: | |||||
| Amortization of prior service costs | (1) | (1) | (1) | — | 2 |
| Amortization of net gain (loss) | (246) | (62) | (74) | (11) | 1 |
| Amortization of regulatory assets(*) | — | — | — | — | (10) |
| Total reclassification adjustments | (247) | (63) | (75) | (11) | (7) |
| Total change | (430) | (130) | (84) | (23) | 20 |
| Balance at December 31, 2022 | $2,371 | $679 | $887 | $123 | $111 |
| Net loss | 576 | 153 | 178 | 31 | 34 |
| Reclassification adjustments: | |||||
| Amortization of prior service costs | (1) | (1) | (1) | — | 2 |
| Amortization of net loss | (33) | (10) | (13) | (2) | — |
| Amortization of regulatory assets(*) | — | — | — | — | (4) |
| Total reclassification adjustments | (34) | (11) | (14) | (2) | (2) |
| Total change | 542 | 142 | 164 | 29 | 32 |
| Balance at December 31, 2023 | $2,913 | $821 | $1,051 | $152 | $143 |
(*)Amounts for Southern Company exclude regulatory assets of $173 million and $190 million at December 31, 2023 and 2022, respectively, associated with unamortized amounts in Southern Company Gas' pension plans prior to its acquisition by Southern Company.
Presented below are the amounts included in AOCI at December 31, 2023 and 2022 related to the portion of the defined benefit pension plan attributable to Southern Company, Southern Power, and Southern Company Gas that had not yet been recognized in net periodic pension cost.
| SouthernCompany | SouthernPower | Southern CompanyGas | |
|---|---|---|---|
| (in millions) | |||
| AOCI: | |||
| Prior service cost | $(1) | $— | $(2) |
| Net (gain) loss | 80 | 20 | (43) |
| Total AOCI | $79 | $20 | $(45) |
| AOCI: | |||
| Prior service cost | $(2) | $— | $(3) |
| Net (gain) loss | 26 | 11 | (72) |
| Total AOCI | $24 | $11 | $(75) |
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The components of OCI related to the portion of the defined benefit pension plan attributable to Southern Company, Southern Power, and Southern Company Gas for the years ended December 31, 2023 and 2022 are presented in the following table:
| Southern Company | SouthernPower | Southern CompanyGas | |
|---|---|---|---|
| (in millions) | |||
| AOCI: | |||
| Balance at December 31, 2021 | $100 | $35 | $(45) |
| Net gain | (82) | (22) | (30) |
| Reclassification adjustments: | |||
| Amortization of net gain (loss) | 6 | (2) | — |
| Total change | (76) | (24) | (30) |
| Balance at December 31, 2022 | $24 | $11 | $(75) |
| Net loss | 62 | 9 | 29 |
| Reclassification adjustments: | |||
| Amortization of prior service costs | 1 | — | 1 |
| Amortization of net loss | (8) | — | — |
| Total reclassification adjustments | (7) | — | 1 |
| Total change | 55 | 9 | 30 |
| Balance at December 31, 2023 | $79 | $20 | $(45) |
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Components of net periodic pension cost for the Registrants were as follows:
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| Service cost | $275 | $64 | $68 | $11 | $6 | $24 |
| Interest cost | 626 | 145 | 191 | 28 | 8 | 42 |
| Expected return on plan assets | (1,229) | (297) | (385) | (56) | (15) | (85) |
| Recognized net (gain) loss | 32 | 9 | 13 | 2 | — | (5) |
| Net amortization | — | 1 | 1 | — | — | 15 |
| Prior service cost | — | — | — | — | — | (3) |
| Net periodic pension cost (income) | $(296) | $(78) | $(112) | $(15) | $(1) | $(12) |
| Service cost | $412 | $99 | $103 | $17 | $9 | $34 |
| Interest cost | 408 | 96 | 123 | 18 | 6 | 28 |
| Expected return on plan assets | (1,265) | (306) | (399) | (57) | (15) | (91) |
| Recognized net loss | 240 | 62 | 75 | 11 | 2 | 8 |
| Net amortization | — | 1 | 1 | — | — | 15 |
| Prior service cost | — | — | — | — | — | (3) |
| Net periodic pension cost (income) | $(205) | $(48) | $(97) | $(11) | $2 | $(9) |
| Service cost | $434 | $102 | $112 | $18 | $10 | $37 |
| Interest cost | 346 | 82 | 104 | 16 | 5 | 24 |
| Expected return on plan assets | (1,191) | (287) | (375) | (55) | (14) | (86) |
| Recognized net loss | 314 | 82 | 100 | 15 | 3 | 13 |
| Net amortization | 1 | 1 | 1 | — | — | 15 |
| Prior service cost | — | — | — | — | — | (3) |
| Net periodic pension cost (income) | $(96) | $(20) | $(58) | $(6) | $4 | $— |
The service cost component of net periodic pension cost is included in operations and maintenance expenses and all other components of net periodic pension cost are included in other income (expense), net in the Registrants' statements of income.
Net periodic pension cost is the sum of service cost, interest cost, and other costs netted against the expected return on plan assets. The expected return on plan assets is determined by multiplying the expected rate of return on plan assets and the market-related value of plan assets. In determining the market-related value of plan assets, the Registrants have elected to amortize changes in the market value of return-seeking plan assets over five years and to recognize the changes in the market value of liability-hedging plan assets immediately. Given the significant concentration in return-seeking plan assets, the accounting value of plan assets that is used to calculate the expected return on plan assets differs from the current fair value of the plan assets.
