GEORGIA POWER CO

Southern Company Gas has various regulatory mechanisms, such as weather and revenue normalization and straight-fixed-variable rate design, which limit its exposure to weather changes within typical ranges in each of its utility's respective service territory. Southern Company Gas also utilizes weather hedges to limit the negative income impacts in the event of warmer-than-normal weather in Illinois for gas distribution operations and in Illinois and Georgia for gas marketing services. Therefore, weather typically does not have a significant net income impact.

During the Heating Season, natural gas usage and operating revenues are generally higher as more customers are connected to the gas distribution systems and natural gas usage is higher in periods of colder weather. In addition, because of a rate design change affecting volumetric rates ordered by the Illinois Commission in Nicor Gas' 2023 rate case, additional revenues are expected in the Heating Season, with a corresponding decrease expected in revenues in the second and third quarters of each year. This change will affect the comparison of the prior year revenue for the impacted quarters. Southern Company Gas' base operating expenses, excluding cost of natural gas and bad debt expense, are incurred relatively evenly throughout the year. Seasonality also affects the comparison of certain balance sheet items across quarters, including receivables, unbilled revenues, natural gas for sale, and notes payable. However, these items are comparable when reviewing Southern Company Gas' annual results. Thus, Southern Company Gas' operating results for the interim periods presented are not necessarily indicative of annual results and can vary significantly from quarter to quarter.

Southern Company Gas' net income in the third quarter 2024 was $38 million compared to $82 million for the corresponding period in 2023. The decrease was primarily due to a $49 million decrease in net income at gas distribution operations.

For year-to-date 2024, net income was $555 million compared to $475 million for the corresponding period in 2023. The increase was primarily due to a $51 million increase in net income at gas distribution operations, a $13 million increase in net income at gas marketing services, and a $12 million increase in net income at all other.

Natural Gas Revenues

In the third quarter 2024, natural gas revenues, were $682 million compared to$689 million for the corresponding period in 2023. For year-to-date 2024, natural gas revenues were $3.2 billion compared to $3.4 billion for the corresponding period in 2023. Details of the changes in natural gas revenues were as follows:

Revenues from rate changes increased for year-to-date 2024 compared to the corresponding period in 2023 primarily due to rate increases, partially offset by a change in timing of revenues at Nicor Gas. See Note 2 to the financial statements under "Southern Company Gas – Rate Proceedings" in Item 8 of the Form 10-K for additional information.

Revenues from gas costs and other cost recovery decreased for year-to-date 2024 compared to the corresponding period in 2023 primarily due to lower natural gas cost recovery associated with lower natural gas prices and lower demand associated with warmer weather. See "Cost of Natural Gas" herein for additional information.

Revenues from gas marketing services decreased for year-to-date 2024 compared to the corresponding period in 2023 primarily due to lower commodity prices.

Cost of Natural Gas

Excluding Atlanta Gas Light, which does not sell natural gas to end-use customers, natural gas distribution rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas and do not affect net income from gas distribution operations. Cost of natural gas at gas distribution operations represented 77% and 81% of the total cost of natural gas in the third quarter and year-to-date 2024, respectively. See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS – "Southern Company Gas – Cost of Natural Gas" in Item 7 of the Form 10-K and "Natural Gas Revenues" herein for additional information.

For year-to-date 2024, cost of natural gas was $0.9 billion compared to $1.2 billion for the corresponding period in 2023. The decrease reflects lower gas cost recovery as a result of a decrease of 22% in natural gas prices.

The following table details the volumes of natural gas sold during all periods presented:

In the third quarter 2024, other operations and maintenance expenseswere $295 million compared to$264 million for the corresponding period in 2023. The increase was primarily due to an increase of $31 million in compensation and benefit expenses.

For year-to-date 2024, other operations and maintenance expenses were $877 million compared to $879 million for the corresponding period in 2023. The decrease was primarily due to a $30 million prior year regulatory disallowance at Nicor Gas and decreases of $11 million in expenses passed through to customers primarily related to bad debt and energy efficiency programs at gas distribution operations, $6 million in service maintenance and meter sets maintenance expenses at Nicor Gas as well as general plant maintenance expenses, and $2 million in bad debt expenses. These decreases were partially offset by an increase of $55 million in compensation and benefit expenses. See Note 2 to the financial statements under "Southern Company Gas – Infrastructure Replacement Programs and Capital Projects – Nicor Gas" in Item 8 of the Form 10-K for additional information.

In the third quarter 2024, depreciation and amortization was $162 million compared to $145 million for the corresponding period in 2023. For year-to-date 2024, depreciation and amortization was $475 million compared to $429 million for the corresponding period in 2023. The increases were primarily due to continued investments at the natural gas distribution utilities.

For year-to-date 2024, taxes other than income taxes were $186 million compared to $203 million for the corresponding period in 2023. The decrease for year-to-date 2024 was primarily due to a decrease of $16 million in revenue taxes as a result of lower natural gas revenues at Nicor Gas.

In thethird quarter 2024, interest expense, net of amounts capitalized was $84 million compared to $77 million for the corresponding period in 2023. For year-to-date 2024, interest expense, net of amounts capitalized was $250 million compared to $226 million for the corresponding period in 2023. The increases for the third quarter and year-to-date 2024 were primarily associated with increases of approximately $4 million and $14 million, respectively, related to higher interest rates and approximately $3 million and $10 million, respectively, related to higher outstanding debt. See FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" and "Financing Activities" herein for additional information on borrowings.

