ALABAMA POWER CO

Alabama Power's net income in the second quarter 2026 was$437 million compared to $381 million for the corresponding period in 2025. Theincrease was primarily due to a decrease in other operations and maintenance expenses and an increase in other income (expense), net, partially offset by an increase in depreciation and amortization.

For year-to-date 2026, net income was $862 million compared to $755 million for the corresponding period in 2025. The increase was primarily due to a decrease in other operations and maintenance expenses, an increase in other income (expense), net, and an increase within retail revenues associated with sales growth, partially offset by weather impacts and an increase in depreciation and amortization.

In the second quarter 2026, retail revenues were$1.71 billion compared to $1.72 billion for the corresponding period in 2025. For year-to-date 2026, retail revenues were $3.438 billion compared to $3.441 billion for the corresponding period in 2025. Details of the changes in retail revenues were as follows:

Changes in rates and pricing resulted in increases in revenues in the second quarter and year-to-date 2026 as compared to the corresponding periods in 2025 primarily due to an increase in Rate CNP Compliance revenues resulting from higher recoverable costs. See Note 2 to the financial statements under "Alabama Power – Rate CNP Compliance" in Item 8 of the Form 10-K for additional information.

Changes in sales resulted in a decrease in revenues in the second quarter 2026 and an increase in revenues for year-to-date 2026 as compared to the corresponding periods in 2025. Weather-adjusted residential KWH sales decreased 1.3% in the second quarter 2026 primarily due to a decrease in customer usage. Weather-adjusted residential KWH sales increased 0.5% for year-to-date 2026 primarily due to customer growth. Weather-adjusted commercial KWH sales decreased 0.9% and 0.3% in the second quarter and year-to-date 2026, respectively, primarily due to decreases in customer usage. Industrial KWH sales increased 2.0% and 3.0% in the second quarter and year-to-date 2026, respectively, primarily due to increases in the primary metals and mining sectors, partially offset by decreases in the chemicals and pulp and paper sectors.

Fuel and other cost recovery revenues decreased in the second quarter and year-to-date 2026 as compared to the corresponding periods in 2025 primarily as a result of lower recoverable fuel costs. Electric rates include provisions to recognize the recovery of fuel costs, purchased power costs, PPAs certificated by the Alabama PSC, and costs associated with the NDR. Under these provisions, fuel and other cost recovery revenues generally equal fuel and other cost recovery expenses and do not affect net income. See Note 2 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.

Wholesale Revenues– Non-Affiliates

In the second quarter 2026, wholesale revenues from sales to non-affiliates were $85 million compared to $98 million for the corresponding period in 2025. The decrease was primarily due to a decrease in non-fuel revenues from wholesale capacity contracts.

For year-to-date 2026, wholesale revenues from sales to non-affiliates were $202 million compared to $189 million for the corresponding period in 2025. The increase consisted of a $34 million increase in energy revenues due to increases of $27 million related to the volume of KWH sales associated with higher market demand and $7 million related to the average cost per KWH sold due to higher Southern Company system fuel and purchased power prices, partially offset by a $21 million decrease in non-fuel revenues from wholesale capacity contracts.

The decreases in capacity revenuesin the second quarter and year-to-date 2026 were primarily due to the expiration of a power sales agreement in December 2025, partially offset by the commencement of a new power sales agreement in October 2025 associated with the acquisition of the Lindsay Hill Generating Station. See Note 15 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.

Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Alabama 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 affect net income. Short-term opportunity energy sales are also included in wholesale energy sales to non-affiliates. These opportunity sales are made at market-based rates that generally provide a margin above Alabama Power's variable cost to produce the energy.

Wholesale Revenues– Affiliates

In the second quarter 2026, wholesale revenues from sales to affili ates were $55 million compared to $36 million for the corresponding period in 2025. The increase was primarily due to an increase of 73.9% in the volume of KWH sales due to affiliated company energy needs, partially offset by a 10.3% decrease in the price of energy due to a decrease in natural gas prices.

For year-to-date 2026, wholesale revenues from sales to affiliates were $174 million compared to $105 million for the corresponding period in 2025. The increase was primarily due to increases of 49.7% in the volume of KWH sales due to affiliated company energy needs and 11.1% in the price of energy due to an increase in natural gas prices.

