ALABAMA POWER CO

For the period ended Dec 31, 2025. Filed Feb 19, 2026.

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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.

FY2025 · Filed Feb 19, 2026

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, 2025 and 2024, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, 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 certain regulatory assets or liabilities.

We read and evaluated relevant regulatory orders issued 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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	2025	2024	2023
(in millions)
Operating Revenues:
Retail revenues	$1,085	$965	$963
Wholesale revenues, non-affiliates	275	228	272
Wholesale revenues, affiliates	280	218	200
Other revenues	55	52	39
Total operating revenues	1,695	1,463	1,474
Operating Expenses:
Fuel and purchased power	624	477	538
Other operations and maintenance	387	370	362
Depreciation and amortization	211	193	190
Taxes other than income taxes	139	127	124
Total operating expenses	1,361	1,167	1,214
Operating Income	334	296	260
Other Income and (Expense):
Interest expense, net of amounts capitalized	(79)	(77)	(71)
Other income (expense), net	25	27	35
Total other income and (expense)	(54)	(50)	(36)
Earnings Before Income Taxes	280	246	224
Income taxes	65	47	36
Net Income	$215	$199	$188

	2025	2024	2023
(in millions)
Net Income	$215	$199	$188
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of $—, $2, and $—, respectively	(1)	5	—
Total other comprehensive income (loss)	(1)	5	—
Comprehensive Income	$214	$204	$188

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	2025	2024	2023
(in millions)
Operating Activities:
Net income	$215	$199	$188
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total	230	209	232
Deferred income taxes	9	16	(13)
Pension, postretirement, and other employee benefits	(20)	(21)	(20)
Settlement of asset retirement obligations	(19)	(17)	(18)
Property damage reserve and reliability reserve accruals	26	35	23
Retail fuel cost under recovery – long-term	(30)	(32)	(50)
Plant acquisition regulatory liability	36	—	—
Other, net	(12)	5	(5)
Changes in certain current assets and liabilities —
-Receivables	(3)	(14)	85
-Fossil fuel stock	10	(9)	(3)
-Materials and supplies	(2)	(13)	(9)
-Prepaid income taxes	11	(11)	—
-Other current assets	(1)	(1)	10
-Accounts payable	(13)	(10)	(81)
-Retail fuel cost over recovery	(10)	55	27
-Wholesale fuel cost over recovery	(20)	15	5
-Other current liabilities	7	—	(2)
Net cash provided from operating activities	414	406	369
Investing Activities:
Property additions	(328)	(311)	(319)
Contributions in aid of construction	58	—	—
Cost of removal net of salvage	(55)	(41)	(32)
Change in construction payables, net	(4)	—	9
Payments pursuant to LTSAs	(20)	(19)	(26)
Other investing activities	(7)	(2)	(2)
Net cash used for investing activities	(356)	(373)	(370)
Financing Activities:
Increase (decrease) in notes payable, net	(14)	14	—
Proceeds — Senior notes	100	250	100
Redemptions —
Senior notes	—	(200)	—
Revenue bonds	(11)	—	—
Capital contributions from parent company	77	68	68
Payment of common stock dividends	(194)	(188)	(185)
Other financing activities	(3)	(2)	(3)
Net cash used for financing activities	(45)	(58)	(20)
Net Change in Cash, Cash Equivalents, and Restricted Cash	13	(25)	(21)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Year	13	38	59
Cash, Cash Equivalents, and Restricted Cash at End of Year	$26	$13	$38
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest	$76	$74	$66
Income taxes, net	42	51	52
Noncash transactions — Accrued property additions at year-end	38	36	34

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Assets	2025	2024
(in millions)
Current Assets:
Cash and cash equivalents	$26	$13
Receivables —
Customer accounts, net	50	45
Unbilled revenues	44	39
Affiliated	26	33
Other accounts and notes	22	24
Fossil fuel stock	46	56
Materials and supplies	101	103
Other regulatory assets	49	43
Other current assets	10	28
Total current assets	374	384
Property, Plant, and Equipment:
In service	5,972	5,697
Less: Accumulated provision for depreciation	1,922	1,833
Plant in service, net of depreciation	4,050	3,864
Construction work in progress	238	253
Total property, plant, and equipment	4,288	4,117
Other Property and Investments	143	152
Deferred Charges and Other Assets:
Deferred charges related to income taxes	25	27
Prepaid pension costs	151	124
Deferred under recovered retail fuel clause revenues	40	32
Regulatory assets – asset retirement obligations	229	243
Other regulatory assets, deferred	255	259
Accumulated deferred income taxes	66	82
Other deferred charges and assets	66	74
Total deferred charges and other assets	832	841
Total Assets	$5,637	$5,494

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Liabilities and Stockholder's Equity	2025	2024
(in millions)
Current Liabilities:
Securities due within one year	$66	$12
Notes payable	—	14
Accounts payable —
Affiliated	70	68
Other	77	83
Accrued taxes	125	115
Accrued compensation	49	46
Asset retirement obligations	21	32
Over recovered retail fuel clause revenues	—	32
Other regulatory liabilities	20	5
Other current liabilities	92	95
Total current liabilities	520	502
Long-Term Debt	1,720	1,681
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes	491	492
Deferred credits related to income taxes	211	219
Employee benefit obligations	67	65
Asset retirement obligations, deferred	103	116
Other cost of removal obligations	115	170
Other regulatory liabilities, deferred	141	121
Other deferred credits and liabilities	80	39
Total deferred credits and other liabilities	1,208	1,222
Total Liabilities	3,448	3,405
Common Stockholder's Equity:
Common stock, without par value (Authorized - 50 million shares; Outstanding - 1 million shares)	38	38
Paid-in capital	4,871	4,791
Accumulated deficit	(2,724)	(2,745)
Accumulated other comprehensive income	4	5
Total common stockholder's equity (See accompanying statements)	2,189	2,089
Total Liabilities and Stockholder's Equity	$5,637	$5,494
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, 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
Net income	—	—	—	215	—	215
Capital contributions from parent company	—	—	80	—	—	80
Other comprehensive income (loss)	—	—	—	—	(1)	(1)
Cash dividends on common stock	—	—	—	(194)	—	(194)
Balance at December 31, 2025	1	$38	$4,871	$(2,724)	$4	$2,189

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