SOUTHERN CO

Mississippi Power's net income in the second quarter 2024 was $61 million compared to $40 million for the corresponding period in 2023. The increase was primarily due to an increase in affiliate wholesale capacity revenues, an increase in retail revenues largely due to warmer weather when compared to the corresponding period in 2023, and a decrease in non-fuel operations and maintenance expenses.

For year-to-date 2024, net income was $111 million compared to $98 million for the corresponding period in 2023. The increase was primarily due to an increase in retail revenues largely due to sales growth and warmer weather when compared to the corresponding period in 2023.

In the second quarter 2024, retail revenues were $242 million compared to $227 million for the corresponding period in 2023. For year-to-date 2024, retail revenues were$462 million compared to$464 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 thesecond quarter andyear-to-date 2024 when compared to the corresponding periods in 2023 primarily due to certain regulatory assets that fully amortized in December 2023.

Revenues attributable to changes in sales increased in the second quarter and year-to-date 2024 when compared to the corresponding periods in 2023. Weather-adjusted residential KWH sales decreased 2.7% in thesecond quarter 2024 primarily due to decreased customer usage. Weather-adjusted residential KWH sales increased 1.0% for year-to-date 2024 primarily due to increased customer usage. Weather-adjusted commercial KWH sales increased 7.6% and 7.5% in the second quarter and year-to-date 2024, respectively, primarily due to increased customer usage. Industrial KWH sales decreased 2.2% and 2.0% in the second quarter and year-to-date 2024, respectively, primarily due to a decrease in the petroleum sector.

Fuel and other cost recovery revenues increased in the second quarter 2024 when compared to the corresponding period in 2023 primarily as a result of an increase in ad valorem taxes. Fuel and other cost recovery revenues decreased for year-to-date 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

For year-to-date 2024, wholesale revenues from sales to non-affiliates were $113 million compared to $124 million for the corresponding period in 2023. The decrease was primarily due to a $5 million decrease associated with changes in power supply agreements, a $4 million decrease associated with MRA customers largely due to lower recoverable fuel costs, and a $3 million decrease associated with lower opportunity sales.

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. In addition, 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 second quarter 2024, wholesale revenues from sales to affiliates were $58 million compared to $18 million for the corresponding period in 2023. The increase was primarily due to increases of $16 million related to the volume of KWH sales, $15 million in capacity revenues associated with a new PPA with Georgia Power, and $8 million related to the price of energy driven by natural gas prices.

For year-to-date 2024, wholesale revenues from sales to affiliates were $109 million compared to$93 million for the corresponding period in 2023. The increase was primarily due to increases of $31 million in capacity revenues associated with a new PPA with Georgia Power, $10 million related to the price of energy driven by natural gas prices, and $6 million related to the volume of KWH sales. These increases were partially offset by a decrease of $31 million in capacity revenues mainly associated with Mississippi Power's lower availability of generation reserves to the Southern Company power pool.

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 second quarter 2024, total fuel and purchased power expenses were $117 million compared to $96 million for the corresponding period in 2023. The increase was due to a $24 million increase associated with the volume of KWHs generated and purchased, partially offset by a $3 million net decrease related to the average cost of fuel and purchased power.

For year-to-date 2024, total fuel and purchased power expenses were $229 million compared to$246 million for the corresponding period in 2023. Thedecrease was due to a $33 million net decrease related to the average cost of fuel and purchased power, partially offset by a $15 million increase 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 second quarter 2024, fuel expense was $106 million compared to $89 million for the corresponding period in 2023. The increase was primarily due to a 176.6% increase in the volume of KWHs generated by coal and a 10.8% increase in the volume of KWHs generated by natural gas, partially offset by a 7.6% decrease in the average cost per KWH generated by coal and a 3.0% decrease in the average cost per KWH generated by natural gas.

For year-to-date 2024, fuel expense was $211 million compared to$235 million for the corresponding period in 2023. Thedecrease was primarily due to a 14.4% decrease in the average cost per KWH generated by natural gas, an 11.6% decrease in the average cost per KWH generated by coal, and a 2.9% decrease in the volume of KWHs generated by natural gas, partially offset by a 69.7% increase in the volume of KWHs generated by coal.

Purchased Power

In the second quarter 2024, purchased power expense was $11 million compared to $7 million for the corresponding period in 2023. The increase was primarily due to an increase of 32.2% in the volume of KWHs purchased and an increase of 20.1% in the average cost per KWH purchased primarily due to higher natural gas prices.

For year-to-date 2024, purchased power expense was $18 million compared to $11 million for the corresponding period in 2023. The increase was primarily due to increases of 46.5% in the volume of KWHs purchased and 6.9% in the average cost per KWH purchased primarily due to higher natural gas prices.

In the second quarter 2024, other operations and maintenance expenses were $83 million compared to $91 million for the corresponding period in 2023. The decrease was primarily due to adecrease in generation expenses primarily associated with planned outages and previously deferred Plant Ratcliffe expenses that fully amortized in December 2023.

For year-to-date 2024, other operations and maintenance expenses were $171 million compared to $175 million for the corresponding period in 2023. The decrease was primarily due to previously deferred Plant Ratcliffe expenses that fully amortized in December 2023.

Foryear-to-date 2024, interest expense, net of amounts capitalized was $39 million compared to $34 million for the corresponding period in 2023. The increase was primarily associated with increases of approximately $3 million related to higher average outstanding borrowings and $2 million related to higher interest rates. See FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" and "Financing Activities" herein for additional information on borrowings.

For year-to-date 2024, other income (expense), net was $25 million compared to $20 million for the corresponding period in 2023. The increase was primarily due to increases of $3 million associated with customer charges related to contributions in aid of construction and $2 million in interest associated with a sales-type lease.

In the second quarter 2024, income taxes were $15 million compared to $4 million for the corresponding period in 2023. Foryear-to-date 2024, income taxes were $25 million compared to $17 million for the corresponding period in 2023. The increases were primarily due to higher pre-tax earnings and increases of $2 million in both periods associated with the flowback of certain excess deferred income taxes. See Note (G) to the Condensed Financial Statements herein for additional information.