SOUTHERN CO

For the period ended Dec 31, 2024. Filed Feb 20, 2025.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2024 · Filed Feb 20, 2025

SO$93.65+0.1%Stored close · as of Nov 10, 2026

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Mississippi Power:

To the stockholder and the Board of Directors of Mississippi Power Company

We have audited the accompanying balance sheets of Mississippi Power Company (Mississippi Power) (a wholly-owned subsidiary of The Southern Company) as of December 31, 2024 and 2023, the related statements of income, comprehensive income, common stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2024, the related notes, and the financial statement schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of Mississippi Power as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of Mississippi Power's management. Our responsibility is to express an opinion on Mississippi Power's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Mississippi Power in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Mississippi Power is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of Mississippi Power's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the Audit Committee of Southern Company's Board of Directors and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impact of Rate Regulation on the Financial Statements – Refer to Note 1 (Summary of Significant Accounting Policies – Regulatory Assets and Liabilities) and Note 2 (Regulatory Matters – Mississippi Power) to the financial statements

Mississippi Power is subject to retail rate regulation by the Mississippi Public Service Commission and wholesale regulation by the Federal Energy Regulatory Commission (collectively, the "Commissions"). Management has determined that it meets the requirements under accounting principles generally accepted in the United States of America to utilize specialized rules to account for the effects of rate regulation in the preparation of its financial statements. Accounting for the economics of rate regulation may impact multiple financial statement line items and disclosures.

The Commissions set the rates Mississippi Power is permitted to charge customers. Rates are determined and approved in regulatory proceedings based on an analysis of Mississippi Power's costs to provide utility service and a return on, and recovery of, its investment in the utility business. Current and future regulatory decisions can have an impact on the recovery of costs, the rate of return earned on investments, and the timing and amount of assets to be recovered through rates. The Commissions' regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. While Mississippi Power expects to recover costs from customers through regulated rates, there is a risk that the Commissions will not approve: (1) full recovery of the costs of providing utility service, or (2) full recovery of all amounts invested in the utility business and a reasonable return on those investments.

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We identified the impact of rate regulation related to certain assets and liabilities as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and/or the high degree of subjectivity involved in assessing the potential impact of future regulatory orders on incurred costs. Management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) a disallowance of part of the cost of recently completed plant or plant under construction, and/or (3) a refund to customers. Auditing these judgments, which include assumptions about the outcome of future decisions by the Commissions, required specialized knowledge of accounting for rate regulations and the rate setting process due to its inherent complexities.

We tested the effectiveness of management's controls over the evaluation of the likelihood of (1) the recovery in future rates of certain incurred costs and (2) refunds or future reductions in rates that should be reported as regulatory liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering certain costs in future rates or of a future reduction in rates. We also tested the effectiveness of management's controls over the initial recognition of regulatory assets or liabilities.

We read and evaluated relevant regulatory orders and/or other relevant publicly available information to assess the likelihood of recovery of certain incurred costs in future rates or of a future reduction in rates based on precedents of the treatment of similar costs under similar circumstances.

We obtained representation from management regarding the likelihood of recoverability of incurred costs and potential refund or future reduction in rates to assess management's assertions about the likelihood of recovery, refund, or a future reduction in rates.

We evaluated Mississippi Power's disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments, including where there is a high degree of subjectivity involved in assessing the potential impact of future regulatory orders on incurred costs.

We have served as Mississippi Power's auditor since 2002.

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	2024	2023	2022
(in millions)
Operating Revenues:
Retail revenues	$965	$963	$935
Wholesale revenues, non-affiliates	228	272	252
Wholesale revenues, affiliates	218	200	460
Other revenues	52	39	47
Total operating revenues	1,463	1,474	1,694
Operating Expenses:
Fuel and purchased power	477	538	789
Other operations and maintenance	370	362	376
Depreciation and amortization	193	190	181
Taxes other than income taxes	127	124	124
Total operating expenses	1,167	1,214	1,470
Operating Income	296	260	224
Other Income and (Expense):
Interest expense, net of amounts capitalized	(77)	(71)	(56)
Other income (expense), net	27	35	33
Total other income and (expense)	(50)	(36)	(23)
Earnings Before Income Taxes	246	224	201
Income taxes	47	36	37
Net Income	$199	$188	$164

	2024	2023	2022
(in millions)
Net Income	$199	$188	$164
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $2, $—, and $—, respectively	5	—	—
Total other comprehensive income	5	—	—
Comprehensive Income	$204	$188	$164