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Future benefit payments reflect expected future service and are estimated based on assumptions used to measure the projected benefit obligation for the pension plans. At December 31, 2023, estimated benefit payments were as follows:
| Southern Company · Alabama Power · GeorgiaPower · Mississippi Power · Southern Power · Southern Company Gas | ||||||
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| Benefit Payments: | ||||||
| 2024 | $748 | $164 | $241 | $33 | $7 | $57 |
| 2025 | 776 | 171 | 248 | 34 | 7 | 59 |
| 2026 | 801 | 177 | 254 | 36 | 8 | 60 |
| 2027 | 822 | 182 | 257 | 37 | 8 | 62 |
| 2028 | 840 | 187 | 260 | 38 | 7 | 64 |
| 2029 to 2033 | 4,417 | 988 | 1,337 | 201 | 47 | 336 |
Other Postretirement Benefits
Changes in the APBO and the fair value of the Registrants' plan assets during the plan years ended December 31, 2023 and 2022 were as follows:
| 2023 | ||||||
|---|---|---|---|---|---|---|
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
| (in millions) | ||||||
| Change in benefit obligation | ||||||
| Benefit obligation at beginning of year | $1,441 | $344 | $514 | $59 | $9 | $179 |
| Service cost | 15 | 4 | 4 | 1 | — | 1 |
| Interest cost | 70 | 17 | 25 | 3 | — | 9 |
| Benefits paid | (107) | (24) | (36) | (4) | (1) | (18) |
| Actuarial (gain) loss | (33) | (12) | (18) | (2) | 1 | 1 |
| Balance at end of year | 1,386 | 329 | 489 | 57 | 9 | 172 |
| Change in plan assets | ||||||
| Fair value of plan assets at beginning of year | 998 | 372 | 368 | 24 | — | 113 |
| Actual return on plan assets | 131 | 52 | 51 | 2 | — | 19 |
| Employer contributions | 73 | 3 | 27 | 3 | 1 | 14 |
| Benefits paid | (107) | (24) | (36) | (4) | (1) | (18) |
| Fair value of plan assets at end of year | 1,095 | 403 | 410 | 25 | — | 128 |
| Accrued asset (liability) | $(291) | $74 | $(79) | $(32) | $(9) | $(44) |
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| 2022 | ||||||
|---|---|---|---|---|---|---|
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
| (in millions) | ||||||
| Change in benefit obligation | ||||||
| Benefit obligation at beginning of year | $1,849 | $440 | $656 | $76 | $11 | $237 |
| Service cost | 23 | 6 | 6 | 1 | — | 1 |
| Interest cost | 42 | 10 | 15 | 2 | — | 5 |
| Benefits paid | (109) | (23) | (38) | (4) | (1) | (18) |
| Actuarial gain | (365) | (89) | (125) | (16) | (1) | (46) |
| Retiree drug subsidy | 1 | — | — | — | — | — |
| Balance at end of year | 1,441 | 344 | 514 | 59 | 9 | 179 |
| Change in plan assets | ||||||
| Fair value of plan assets at beginning of year | 1,251 | 489 | 450 | 29 | — | 143 |
| Actual loss on plan assets | (218) | (98) | (71) | (4) | — | (25) |
| Employer contributions | 73 | 4 | 27 | 3 | 1 | 13 |
| Benefits paid | (108) | (23) | (38) | (4) | (1) | (18) |
| Fair value of plan assets at end of year | 998 | 372 | 368 | 24 | — | 113 |
| Accrued asset (liability) | $(443) | $28 | $(146) | $(35) | $(9) | $(66) |
Amounts recognized in the balance sheets at December 31, 2023 and 2022 related to the Registrants' other postretirement benefit plans consist of the following:
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | SouthernPower | Southern Company Gas | |
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| December 31, 2023: | ||||||
| Prepaid other postretirement benefit costs(a) | $— | $74 | $— | $— | $— | $— |
| Other regulatory assets, deferred(b) | 23 | — | 11 | — | — | — |
| Other current liabilities | (6) | — | — | — | (1) | — |
| Employee benefit obligations(c) | (285) | — | (79) | (32) | (8) | (44) |
| Other regulatory liabilities, deferred | (231) | (48) | (85) | (10) | — | (68) |
| AOCI | (9) | — | — | — | 1 | (10) |
| December 31, 2022: | ||||||
| Prepaid other postretirement benefit costs(a) | $— | $28 | $— | $— | $— | $— |
| Other regulatory assets, deferred(b) | 34 | — | 19 | — | — | — |
| Other current liabilities | (6) | — | — | — | (1) | — |
| Employee benefit obligations(c) | (437) | — | (146) | (35) | (8) | (66) |
| Other regulatory liabilities, deferred | (170) | (21) | (58) | (9) | — | (58) |
| AOCI | (4) | — | — | — | — | (2) |
(a)Included in prepaid pension and other postretirement benefit costs on Alabama Power's balance sheet.
(b)Amounts for Southern Company exclude regulatory assets of $24 million and $32 million at December 31, 2023 and 2022, respectively, associated with unamortized amounts in Southern Company Gas' other postretirement benefit plans prior to its acquisition by Southern Company.
(c)Included in other deferred credits and liabilities on Southern Power's consolidated balance sheets.
II-211
Presented below are the amounts included in net regulatory assets (liabilities) at December 31, 2023 and 2022 related to the other postretirement benefit plans of Southern Company, the traditional electric operating companies, and Southern Company Gas that had not yet been recognized in net periodic other postretirement benefit cost.
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Company Gas | |
|---|---|---|---|---|---|
| (in millions) | |||||
| Balance at December 31, 2023: | |||||
| Regulatory assets (liabilities): | |||||
| Prior service cost | $13 | $4 | $5 | $1 | $— |
| Net gain | (216) | (52) | (79) | (11) | (64) |
| Regulatory amortization | — | — | — | — | (4) |
| Total regulatory assets (liabilities)(*) | $(203) | $(48) | $(74) | $(10) | $(68) |
| Balance at December 31, 2022: | |||||
| Regulatory assets (liabilities): | |||||
| Prior service cost | $14 | $4 | $6 | $1 | $1 |
| Net gain | (150) | (25) | (45) | (10) | (64) |
| Regulatory amortization | — | — | — | — | 5 |
| Total regulatory assets (liabilities)(*) | $(136) | $(21) | $(39) | $(9) | $(58) |
(*)Amounts for Southern Company exclude regulatory assets of $24 million and $32 million at December 31, 2023 and 2022, respectively, associated with unamortized amounts in Southern Company Gas' other postretirement benefit plans prior to its acquisition by Southern Company.
