ALABAMA POWER CO

16. SEGMENT AND RELATED INFORMATION

The Registrants adopted ASU 2023-07 and applied the guidance retrospectively effective for the fiscal year beginning January 1, 2024. See Note 1 under "Recently Adopted Accounting Standards" for additional information.

The CODM at Southern Company, the traditional electric operating companies, and Southern Company Gas is the chairman, president, and chief executive officer of such Registrant. Southern Power's CODM consists of the chairman and chief executive officer and the president. The CODMs assess segment performance using net income that is reflected on the Registrants'

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Southern Company's reportable business segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the distribution of natural gas and other complementary products and services by Southern Company Gas. While the traditional electric operating companies represent three separate operating segments, they are vertically integrated utilities providing electric service to retail customers, as well as wholesale customers, in the Southeast and have been aggregated into one reportable segment. The "All Other" presentation includes the Southern Company parent entity, which does not allocate operating expenses to business segments, and operating segments below the quantitative threshold for separate disclosure. These operating segments include providing distributed energy and resilience solutions and deploying microgrids for commercial, industrial, governmental, and utility customers, as well as investments in telecommunications. Revenues from sales by Southern Power to the traditional electric operating companies were $437 million, $371 million, and $537 million in 2025, 2024, and 2023, respectively. All other inter-segment revenues were immaterial for all periods presented.

Southern Company's CODM utilizes segment net income, including variances to budget and forecasts, to assess performance and is not provided with segment expense information. To achieve the consolidated net income goal, Southern Company's CODM sets net income expectations for each operating segment, which is expected to monitor its expenses in order to achieve its assigned net income target. Therefore, Southern Company has no reportable significant segment expenses.

Financial data for business segments and products and services for the years ended December 31, 2025, 2024, and 2023 was as follows:

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(a)Primarily consists of fuel, purchased power, cost of natural gas, cost of other sales, other operations and maintenance (including credits to income for estimated probable losses, regulatory disallowances, losses (gains) on asset dispositions, and impairment charges), taxes other than income taxes, AFUDC equity, non-service cost-related retirement benefits income, and net income (loss) attributable to noncontrolling interests.

(b)For the traditional electric operating companies, includes pre-tax credits to income at Georgia Power for the estimated probable loss associated with the construction and completion of Plant Vogtle Units 3 and 4 of $60 million ($45 million after tax) in 2025, $21 million ($16 million after tax) in 2024, and $68 million ($50 million after tax) in 2023. See Note 2 under "Georgia Power – Nuclear Construction" for additional information.

(c)For Southern Company Gas, includes pre-tax charges associated with the disallowance of certain capital investments at Nicor Gas totaling approximately $63 million ($47 million after tax) in 2025 and $96 million ($72 million after tax) in 2023. See Note 2 under "Southern Company Gas" for additional information.

(d)For Southern Power, includes accelerated depreciation related to the repowering of multiple wind facilities of $307 million ($221 million after tax, net of noncontrolling interest impacts) in 2025 and $9 million ($7 million after tax, net of noncontrolling interest impacts) in 2024. See Note 15 under "Southern Power –Wind Repowering Projects" for additional information.

(e)For All Other, includes a pre-tax loss of $252 million ($189 million after tax) associated with the extinguishment of debt at the parent company. See Note 8 under "Convertible Senior Notes" for additional information.

(f)Attributable to Southern Company.

(g)For the traditional electric operating companies, includes a pre-tax impairment loss at Alabama Power of $36 million ($27 million after tax) related to Alabama Power discontinuing the development of a multi-use commercial facility. See Note 1 under "Impairment of Long-Lived Assets" for additional information.

(h)For the traditional electric operating companies, includes a pre-tax gain at Georgia power of approximately $114 million ($84 million after tax) related to the sale of transmission line assets under the integrated transmission system agreement. See Note 2 under "Georgia Power – Transmission Asset Sales" for additional information.

(i)For Southern Power, includes an $18 million pre-tax loss recovery ($9 million after tax and partnership allocations) related to an arbitration award and a $16 million pre-tax gain ($12 million after tax) on the sale of spare parts.

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Products and Services

Each of the traditional electric operating companies' single reportable business segment is the sale of electricity. Revenues from products and services of the traditional electric operating companies are segregated into retail, wholesale, and other as reflected on their statements of income.

Alabama Power and Georgia Power have identified utility operations and maintenance expenses as significant segment expenses provided to their CODMs. Utility operations and maintenance expenses is calculated as other operations and maintenance, as reflected on the statements of income, less expenses from unregulated products and services, losses (gains) on asset dispositions, impairment charges, amortization of cloud software, and, for Georgia Power, charges (credits) for estimated loss on Plant Vogtle Units 3 and 4. Alabama Power's utility operations and maintenance expenses are disaggregated into expenses related to Rate RSE and Rate CNP Compliance. See Note 2 under "Alabama Power" for additional information.