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	2024	2023	2022
(in millions)
Operating Activities:
Net income	$199	$188	$164
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total	209	232	223
Deferred income taxes	16	(13)	(6)
Pension, postretirement, and other employee benefits	(21)	(20)	(18)
Settlement of asset retirement obligations	(17)	(18)	(20)
System restoration rider and reliability reserve accruals	35	23	32
Retail fuel cost under recovery – long-term	(32)	(50)	—
Other, net	5	(5)	21
Changes in certain current assets and liabilities —
-Receivables	(14)	85	(82)
-Materials and supplies	(13)	(9)	(10)
-Other current assets	(21)	7	(15)
-Accounts payable	(10)	(81)	97
-Accrued taxes	(2)	(7)	5
-Retail fuel cost over recovery	55	27	—
-Other current liabilities	17	10	(8)
Net cash provided from operating activities	406	369	383
Investing Activities:
Property additions	(311)	(319)	(257)
Cost of removal net of salvage	(41)	(32)	(27)
Change in construction payables, net of joint owner portion	—	9	(3)
Payments pursuant to LTSAs	(19)	(26)	(29)
Other investing activities	(2)	(2)	(1)
Net cash used for investing activities	(373)	(370)	(317)
Financing Activities:
Increase (decrease) in notes payable, net	14	—	—
Proceeds —
Senior notes	250	100	—
Revenue bonds	—	—	35
Redemptions — Senior notes	(200)	—	—
Capital contributions from parent company	68	68	68
Payment of common stock dividends	(188)	(185)	(170)
Other financing activities	(2)	(3)	(1)
Net cash used for financing activities	(58)	(20)	(68)
Net Change in Cash, Cash Equivalents, and Restricted Cash	(25)	(21)	(2)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year	38	59	61
Cash, Cash Equivalents, and Restricted Cash at End of Year	$13	$38	$59
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest	$74	$66	$55
Income taxes, net	51	52	33
Noncash transactions — Accrued property additions at year-end	36	34	22

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Assets	2024	2023
(in millions)
Current Assets:
Cash and cash equivalents	$13	$38
Receivables —
Customer accounts, net	45	36
Unbilled revenues	39	40
Affiliated	33	29
Other accounts and notes	24	20
Fossil fuel stock	56	47
Materials and supplies	103	89
Other regulatory assets	43	56
Other current assets	28	10
Total current assets	384	365
Property, Plant, and Equipment:
In service	5,697	5,523
Less: Accumulated provision for depreciation	1,833	1,792
Plant in service, net of depreciation	3,864	3,731
Construction work in progress	253	203
Total property, plant, and equipment	4,117	3,934
Other Property and Investments	152	158
Deferred Charges and Other Assets:
Deferred charges related to income taxes	27	28
Prepaid pension costs	124	99
Deferred under recovered retail fuel clause revenues	32	50
Regulatory assets – asset retirement obligations	243	244
Other regulatory assets, deferred	259	285
Accumulated deferred income taxes	82	96
Other deferred charges and assets	74	85
Total deferred charges and other assets	841	887
Total Assets	$5,494	$5,344

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Liabilities and Stockholder's Equity	2024	2023
(in millions)
Current Liabilities:
Securities due within one year	$12	$201
Notes payable	14	—
Accounts payable —
Affiliated	68	82
Other	83	73
Accrued taxes	115	117
Accrued compensation	46	43
Asset retirement obligations	32	29
Over recovered retail fuel clause revenues	32	27
Other regulatory liabilities	5	17
Other current liabilities	95	90
Total current liabilities	502	679
Long-Term Debt	1,681	1,443
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	492	469
Deferred credits related to income taxes	219	229
Employee benefit obligations	65	67
Asset retirement obligations, deferred	116	139
Other cost of removal obligations	170	186
Other regulatory liabilities, deferred	121	92
Other deferred credits and liabilities	39	37
Total deferred credits and other liabilities	1,222	1,219
Total Liabilities	3,405	3,341
Common Stockholder's Equity:
Common stock, without par value (Authorized - 50 million shares; Outstanding - 1 million shares)	38	38
Paid-in capital	4,791	4,721
Accumulated deficit	(2,745)	(2,756)
Accumulated other comprehensive income	5	—
Total common stockholder's equity (See accompanying statements)	2,089	2,003
Total Liabilities and Stockholder's Equity	$5,494	$5,344
Commitments and Contingent Matters (See notes)

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	Number of Common Shares Issued	CommonStock	Paid-In Capital	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Income (Loss)	Total
(in millions)
Balance at December 31, 2021	1	$38	$4,582	$(2,753)	$—	$1,867
Net income	—	—	—	164	—	164
Capital contributions from parent company	—	—	70	—	—	70
Cash dividends on common stock	—	—	—	(170)	—	(170)
Balance at December 31, 2022	1	38	4,652	(2,759)	—	1,931
Net income	—	—	—	188	—	188
Capital contributions from parent company	—	—	69	—	—	69
Cash dividends on common stock	—	—	—	(185)	—	(185)
Balance at December 31, 2023	1	38	4,721	(2,756)	—	2,003
Net income	—	—	—	199	—	199
Capital contributions from parent company	—	—	70	—	—	70
Other comprehensive income	—	—	—	—	5	5
Cash dividends on common stock	—	—	—	(188)	—	(188)
Balance at December 31, 2024	1	$38	$4,791	$(2,745)	$5	$2,089

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