The changes in the balance of net regulatory assets (liabilities) related to the other postretirement benefit plans for the plan years ended December 31, 2023 and 2022 are presented in the following table:
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Company Gas | |
|---|---|---|---|---|---|
| (in millions) | |||||
| Net regulatory assets (liabilities):(*) | |||||
| Balance at December 31, 2021 | $(74) | $(62) | $(10) | $1 | $(34) |
| Net (gain) loss | (64) | 41 | (27) | (10) | (13) |
| Reclassification adjustments: | |||||
| Amortization of prior service costs | 1 | — | — | — | — |
| Amortization of net gain (loss) | 1 | — | (2) | — | — |
| Amortization of regulatory assets(*) | — | — | — | — | (11) |
| Total reclassification adjustments | 2 | — | (2) | — | (11) |
| Total change | (62) | 41 | (29) | (10) | (24) |
| Balance at December 31, 2022 | $(136) | $(21) | $(39) | $(9) | $(58) |
| Net gain | (77) | (30) | (38) | (1) | — |
| Reclassification adjustments: | |||||
| Amortization of prior service costs | (1) | — | (1) | — | — |
| Amortization of net gain | 6 | 3 | 4 | — | — |
| Amortization of regulatory assets(*) | — | — | — | — | (10) |
| Total reclassification adjustments | 5 | 3 | 3 | — | (10) |
| Total change | (72) | (27) | (35) | (1) | (10) |
| Balance at December 31, 2023 | $(208) | $(48) | $(74) | $(10) | $(68) |
(*)Amounts for Southern Company exclude regulatory assets of $24 million and $32 million at December 31, 2023 and 2022, respectively, associated with unamortized amounts in Southern Company Gas' other postretirement benefit plans prior to its acquisition by Southern Company.
II-212
Presented below are the amounts included in AOCI at December 31, 2023 and 2022 related to the other postretirement benefit plans of Southern Company, Southern Power, and Southern Company Gas that had not yet been recognized in net periodic other postretirement benefit cost.
| SouthernCompany | SouthernPower | Southern CompanyGas | |
|---|---|---|---|
| (in millions) | |||
| AOCI: | |||
| Prior service cost | $1 | $— | $— |
| Net (gain) loss | (10) | 1 | (10) |
| Total AOCI | $(9) | $1 | $(10) |
| AOCI: | |||
| Prior service cost | $1 | $— | $— |
| Net (gain) loss | (5) | — | (2) |
| Total AOCI | $(4) | $— | $(2) |
The components of OCI related to the other postretirement benefit plans for the plan years ended December 31, 2023 and 2022 are presented in the following table:
| Southern Company | SouthernPower | Southern Company Gas | |
|---|---|---|---|
| (in millions) | |||
| AOCI: | |||
| Balance at December 31, 2021 | $— | $2 | $(5) |
| Net gain | (3) | (2) | — |
| Reclassification adjustments: | |||
| Amortization of net gain (loss) | (1) | — | 3 |
| Total change | (4) | (2) | 3 |
| Balance at December 31, 2022 | $(4) | $— | $(2) |
| Net (gain) loss | (12) | 1 | — |
| Reclassification adjustments: | |||
| Amortization of net gain (loss) | 7 | — | (8) |
| Total change | (5) | 1 | (8) |
| Balance at December 31, 2023 | $(9) | $1 | $(10) |
II-213
Components of the other postretirement benefit plans' net periodic cost for the Registrants were as follows:
| Southern Company | Alabama Power | GeorgiaPower | Mississippi Power | Southern Power | Southern Company Gas | |
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| Service cost | $15 | $4 | $4 | $1 | $— | $1 |
| Interest cost | 70 | 17 | 25 | 3 | — | 9 |
| Expected return on plan assets | (83) | (33) | (29) | (3) | 1 | (10) |
| Net amortization | (11) | (3) | (3) | — | — | 6 |
| Net periodic postretirement benefit cost (income) | $(9) | $(15) | $(3) | $1 | $1 | $6 |
| Service cost | $23 | $6 | $6 | $1 | $— | $1 |
| Interest cost | 42 | 10 | 15 | 2 | — | 5 |
| Expected return on plan assets | (80) | (32) | (28) | (2) | 1 | (9) |
| Net amortization | (1) | — | 2 | — | — | 6 |
| Net periodic postretirement benefit cost (income) | $(16) | $(16) | $(5) | $1 | $1 | $3 |
| Service cost | $24 | $6 | $7 | $1 | $— | $2 |
| Interest cost | 35 | 9 | 12 | 1 | — | 4 |
| Expected return on plan assets | (76) | (30) | (26) | (1) | 1 | (10) |
| Net amortization | 2 | — | 2 | — | — | 6 |
| Net periodic postretirement benefit cost (income) | $(15) | $(15) | $(5) | $1 | $1 | $2 |
The service cost component of net periodic postretirement benefit cost is included in operations and maintenance expenses and all other components of net periodic postretirement benefit cost are included in other income (expense), net in the Registrants' statements of income.
The Registrants' future benefit payments, including prescription drug benefits, are provided in the table below. These amounts reflect expected future service and are estimated based on assumptions used to measure the APBO for the other postretirement benefit plans.
| Southern Company · Alabama Power · GeorgiaPower · Mississippi Power · Southern Power · Southern Company Gas | ||||||
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| Benefit payments: | ||||||
| 2024 | $111 | $24 | $40 | $5 | $1 | $17 |
| 2025 | 109 | 24 | 39 | 5 | 1 | 17 |
| 2026 | 108 | 24 | 38 | 5 | 1 | 16 |
| 2027 | 108 | 24 | 38 | 5 | 1 | 16 |
| 2028 | 108 | 25 | 38 | 4 | 1 | 15 |
| 2029 to 2033 | 523 | 123 | 188 | 21 | 1 | 64 |
II-214
Benefit Plan Assets
Pension plan and other postretirement benefit plan assets are managed and invested in accordance with all applicable requirements, including ERISA and the Internal Revenue Code. The Registrants' investment policies for both the pension plans and the other postretirement benefit plans cover a diversified mix of assets as described below. Derivative instruments may be used to gain efficient exposure to the various asset classes and as hedging tools. Additionally, the Registrants minimize the risk of large losses primarily through diversification but also monitor and manage other aspects of risk.
