ALABAMA POWER CO

Mississippi Power's net income in the second quarter 2026 was $52 million compared to $59 million for the corresponding period in 2025. For year-to-date 2026, net income was $112 million compared to $114 million for the corresponding period in 2025. The decreases were primarily due to increases in other operations and maintenance expenses and depreciation and amortization, partially offset by higher retail revenues associated with changes in rates and pricing.

In the second quarter 2026, retail revenues were $283 million compared to $274 million for the corresponding period in 2025. Foryear-to-date 2026, retail revenues were $556 million compared to$522 million 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 increases in PEP rates and higher revenues associated with a tolling arrangement accounted for as a sales-type lease. See Note 2 to the financial statements under "Mississippi Power – Performance Evaluation Plan" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under "Mississippi Power – Performance Evaluation Plan" herein for additional information.

Changes in sales resulted in increases in revenues in the second quarter and year-to-date 2026 as compared to the corresponding periods in 2025. Weather-adjusted residential KWH sales increased 1.3% in the second quarter 2026 primarily due to increased customer usage and customer growth. Weather-adjusted residential KWH sales decreased 0.3% for year-to-date 2026 primarily due to decreased customer usage. Weather-adjusted commercial KWH sales increased 1.8% and 1.6% in the second quarter and year-to-date 2026, respectively, primarily due to increased customer usage. Industrial KWH sales increased 1.1% in the second quarter 2026 primarily due to increases in the petroleum and pipeline sectors, partially offset by decreases in the oil and gas extraction sectors. Industrial KWH sales decreased 0.1% for year-to-date 2026 primarily due to decreases in the chemicals and oil and gas extraction sectors, largely offset by increases in the petroleum and pipeline sectors.

Fuel and other cost recovery revenues decreased in the second quarter 2026 as compared to the corresponding period in 2025 primarily as a result of lower recoverable fuel costs. Fuel and other cost recovery revenues increased for year-to-date 2026 as compared to the corresponding period in 2025 primarily as a result of higher recoverable fuel costs. Recoverable fuel costs include fuel and purchased power expenses reduced by the fuel and emissions portion of wholesale revenues from energy sold to customers outside Mississippi Power's service territory. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of purchased power costs, and do not affect net income. See Note 2 to the financial statements 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 $74 million compared to $62 million for the corresponding period in 2025. The increase was primarily due to a $13 million increase associated with new and existing power supply agreements.

For year-to-date 2026, wholesale revenues from sales to non-affiliates were $162 million compared to $133 million for the corresponding period in 2025. The increase was primarily due to a $17 million increase associated with new and existing power supply agreements and an $11 million increase in opportunity sales.

Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Mississippi 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 have a significant impact on net income. Inaddition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and municipalities located in southeastern Mississippi under cost-based electric tariffs which are subject to regulation by the FERC. Short-term opportunity energy sales are also included in sales for resale to non-affiliates. These opportunity sales are made at market-based rates that generally provide a margin above Mississippi Power's variable cost to produce the energy. See Note 2 to the financial statements under "Mississippi Power – Municipal and Rural Associations Tariff" in Item 8 of the Form 10-K for additional information.

Wholesale Revenues – Affiliates

In the second quarter 2026, wholesale revenues from sales to affiliates were $35 million compared to $55 million for the corresponding period in 2025. The decrease was primarily due to decreases of $16 million related to the volume of KWH sales and $4 million related to the price of energy driven by natural gas prices.

For year-to-date 2026, wholesale revenues from sales to affiliates were $131 million compared to $136 million for the corresponding period in 2025. The decrease was primarily due to a $14 million decrease related to the volume of KWH sales, partially offset by a $10 million increase related to the price of energy driven by 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 or other contractual agreements, 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.

For year-to-date 2026, other revenues were $26 million compared to $30 million for the corresponding period in 2025. The decrease was primarily due to an $8 million decrease in customer charges related to contributions in aid of construction included in rates in 2025, partially offset by a $4 million increase in sales of unregulated products and services.

In the second quarter 2026, total fuel and purchased power expenses were $122 million compared to $143 million for the corresponding period in 2025. The decrease was due to an $11 million decrease related to the volume of KWHs generated and purchased and a $10 million net decrease related to the average cost of fuel and purchased power.

Foryear-to-date 2026, total fuel and purchased power expenses were $328 million compared to$309 million for the corresponding period in 2025. Theincrease was due to a $29 million increase related to the average cost of fuel and purchased power, of which $9 million is related to capacity, partially offset by a $10 million decrease related to the volume of KWHs generated and purchased.

Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clause.

Energy purchases 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. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.

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

In the second quarter 2026, other operations and maintenance expenses were $107 million compared to $82 million for the corresponding period in 2025. The increase was primarily due to increases of $10 million associated with a decrease in utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses, $9 million in generation expenses, and $4 million in distribution and transmission expenses.

For year-to-date 2026, other operations and maintenance expenses were $194 million compared to $166 million for the corresponding period in 2025. The increase was primarily due to increases of $13 million in generation expenses, $4 million associated with a decrease in utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses, $4 million related to distribution expenses, and $3 million in expenses associated with unregulated products and services.

See Note (B) to the Condensed Financial Statements under "Mississippi Power – Reliability Reserve Accounting Order" herein for additional information.

In the second quarter 2026, depreciation and amortization was $58 million compared to $52 million for the corresponding period in 2025. For year-to-date 2026, depreciation and amortization was $113 million compared to $105 million for the corresponding period in 2025. The increases were primarily due to additional plant in service.