During the third and fourth quarters of 2025, Mississippi Power updated the information provided to its CODM. As a result, Mississippi Power has identified certain operational and environmental compliance expenses as significant segment expenses and has recast prior period information to conform to the current period presentation.

Financial data for significant segment expenses and other segment information for the years ended December 31, 2025, 2024, and 2023 was as follows:

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(a)Primarily consists of fuel, purchased power, expenses from unregulated products and services, losses (gains) on asset dispositions, amortization of cloud software, taxes other than income taxes, AFUDC equity, and non-service cost-related retirement benefits income. For Alabama Power, includes impairment charges. For Georgia Power, includes credits for estimated loss on Plant Vogtle Units 3 and 4. For Mississippi Power, includes employee benefit expenses. Also includes earnings from equity method investments, which were immaterial for all periods presented.

(b)For 2024, includes a pre-tax impairment loss of $36 million ($27 million after tax) related to Alabama Power discontinuing the development of a multi-use commercial facility. See Note 1 under "Impairment of Long-Lived Assets" for additional information.

(c)Includes pre-tax credits to income for the estimated probable loss associated with the construction and completion of Plant Vogtle Units 3 and 4 of $60 million ($45 million after tax) in 2025, $21 million ($16 million after tax) in 2024, and $68 million ($50 million after tax) in 2023. See Note 2 under "Georgia Power – Nuclear Construction" for additional information.

(d)For 2024, includes a pre-tax gain of approximately $114 million ($84 million after tax) related to the sale of transmission line assets under the integrated transmission system agreement. See Note 2 under "Georgia Power – Transmission Asset Sales" for additional information.

(e)Consists of certain operations and maintenance expenses related to PEP and the MRA tariff, including labor costs, materials, contract services, and other normal operational costs. See Note 2 under "Mississippi Power" for additional information regarding PEP and the MRA tariff.

(f)Consists of environmental compliance expenses related to ECO Plan and the MRA tariff. See Note 2 under "Mississippi Power" for additional information regarding ECO Plan and the MRA tariff.

Southern Power's single reportable business segment is the sale of electricity in the competitive wholesale market. Substantially all of Southern Power's revenues from products and services are reflected as wholesale on its consolidated statements of income. Southern Power's CODM utilizes segment expense information in the form of variances to budget to assess performance; therefore, Southern Power has no reportable significant segment expenses.

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Financial data for segment information for the years ended December 31, 2025, 2024, and 2023 was as follows:

(a)Primarily consists of fuel, purchased power, other operations and maintenance, taxes other than income taxes, losses (gains) on asset dispositions, and net income (loss) attributable to noncontrolling interests.

(b)For 2023, includes an $18 million pre-tax loss recovery ($9 million after tax and partnership allocations) related to an arbitration award and a $16 million pre-tax gain ($12 million after tax) on the sale of spare parts.

(c)Includes accelerated depreciation of $307 million ($221 million after tax, net of noncontrolling interest impacts) in 2025 and $9 million ($7 million after tax, net of noncontrolling interest impacts) in 2024 related to the repowering of multiple wind facilities. See Note 15 under "Southern Power –Wind Repowering Projects" for additional information.

(d)Southern Power hadno earnings from equity method investments for any period presented.

Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services. The non-reportable segments are combined and presented as "All Other."

The gas distribution operations segment is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities infour states.

The gas pipeline investments segment consists of joint ventures in natural gas pipeline investments including a 50% interest in SNG and a 50% joint ownership interest in the Dalton Pipeline. These natural gas pipelines enable the provision of diverse sources of natural gas supplies to the customers of Southern Company Gas. See Notes 5 and 7 for additional information.

The gas marketing services segment provides natural gas marketing to end-use customers primarily in Georgia through SouthStar.

The "All Other" presentation includes operating segments and subsidiaries that fall below the quantitative threshold for separate disclosure.

Southern Company Gas' CODM utilizes segment expense information in the form of variances to budget to assess performance; therefore, Southern Company Gas has no reportable significant segment expenses.

Financial data for business segments for the years ended December 31, 2025, 2024, and 2023 was as follows:

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(a)Primarily consists of cost of natural gas, other operations and maintenance, taxes other than income taxes, estimated loss on regulatory disallowance, AFUDC equity, and non-service cost-related retirement benefits income.

(b)For gas distribution operations, includes pre-tax charges associated with the disallowance of certain capital investments at Nicor Gas totaling approximately $63 million ($47 million after tax) in 2025 and $96 million ($72 million after tax) in 2023. See Note 2 under "Southern Company Gas" for additional information.

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