The investment strategy for plan assets related to the Southern Company system's qualified pension plan is to be broadly diversified across major asset classes. The asset allocation is established after consideration of various factors that affect the assets and liabilities of the pension plan including, but not limited to, historical and expected returns and interest rates, volatility, correlations of asset classes, the current level of assets and liabilities, and the assumed growth in assets and liabilities. Because a significant portion of the liability of the pension plan is long-term in nature, the assets are invested consistent with long-term investment expectations for return and risk. To manage the actual asset class exposures relative to the target asset allocation, the Southern Company system employs a formal rebalancing program. As additional risk management, external investment managers and service providers are subject to written guidelines to ensure appropriate and prudent investment practices. Management believes the portfolio is well-diversified with no significant concentrations of risk.
II-215
Investment Strategies and Benefit Plan Asset Fair Values
A description of the major asset classes that the pension and other postretirement benefit plans are comprised of, along with the valuation methods used for fair value measurement, is provided below:
| Description | Valuation Methodology |
|---|---|
| Domestic equity: A mix of large and small capitalization stocks with generally an equal distribution of value and growth attributes, managed both actively and through passive index approaches.International equity: A mix of large and small capitalization growth and value stocks with developed and emerging markets exposure, managed both actively and through fundamental indexing approaches. | Domestic and international equities such as common stocks, American depositary receipts, and real estate investment trusts that trade on public exchanges are classified as Level 1 investments and are valued at the closing price in the active market. Equity funds with unpublished prices that are comprised of publicly traded securities (such as commingled/pooled funds) are also valued at the closing price in the active market, but are classified as Level 2. |
| Fixed income: A mix of domestic and international bonds. | Investments in fixed income securities, including fixed income pooled funds, are generally classified as Level 2 investments and are valued based on prices reported in the market place. Additionally, the value of fixed income securities takes into consideration certain items such as broker quotes, spreads, yield curves, interest rates, and discount rates that apply to the term of a specific instrument. |
| Trust-owned life insurance (TOLI): Investments of taxable trusts aimed at minimizing the impact of taxes on the portfolio. | Investments in TOLI policies are classified as Level 2 investments and are valued based on the underlying investments held in the policy's separate accounts. The underlying assets are equity and fixed income pooled funds that are comprised of Level 1 and Level 2 securities. |
| Real estate: Investments in equity or debt of real properties and in publicly traded real estate securities.Special situations: Investments in opportunistic strategies with the objective of diversifying and enhancing returns and exploiting short-term inefficiencies, as well as investments in promising new strategies of a longer-term nature.Private equity: Investments in private or public securities typically through privately-negotiated and/or structured transactions, including leveraged buyouts, venture capital, and distressed debt. Private credit: Investments focused on debt instruments, of which returns are driven by income rather than capital appreciation.Infrastructure: Investments in real assets, typically with long-term, predictable, and stable cash flows and a meaningful income component. | Investments in real estate, special situations, private equity, private credit, and infrastructure are typically invested in private partnerships and/or other pooled vehicles (Funds) which are generally classified as Net Asset Value as a Practical Expedient, since the Funds and underlying assets are not publicly traded and/or often have liquidity restrictions. The managers of the Funds value the assets using various inputs and techniques depending on the nature of the underlying investments. Techniques may include purchase multiples for comparable transactions, comparable public company trading multiples, discounted cash flow analysis, prevailing market capitalization rates, recent sales of comparable investments, and independent third-party appraisals. The total market value of each of the Funds is determined by aggregating the value of the underlying assets less liabilities. |
For purposes of determining the fair value of the pension plan and other postretirement benefit plan assets and the appropriate level designation, management relies on information provided by the plan's trustee. This information is reviewed and evaluated by management with changes made to the trustee information as appropriate. The fair values presented herein exclude cash, receivables related to investment income and pending investment sales, and payables related to pending investment purchases.
The fair values, and actual allocations relative to the target allocations, of the Southern Company system's pension plans at December 31, 2023 and 2022 are presented below.
II-216
| Fair Value Measurements Using | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · SignificantUnobservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | |||||||||
| At December 31, 2023: · (Level 1) · (Level 2) · (Level 3) · (NAV) · Total | |||||||||
| (in millions) | |||||||||
| Southern Company | |||||||||
| Assets: | |||||||||
| Equity: | 41% | 40% | |||||||