In the third quarter 2024, income taxes were $11 million compared to$28 million for the corresponding period in 2023. The decrease was primarily due to lower pre-tax earnings, including the change in timing of revenues at Nicor Gas.

Foryear-to-date 2024, income taxes were $184 million compared to $160 million for the corresponding period in 2023. The increase was primarily due to higher pre-tax earnings, including the prior year regulatory disallowance at

Nicor Gas. See Note 2 to the financial statements under "Southern Company Gas – Infrastructure Replacement Programs and Capital Projects – Nicor Gas" in Item 8 of the Form 10-K for additional information.

Segment Information

Operating revenues, operating expenses, and net income for each segment are provided in the table below. See Note (L) to the Condensed Financial Statements under "Southern Company Gas" herein for additional information.

Gas Distribution Operations

Gas distribution operations is the largest component of Southern Company Gas' business and is subject to regulation and oversight by regulatory agencies in each of the states it serves. These agencies approve natural gas rates designed to provide Southern Company Gas with the opportunity to generate revenues to recover the cost of natural gas delivered to its customers and its fixed and variable costs, including depreciation, interest expense, operations and maintenance, taxes, and overhead costs, and to earn a reasonable return on its investments.

With the exception of Atlanta Gas Light, Southern Company Gas' second largest utility that operates in a deregulated natural gas market and has a straight-fixed-variable rate design that minimizes the variability of its revenues based on consumption, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are a function of weather conditions, price levels for natural gas, and general economic conditions that may impact customers' ability to pay for natural gas consumed. Southern Company Gas has various regulatory and other mechanisms, such as weather and revenue normalization mechanisms and weather derivative instruments, that limit its exposure to changes in customer consumption, including weather changes within typical ranges in its natural gas distribution utilities' service territories. See Note 2 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.

In the third quarter 2024, net income decreased $49 million, or 70.0%, when compared to the corresponding period in 2023, as described further below:

•Operating revenues decreased $3 million primarily due to the change in timing of revenues at Nicor Gas, partially offset by rate increases. Gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas.

•Operating expenses increased $48 million primarily due to a $31 million increase in other operations and maintenance expense and an $18 million increase in depreciation resulting from additional assets placed in service.

•Interest expense, net of amounts capitalized increased $10 million primarily due to higher interest rates and higher average outstanding debt.

•Income taxes decreased $14 million primarily as a result of lower pre-tax earnings, including the change in timing of revenues at Nicor Gas.

Foryear-to-date 2024, net income increased $51 million, or 14.5%, when compared to the corresponding period in 2023, as described further below:

•Operating revenues decreased $174 million primarily due to lower natural gas cost over recovery, partially offset by rate increases and a change in timing of revenues at Nicor Gas. Gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas.

•Operating expenses decreased $282 million primarily due to a $322 million decrease in cost of natural gas as a result of lower gas prices and lower volumes sold compared to 2023 and the $30 million prior year regulatory disallowance at Nicor Gas, partially offset by higher depreciation resulting from additional assets placed in service, higher compensation and benefit expenses, and higher revenue taxes. The decrease in operating expenses also includes costs passed through directly to customers, primarily related to bad debt expenses, energy efficiency program, and revenue taxes.

•Interest expense, net of amounts capitalized increased $29 million primarily due to higher interest rates and higher average outstanding debt.

•Income taxes increased $26 million primarily as a result of higher pre-tax earnings.

See Note 2 to the financial statements under "Southern Company Gas – Infrastructure Replacement Programs and Capital Projects – Nicor Gas" in Item 8 of the Form 10-K for additional information.

Gas Pipeline Investments

Gas pipeline investments consists primarily of joint ventures in natural gas pipeline investments including SNG and Dalton Pipeline. See Note (E) to the Condensed Financial Statements under "Southern Company Gas" herein for additional information.

Gas Marketing Services

Gas marketing services provides energy-related products and services to natural gas markets and participants in customer choice programs that were approved in various states to increase competition. These programs allow customers to choose their natural gas supplier while the local distribution utility continues to provide distribution and transportation services. Gas marketing services is weather sensitive and uses a variety of hedging strategies, such as weather derivative instruments and other risk management tools, to partially mitigate potential weather impacts.

In the third quarter 2024, net loss was $2 million compared to net income of $2 million for the corresponding period in 2023. The change was primarily due to increases in compensation and benefit expenses.

For year-to-date 2024, net income increased $13 million, or 22.0%, when compared to the corresponding period in 2023 primarily due to retail margins and a decrease in cost of natural gas, partially offset by higher income taxes.

All Other

All other includes a renewable natural gas business, AGL Services Company, and Southern Company Gas Capital, as well as various corporate operating expenses that are not allocated to the reportable segments and interest income (expense) associated with affiliate financing arrangements. All other included a natural gas storage facility in California through its sale in September 2023. See Note 15 to the financial statements in Item 8 of the Form 10-K for additional information.

In the third quarter 2024, net loss decreased $9 million, or 64.3%, when compared to the corresponding period in 2023 primarily due to decreases in operations and maintenance expense and interest expense.

For year-to-date 2024, net income was $3 million compared to a net loss of $9 million for the corresponding period in 2023. The change was primarily due to decreases in operations and maintenance expense.