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, 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 and energy purchases are generally offset by energy revenues through Alabama Power's energy cost recovery clause.

In the second quarter 2026, other revenues were $113 million compared to $116 million for the corresponding period in 2025. For year-to-date 2026, other revenues were $241 million compared to $245 million for the corresponding period in 2025. The decreases in the second quarter and year-to-date 2026 were primarily due to decreases of $8 million and $15 million, respectively, in sales of unregulated products and services and $7 million related to undistributed customer bill credits associated with nuclear fuel disposal costs litigation in May 2025, which was offset by an additional NDR accrual within other operations and maintenance expenses, partially offset by increases of $11 million and $14 million, respectively, in open access transmission tariff sales. See Note 2 to the financial statements under "Alabama Power – Rate NDR" in Item 8 of the Form 10-K for additional information.

In the second quarter 2026, total fuel and purchased power expenses were $452 million compared to $458 million for the corresponding period in 2025. The decrease was due to a $34 million decrease related to the average cost of fuel and purchased power, partially offset by a $28 million net increase related to the volume of KWHs generated and purchased.

For year-to-date 2026, total fuel and purchased power expenses were $1.03 billion compared to $0.97 billion for the corresponding period in 2025. The increase was due to a $40 million net increase related to the volume of KWHs generated and purchased and an $18 million net increase related to the average cost of fuel and purchased power.

Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Alabama Power's energy cost recovery clause. See Note 2 to the financial statements under "Alabama Power – Rate ECR" in Item 8 of the Form 10-K for additional information.

Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of 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.

Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.

Details of Alabama Power's generation and purchased power and the related costs were as follows:

(*)Average cost of purchased power includes fuel, energy, and transmission purchased by Alabama Power for tolling agreements where power is generated by the provider.

In the second quarter 2026, other operations and maintenance expenses were $415 million compared to $472 million for the corresponding period in 2025. The decrease was primarily due todecreases of $19 million associated with utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses, $15 million in expenses related to sales of unregulated products and services, and $8 million related to the acquisition of the Lindsay Hill Generating Station, as well as $12 million of deferred costs related to the Jurisdictional Separation Study Order.

For year-to-date 2026, other operations and maintenance expenses were $808 million compared to $935 million for the corresponding period in 2025. The decrease was primarily due to decreases of $40 million associated with utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses, $34 million in planned outages, $18 million in expenses related to sales of unregulated products and services, $16 million related to the acquisition of the Lindsay Hill Generating Station, and $7 million associated with an additional NDR accrual in May 2025, which was offset within other revenues, as well as $23 million of deferred costs related to the Jurisdictional Separation Study Order and $11 million associated with higher nuclear property insurance refunds. Partially offsetting the decreases was a $12 million increase in NDR accruals.

See Note (B) to the Condensed Financial Statements under "Alabama Power – Reliability Reserve Accounting Order" herein and Note 2 to the financial statements under "Alabama Power – Jurisdictional Separation Study Order" and " – Rate NDR" and Note 15 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.

In the second quarter 2026, depreciation and amortization was $385 million compared to $371 million for the corresponding period in 2025. For year-to-date 2026, depreciation and amortization was $766 million compared to $741 million for the corresponding period in 2025. The increases were primarily related to the acquisition of the Lindsay Hill Generating Station in September 2025 and other additional plant in service, partially offset by thedeferral of expenses related tothe Jurisdictional Separation Study Order. See Notes 2 and 15 to the financial statements under "Alabama Power – Jurisdictional Separation Study Order" and "Alabama Power," respectively, in Item 8 of the Form 10-K for additional information.

In the second quarter 2026, other income (expense), net was $78 million compared to $47 million for the corresponding period in 2025. For year-to-date 2026, other income (expense), net was $116 million compared to $84 million for the corresponding period in 2025. The increases were primarily due to an increase in customer charges related to contributions in aid of construction.

In the second quarter 2026, income taxes were $135 million compared to $115 million for the corresponding period in 2025. For year-to-date 2026, income taxes were $263 million compared to $226 million for the corresponding period in 2025. The increases were primarily due to higher pre-tax earnings.