| Domestic equity | $1,959 | $771 | $— | $— | $2,730 | ||||
| International equity | 1,947 | 1,052 | — | — | 2,999 | ||||
| Fixed income: | 30 | 32 | |||||||
| U.S. Treasury, government, and agency bonds | — | 1,973 | — | — | 1,973 | ||||
| Mortgage- and asset-backed securities | — | 44 | — | — | 44 | ||||
| Corporate bonds | — | 1,724 | — | — | 1,724 | ||||
| Pooled funds | — | 777 | — | — | 777 | ||||
| Cash equivalents and other | 371 | 58 | — | — | 429 | ||||
| Real estate investments | 369 | — | — | 1,684 | 2,053 | 12 | 14 | ||
| Special situations | — | — | — | 245 | 245 | 3 | 2 | ||
| Private equity | — | — | — | 1,761 | 1,761 | 9 | 12 | ||
| Private credit | — | — | — | 25 | 25 | 3 | — | ||
| Infrastructure | — | — | — | — | — | 2 | — | ||
| Total | $4,646 | $6,399 | $— | $3,715 | $14,760 | 100% | 100% | ||
| Alabama Power | |||||||||
| Assets: | |||||||||
| Equity: | 41% | 40% | |||||||
| Domestic equity | $476 | $187 | $— | $— | $663 | ||||
| International equity | 472 | 255 | — | — | 727 | ||||
| Fixed income: | 30 | 32 | |||||||
| U.S. Treasury, government, and agency bonds | — | 479 | — | — | 479 | ||||
| Mortgage- and asset-backed securities | — | 11 | — | — | 11 | ||||
| Corporate bonds | — | 418 | — | — | 418 | ||||
| Pooled funds | — | 188 | — | — | 188 | ||||
| Cash equivalents and other | 90 | 14 | — | — | 104 | ||||
| Real estate investments | 89 | — | — | 408 | 497 | 12 | 14 | ||
| Special situations | — | — | — | 59 | 59 | 3 | 2 | ||
| Private equity | — | — | — | 427 | 427 | 9 | 12 | ||
| Private credit | — | — | — | 6 | 6 | 3 | — | ||
| Infrastructure | — | — | — | — | — | 2 | — | ||
| Total | $1,127 | $1,552 | $— | $900 | $3,579 | 100% | 100% | ||
II-217
| Fair Value Measurements Using | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · SignificantUnobservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | |||||||||
| At December 31, 2023: · (Level 1) · (Level 2) · (Level 3) · (NAV) · Total | |||||||||
| (in millions) | |||||||||
| Georgia Power | |||||||||
| Assets: | |||||||||
| Equity: | 41% | 40% | |||||||
| Domestic equity | $611 | $241 | $— | $— | $852 | ||||
| International equity | 609 | 329 | — | — | 938 | ||||
| Fixed income: | 30 | 32 | |||||||
| U.S. Treasury, government, and agency bonds | — | 617 | — | — | 617 | ||||
| Mortgage- and asset-backed securities | — | 14 | — | — | 14 | ||||
| Corporate bonds | — | 539 | — | — | 539 | ||||
| Pooled funds | — | 243 | — | — | 243 | ||||
| Cash equivalents and other | 116 | 18 | — | — | 134 | ||||
| Real estate investments | 115 | — | — | 527 | 642 | 12 | 14 | ||
| Special situations | — | — | — | 77 | 77 | 3 | 2 | ||
| Private equity | — | — | — | 551 | 551 | 9 | 12 | ||
| Private credit | — | — | — | 8 | 8 | 3 | — | ||
| Infrastructure | — | — | — | — | — | 2 | — | ||
| Total | $1,451 | $2,001 | $— | $1,163 | $4,615 | 100% | 100% | ||
| Mississippi Power | |||||||||
| Assets: | |||||||||
| Equity: | 41% | 40% | |||||||
| Domestic equity | $89 | $35 | $— | $— | $124 | ||||
| International equity | 89 | 48 | — | — | 137 | ||||
| Fixed income: | 30 | 32 | |||||||
| U.S. Treasury, government, and agency bonds | — | 90 | — | — | 90 | ||||
| Mortgage- and asset-backed securities | — | 2 | — | — | 2 | ||||
| Corporate bonds | — | 79 | — | — | 79 | ||||
| Pooled funds | — | 36 | — | — | 36 | ||||
| Cash equivalents and other | 17 | 3 | — | — | 20 | ||||
| Real estate investments | 17 | — | — | 77 | 94 | 12 | 14 | ||
| Special situations | — | — | — | 11 | 11 | 3 | 2 | ||
| Private equity | — | — | — | 81 | 81 | 9 | 12 | ||
| Private credit | — | — | — | 1 | 1 | 3 | — | ||
| Infrastructure | — | — | — | — | — | 2 | — | ||
| Total | $212 | $293 | $— | $170 | $675 | 100% | 100% | ||
II-218
| Fair Value Measurements Using | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · SignificantUnobservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | ||||||||||
| At December 31, 2023: · (Level 1) · (Level 2) · (Level 3) · (NAV) · Total | ||||||||||
| (in millions) | ||||||||||
| Southern Power | ||||||||||
| Assets: | ||||||||||
| Equity: | 41% | 40% | ||||||||
| Domestic equity | $24 | $10 | $— | $— | $34 | |||||
| International equity | 25 | 13 | — | — | 38 | |||||
| Fixed income: | 30 | 32 | ||||||||
| U.S. Treasury, government, and agency bonds | — | 25 | — | — | 25 | |||||
| Mortgage- and asset-backed securities | — | 1 | — | — | 1 | |||||
| Corporate bonds | — | 22 | — | — | 22 | |||||
| Pooled funds | — | 10 | — | — | 10 | |||||
| Cash equivalents and other | 5 | 1 | — | — | 6 | |||||
| Real estate investments | 5 | — | — | 21 | 26 | 12 | 14 | |||
| Special situations | — | — | — | 3 | 3 | 3 | 2 | |||
| Private equity | — | — | — | 22 | 22 | 9 | 12 | |||
| Private credit | — | — | — | — | — | 3 | — | |||
| Infrastructure | — | — | — | — | — | 2 | — | |||
| Total | $59 | $82 | $— | $46 | $187 | 100% | 100% | |||
| Southern Company Gas | ||||||||||
| Assets: | ||||||||||
| Equity: | 41% | 40% | ||||||||
| Domestic equity | $130 | $52 | $— | $— | $182 | |||||
| International equity | 130 | 71 | — | — | 201 | |||||
| Fixed income: | 30 | 32 | ||||||||
| U.S. Treasury, government, and agency bonds | — | 132 | — | — | 132 | |||||
| Mortgage- and asset-backed securities | — | 3 | — | — | 3 | |||||
| Corporate bonds | — | 116 | — | — | 116 | |||||
| Pooled funds | — | 52 | — | — | 52 | |||||
| Cash equivalents and other | 25 | 4 | — | — | 29 | |||||
| Real estate investments | 25 | — | — | 113 | 138 | 12 | 14 | |||
| Special situations | — | — | — | 16 | 16 | 3 | 2 | |||
| Private equity | — | — | — | 118 | 118 | 9 | 12 | |||
| Private credit | — | — | — | 2 | 2 | 3 | — | |||
| Infrastructure | — | — | — | — | — | 2 | — | |||
| Total | $310 | $430 | $— | $249 | $989 | 100% | 100% | |||
II-219
| Fair Value Measurements Using | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · SignificantUnobservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | |||||||||
