SOUTHERN CO

Mississippi Power's net income for the first quarter 2024 was$50 million compared to $58 million for the corresponding period in 2023. The decrease was primarily due to a decrease in affiliate wholesale capacity revenues.

In the first quarter 2024, retail revenues were$221 million compared to $236 million for the corresponding period in 2023. Details of the changes in retail revenues were as follows:

Revenues associated with changes in rates and pricing increasedin the first quarter 2024 when compared to the corresponding period in 2023 primarily due to the amortization of certain regulatory assets that ended in December 2023.

Revenues attributable to changes in sales increased in the first quarter 2024 when compared to the corresponding period in 2023. Weather-adjusted residential and commercial KWH sales increased 4.7% and 7.4%, respectively, primarily due to increased customer usage. Industrial KWH sales decreased 1.7% primarily due to decreases in the petroleum and transportation sectors.

Fuel and other cost recovery revenues decreased in the first quarter 2024 when compared to the corresponding period in 2023 primarily as a result of lower recoverable fuel costs. Recoverable fuel costs include fuel and purchased power expenses reduced by the fuel and emissions portion of wholesale revenues from energy sold to customers outside Mississippi Power's service territory. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of purchased power costs, and do not affect net income. See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information.

Wholesale Revenues – Non-Affiliates

In the first quarter 2024, wholesale revenues from sales to non-affiliates were$59 million compared to $68 million for the corresponding period in 2023. Thedecrease was primarily due to a $6 million decrease associated with MRA customers largely due to lower recoverable fuel costs and a $4 million decrease associated with changes in power supply agreements.

Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Mississippi Power's and the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. Inaddition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and municipalities located in southeastern Mississippi under cost-based electric tariffs which are subject to regulation by the FERC. Short-term opportunity energy sales are also included in sales for resale to non-affiliates. These opportunity sales are made at market-based rates that generally provide a margin above Mississippi Power's variable cost to produce the energy. See Note 2 to the financial statements under "Mississippi Power – Municipal and Rural Associations Tariff" in Item 8 of the Form 10-K for additional information.

Wholesale Revenues – Affiliates

In the first quarter 2024, wholesale revenues from sales to affiliates were $51 million compared to $75 million for the corresponding period in 2023. The decrease was primarily due to adecrease of $31 million in capacity revenues mainly associated with Mississippi Power's lower availability of generation reserves to the Southern Company power pool and a $9 million decrease primarily associated with lower KWH sales. These decreases were partially offset by a $15 million increase in capacity revenues associated with a new PPA with Georgia Power. See Note 2 to the financial statements under "Mississippi Power – Integrated Resource Plan" in Item 8 of the Form 10-K for additional information.

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

In the first quarter 2024, total fuel and purchased power expenses were$111 million compared to $151 million for the corresponding period in 2023. Thedecrease was due to a $27 million decrease related to the average cost of fuel and purchased power and a $13 million net decrease related to the volume of KWHs generated and purchased.

Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clause.

Details of Mississippi Power's generation and purchased power were as follows:

Fuel

In the first quarter 2024, fuel expense was $105 million compared to $147 million for the corresponding period in 2023. Thedecrease was primarily due to a 19.5% decrease in the average cost of natural gas per KWH generated and a 15.2% decrease in the volume of KWHs generated by natural gas.

For first quarter 2024, other operations and maintenance expenses were $88 million compared to $82 million for the corresponding period in 2023. The increase was primarily due to anincrease in generation expenses primarily associated with planned outages and maintenance.

Other Income (Expense), Net

In the first quarter 2024, other income (expense), net was $14 million compared to $9 million for the corresponding period in 2023. The increase was primarily due to customer charges related to contributions in aid of construction.