| At December 31, 2022: · (Level 1) · (Level 2) · (Level 3) · (NAV) · Total | |||||||||
| (in millions) | |||||||||
| Southern Company | |||||||||
| Assets: | |||||||||
| Equity: | 45% | 43% | |||||||
| Domestic equity | $2,078 | $691 | $— | $— | $2,769 | ||||
| International equity | 2,166 | 1,090 | — | — | 3,256 | ||||
| Fixed income: | 30 | 28 | |||||||
| U.S. Treasury, government, and agency bonds | — | 1,469 | — | — | 1,469 | ||||
| Mortgage- and asset-backed securities | — | 29 | — | — | 29 | ||||
| Corporate bonds | — | 1,494 | — | — | 1,494 | ||||
| Pooled funds | — | 607 | — | — | 607 | ||||
| Cash equivalents and other | 399 | 7 | — | — | 406 | ||||
| Real estate investments | 376 | — | — | 1,887 | 2,263 | 13 | 15 | ||
| Special situations | — | — | — | 187 | 187 | 3 | 2 | ||
| Private equity | — | — | — | 1,717 | 1,717 | 9 | 12 | ||
| Total | $5,019 | $5,387 | $— | $3,791 | $14,197 | 100% | 100% | ||
| Liabilities: | |||||||||
| Derivatives | (4) | — | — | — | (4) | ||||
| Total | $5,015 | $5,387 | $— | $3,791 | $14,193 | 100% | 100% | ||
| Alabama Power | |||||||||
| Assets: | |||||||||
| Equity: | 45% | 43% | |||||||
| Domestic equity | $500 | $167 | $— | $— | $667 | ||||
| International equity | 522 | 263 | — | — | 785 | ||||
| Fixed income: | 30 | 28 | |||||||
| U.S. Treasury, government, and agency bonds | — | 354 | — | — | 354 | ||||
| Mortgage- and asset-backed securities | — | 7 | — | — | 7 | ||||
| Corporate bonds | — | 360 | — | — | 360 | ||||
| Pooled funds | — | 146 | — | — | 146 | ||||
| Cash equivalents and other | 96 | 2 | — | — | 98 | ||||
| Real estate investments | 91 | — | — | 455 | 546 | 13 | 15 | ||
| Special situations | — | — | — | 45 | 45 | 3 | 2 | ||
| Private equity | — | — | — | 414 | 414 | 9 | 12 | ||
| Total | $1,209 | $1,299 | $— | $914 | $3,422 | 100% | 100% | ||
| Liabilities: | |||||||||
| Derivatives | (1) | — | — | — | (1) | ||||
| Total | $1,208 | $1,299 | $— | $914 | $3,421 | 100% | 100% | ||
II-220
| Fair Value Measurements Using | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · SignificantUnobservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | |||||||||
| At December 31, 2022: · (Level 1) · (Level 2) · (Level 3) · (NAV) · Total | |||||||||
| (in millions) | |||||||||
| Georgia Power | |||||||||
| Assets: | |||||||||
| Equity: | 45% | 43% | |||||||
| Domestic equity | $651 | $217 | $— | $— | $868 | ||||
| International equity | 678 | 342 | — | — | 1,020 | ||||
| Fixed income: | 30 | 28 | |||||||
| U.S. Treasury, government, and agency bonds | — | 460 | — | — | 460 | ||||
| Mortgage- and asset-backed securities | — | 9 | — | — | 9 | ||||
| Corporate bonds | — | 468 | — | — | 468 | ||||
| Pooled funds | — | 190 | — | — | 190 | ||||
| Cash equivalents and other | 125 | 2 | — | — | 127 | ||||
| Real estate investments | 118 | — | — | 591 | 709 | 13 | 15 | ||
| Special situations | — | — | — | 59 | 59 | 3 | 2 | ||
| Private equity | — | — | — | 538 | 538 | 9 | 12 | ||
| Total | $1,572 | $1,688 | $— | $1,188 | $4,448 | 100% | 100% | ||
| Liabilities: | |||||||||
| Derivatives | (1) | — | — | — | (1) | ||||
| Total | $1,571 | $1,688 | $— | $1,188 | $4,447 | 100% | 100% | ||
| Mississippi Power | |||||||||
| Assets: | |||||||||
| Equity: | 45% | 43% | |||||||
| Domestic equity | $95 | $32 | $— | $— | $127 | ||||
| International equity | 99 | 50 | — | — | 149 | ||||
| Fixed income: | 30 | 28 | |||||||
| U.S. Treasury, government, and agency bonds | — | 67 | — | — | 67 | ||||
| Mortgage- and asset-backed securities | — | 1 | — | — | 1 | ||||
| Corporate bonds | — | 68 | — | — | 68 | ||||
| Pooled funds | — | 28 | — | — | 28 | ||||
| Cash equivalents and other | 18 | — | — | — | 18 | ||||
| Real estate investments | 17 | — | — | 86 | 103 | 13 | 15 | ||
| Special situations | — | — | — | 9 | 9 | 3 | 2 | ||
| Private equity | — | — | — | 78 | 78 | 9 | 12 | ||
| Total | $229 | $246 | $— | $173 | $648 | 100% | 100% | ||
II-221
| Fair Value Measurements Using | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · SignificantUnobservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | |||||||||
| At December 31, 2022: · (Level 1) · (Level 2) · (Level 3) · (NAV) · Total | |||||||||
| (in millions) | |||||||||
| Southern Power | |||||||||
| Assets: | |||||||||
| Equity: | 45% | 43% | |||||||
| Domestic equity | $25 | $9 | $— | $— | $34 | ||||
| International equity | 27 | 14 | — | — | 41 | ||||
| Fixed income: | 30 | 28 | |||||||
| U.S. Treasury, government, and agency bonds | — | 18 | — | — | 18 | ||||
| Corporate bonds | — | 19 | — | — | 19 | ||||
| Pooled funds | — | 8 | — | — | 8 | ||||
| Cash equivalents and other | 5 | — | — | — | 5 | ||||
| Real estate investments | 5 | — | — | 24 | 29 | 13 | 15 | ||
| Special situations | — | — | — | 2 | 2 | 3 | 2 | ||
| Private equity | — | — | — | 21 | 21 | 9 | 12 | ||
| Total | $62 | $68 | $— | $47 | $177 | 100% | 100% | ||
| Southern Company Gas | |||||||||
| Assets: | |||||||||
| Equity: | 45% | 43% | |||||||
| Domestic equity | $146 | $49 | $— | $— | $195 | ||||
| International equity | 152 | 77 | — | — | 229 | ||||
| Fixed income: | 30 | 28 | |||||||
| U.S. Treasury, government, and agency bonds | — | 104 | — | — | 104 | ||||
| Mortgage- and asset-backed securities | — | 2 | — | — | 2 | ||||
| Corporate bonds | — | 105 | — | — | 105 | ||||
| Pooled funds | — | 43 | — | — | 43 | ||||
| Cash equivalents and other | 28 | 1 | — | — | 29 | ||||
| Real estate investments | 27 | — | — | 133 | 160 | 13 | 15 | ||
| Special situations | — | — | — | 13 | 13 | 3 | 2 | ||
| Private equity | — | — | — | 121 | 121 | 9 | 12 | ||
| Total | $353 | $381 | $— | $267 | $1,001 | 100% | 100% | ||
II-222
The fair values, and actual allocations relative to the target allocations, of the applicable Registrants' other postretirement benefit plan assets at December 31, 2023 and 2022 are presented below.
| Fair Value Measurements Using | ||||||
|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets | SignificantOtherObservableInputs | Net Asset Value as a Practical Expedient | Total | Target Allocation | Actual Allocation | |
| At December 31, 2023: · (Level 1) · (Level 2) · (NAV) | ||||||
| (in millions) | ||||||
| Southern Company | ||||||
| Assets: | ||||||
| Equity: | 60% | 61% | ||||
| Domestic equity | $85 | $87 | $— | $172 | ||
| International equity | 53 | 82 | — | 135 | ||
| Fixed income: | 30 | 28 | ||||
| U.S. Treasury, government, and agency bonds | — | 57 | — | 57 | ||
| Mortgage- and asset-backed securities | — | 2 | — | 2 | ||
| Corporate bonds | — | 47 | — | 47 | ||
| Pooled funds | — | 92 | — | 92 | ||
| Cash equivalents and other | 21 | 2 | — | 23 | ||
| Trust-owned life insurance | — | 456 | — | 456 | ||
| Real estate investments | 11 | — | 46 | 57 | 4 | 6 |
| Special situations | — | — | 6 | 6 | 1 | 1 |
| Private equity | — | — | 48 | 48 | 3 | 4 |
| Private credit | — | — | 1 | 1 | 1 | — |
| Infrastructure | — | — | — | — | 1 | — |
| Total | $170 | $825 | $101 | $1,096 | 100% | 100% |
| Alabama Power | ||||||
| Assets: | ||||||
| Equity: | 67% | 66% | ||||
| Domestic equity | $16 | $6 | $— | $22 | ||
| International equity | 16 | 9 | — | 25 | ||
| Fixed income: | 23 | 23 | ||||
| U.S. Treasury, government, and agency bonds | — | 16 | — | 16 | ||
| Corporate bonds | — | 14 | — | 14 | ||
| Pooled funds | — | 8 | — | 8 | ||
| Cash equivalents and other | 3 | — | — | 3 | ||
| Trust-owned life insurance | — | 280 | — | 280 | ||
| Real estate investments | 3 | — | 14 | 17 | 4 | 6 |
| Special situations | — | — | 2 | 2 | 1 | 1 |
| Private equity | — | — | 15 | 15 | 3 | 4 |
| Private credit | — | — | — | — | 1 | — |
| Infrastructure | — | — | — | — | 1 | — |
| Total | $38 | $333 | $31 | $402 | 100% | 100% |
II-223
| Fair Value Measurements Using | ||||||
|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets | SignificantOtherObservableInputs | Net Asset Value as a Practical Expedient | Total | Target Allocation | Actual Allocation | |
| At December 31, 2023: · (Level 1) · (Level 2) · (NAV) | ||||||
| (in millions) | ||||||
| Georgia Power | ||||||
| Assets: | ||||||
| Equity: | 58% | 57% | ||||
| Domestic equity | $47 | $6 | $— | $53 | ||
| International equity | 16 | 40 | — | 56 | ||
| Fixed income: | 35 | 35 | ||||
| U.S. Treasury, government, and agency bonds | — | 16 | — | 16 | ||
| Corporate bonds | — | 14 | — | 14 | ||
| Pooled funds | — | 47 | — | 47 | ||
| Cash equivalents and other | 13 | — | — | 13 | ||
| Trust-owned life insurance | — | 176 | — | 176 | ||
| Real estate investments | 4 | — | 14 | 18 | 3 | 4 |
| Special situations | — | — | 2 | 2 | 1 | 1 |
| Private equity | — | — | 14 | 14 | 2 | 3 |
| Private credit | — | — | — | — | 1 | — |
| Infrastructure | — | — | — | — | — | — |
| Total | $80 | $299 | $30 | $409 | 100% | 100% |
| Mississippi Power | ||||||
| Assets: | ||||||
| Equity: | 34% | 33% | ||||
| Domestic equity | $3 | $1 | $— | $4 | ||
| International equity | 3 | 1 | — | 4 | ||
| Fixed income: | 43 | 44 | ||||
| U.S. Treasury, government, and agency bonds | — | 7 | — | 7 | ||
| Corporate bonds | — | 2 | — | 2 | ||
| Pooled funds | — | 1 | — | 1 | ||
| Cash equivalents and other | 1 | — | — | 1 | ||
| Real estate investments | 1 | — | 2 | 3 | 10 | 11 |
| Special situations | — | — | — | — | 2 | 2 |
| Private equity | — | — | 2 | 2 | 7 | 10 |
| Private credit | — | — | — | — | 3 | — |
| Infrastructure | — | — | — | — | 1 | — |
| Total | $8 | $12 | $4 | $24 | 100% | 100% |
II-224
| Fair Value Measurements Using | ||||||
|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets | SignificantOtherObservableInputs | Net Asset Value as a Practical Expedient | Total | Target Allocation | Actual Allocation | |
| At December 31, 2023: · (Level 1) · (Level 2) · (NAV) | ||||||
| (in millions) | ||||||
| Southern Company Gas | ||||||
| Assets: | ||||||
| Equity: | 72% | 72% | ||||
| Domestic equity | $2 | $67 | $— | $69 | ||
| International equity | 2 | 22 | — | 24 | ||
| Fixed income: | 26 | 26 | ||||
| U.S. Treasury, government, and agency bonds | — | 1 | — | 1 | ||
| Corporate bonds | — | 1 | — | 1 | ||
| Pooled funds | — | 29 | — | 29 | ||
| Cash equivalents and other | 1 | — | — | 1 | ||
| Trust-owned life insurance | — | — | — | — | ||
| Real estate investments | — | — | 1 | 1 | 1 | 1 |
| Private equity | — | — | 1 | 1 | 1 | 1 |
| Total | $5 | $120 | $2 | $127 | 100% | 100% |
II-225
| Fair Value Measurements Using | ||||||
|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | ||||||
| At December 31, 2022: · (Level 1) · (Level 2) · (NAV) · Total | ||||||
| (in millions) | ||||||
| Southern Company | ||||||
| Assets: | ||||||
| Equity: | 61% | 59% | ||||
| Domestic equity | $85 | $74 | $— | $159 | ||
| International equity | 58 | 79 | — | 137 | ||
| Fixed income: | 30 | 28 | ||||
| U.S. Treasury, government, and agency bonds | — | 43 | — | 43 | ||
| Mortgage- and asset-backed securities | — | 1 | — | 1 | ||
| Corporate bonds | — | 40 | — | 40 | ||
| Pooled funds | — | 79 | — | 79 | ||
| Cash equivalents and other | 19 | — | — | 19 | ||
| Trust-owned life insurance | — | 406 | — | 406 | ||
| Real estate investments | 11 | — | 51 | 62 | 5 | 7 |
| Special situations | — | — | 6 | 6 | 1 | 1 |
| Private equity | — | — | 46 | 46 | 3 | 5 |
| Total | $173 | $722 | $103 | $998 | 100% | 100% |
| Alabama Power | ||||||
| Assets: | ||||||
| Equity: | 69% | 65% | ||||
| Domestic equity | $17 | $6 | $— | $23 | ||
| International equity | 18 | 9 | — | 27 | ||
| Fixed income: | 23 | 23 | ||||
| U.S. Treasury, government, and agency bonds | — | 12 | — | 12 | ||
| Corporate bonds | — | 12 | — | 12 | ||
| Pooled funds | — | 7 | — | 7 | ||
| Cash equivalents and other | 3 | — | — | 3 | ||
| Trust-owned life insurance | — | 252 | — | 252 | ||
| Real estate investments | 3 | — | 16 | 19 | 4 | 7 |
| Special situations | — | — | 2 | 2 | 1 | 1 |
| Private equity | — | — | 14 | 14 | 3 | 4 |
| Total | $41 | $298 | $32 | $371 | 100% | 100% |
II-226
| Fair Value Measurements Using | ||||||
|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | ||||||
| At December 31, 2022: · (Level 1) · (Level 2) · (NAV) · Total | ||||||
| (in millions) | ||||||
| Georgia Power | ||||||
| Assets: | ||||||
| Equity: | 58% | 56% | ||||
| Domestic equity | $46 | $6 | $— | $52 | ||
| International equity | 17 | 39 | — | 56 | ||
| Fixed income: | 35 | 34 | ||||
| U.S. Treasury, government, and agency bonds | — | 10 | — | 10 | ||
| Corporate bonds | — | 12 | — | 12 | ||
| Pooled funds | — | 40 | — | 40 | ||
| Cash equivalents and other | 9 | — | — | 9 | ||
| Trust-owned life insurance | — | 154 | — | 154 | ||
| Real estate investments | 4 | — | 15 | 19 | 4 | 5 |
| Special situations | — | — | 2 | 2 | 1 | 1 |
| Private equity | — | — | 14 | 14 | 2 | 4 |
| Total | $76 | $261 | $31 | $368 | 100% | 100% |
| Mississippi Power | ||||||
| Assets: | ||||||
| Equity: | 37% | 35% | ||||
| Domestic equity | $3 | $1 | $— | $4 | ||
| International equity | 3 | 2 | — | 5 | ||
| Fixed income: | 43 | 41 | ||||
| U.S. Treasury, government, and agency bonds | — | 4 | — | 4 | ||
| Corporate bonds | — | 2 | — | 2 | ||
| Pooled funds | — | 1 | — | 1 | ||
| Cash equivalents and other | 2 | — | — | 2 | ||
| Real estate investments | 1 | — | 3 | 4 | 11 | 12 |
| Special situations | — | — | — | — | 2 | 2 |
| Private equity | — | — | 2 | 2 | 7 | 10 |
| Total | $9 | $10 | $5 | $24 | 100% | 100% |
II-227
| Fair Value Measurements Using | ||||||
|---|---|---|---|---|---|---|
| Quoted Prices in Active Markets for Identical Assets · SignificantOtherObservableInputs · Net Asset Value as a Practical Expedient · Target Allocation · Actual Allocation | ||||||
| At December 31, 2022: · (Level 1) · (Level 2) · (NAV) · Total | ||||||
| (in millions) | ||||||
| Southern Company Gas | ||||||
| Assets: | ||||||
| Equity: | 72% | 70% | ||||
| Domestic equity | $2 | $56 | $— | $58 | ||
| International equity | 2 | 20 | — | 22 | ||
| Fixed income: | 26 | 27 | ||||
| U.S. Treasury, government, and agency bonds | — | 1 | — | 1 | ||
| Corporate bonds | — | 1 | — | 1 | ||
| Pooled funds | — | 27 | — | 27 | ||
| Cash equivalents and other | 1 | — | — | 1 | ||
| Real estate investments | — | — | 2 | 2 | 1 | 2 |
| Private equity | — | — | 1 | 1 | 1 | 1 |
| Total | $5 | $105 | $3 | $113 | 100% | 100% |
Employee Savings Plan
Southern Company and its subsidiaries also sponsor 401(k) defined contribution plans covering substantially all employees and provide matching contributions up to specified percentages of an employee's eligible pay. Total matching contributions made to the plans for 2023, 2022, and 2021 were as follows:
| Southern Company · AlabamaPower · GeorgiaPower · MississippiPower · SouthernPower · Southern Company Gas | ||||||
|---|---|---|---|---|---|---|
| (in millions) | ||||||
| 2023 | $131 | $28 | $31 | $5 | $3 | $18 |
| 2022 | 124 | 26 | 29 | 5 | 3 | 17 |
| 2021 | 119 | 26 | 28 | 5 | 2 | 16 |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.