ALABAMA POWER CO

Mississippi Power's net income in the third quarter 2026 was $89 million compared to $84 million for the corresponding period in 2025. The increase was primarily due to an increase in non-fuel wholesale revenues, partially offset by a decrease in other revenues.

For year-to-date 2026, net income was $201 million compared to $198 million for the corresponding period in 2025. The increase was primarily due to higher retail revenues associated with changes in rates and pricing and an increase in non-fuel wholesale revenues, largely offset by increases in other operations and maintenance expenses and depreciation and amortization and a decrease in other revenues.

Retail revenues were $302 million in both the third quarter 2026 and the corresponding period in 2025. Foryear-to-date 2026, retail revenues were $857 million compared to$824 million for the corresponding period in 2025. Details of the changes in retail revenues were as follows:

Changes in rates and pricing resulted in a decrease in revenues in the third quarter 2026 as compared to the corresponding period in 2025 primarily due to the expiration of a PEP surcharge at the end of 2025 that became effective for the first billing cycle of July 2025. Changes in rates and pricing resulted in an increase in revenues for year-to-date 2026 as compared to the corresponding period in 2025 primarily due to an increase 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 third quarter and year-to-date 2026 as compared to the corresponding periods in 2025. Weather-adjusted residential KWH sales increased 2.3% and 0.7% in the third quarter and year-to-date 2026, respectively, primarily due to increased customer usage. Weather-adjusted commercial KWH sales increased 2.9% and 2.1% in the third quarter and year-to-date 2026, respectively, primarily due to increased customer usage. Industrial KWH sales increased 3.3% in the third quarter 2026 primarily due to increases in the petroleum and chemicals sectors. Industrial KWH sales increased 1.0% for year-to-date 2026 primarily due to increases in the petroleum and pipeline sectors, partially offset by decreases in the oil and gas extraction and chemicals sectors.

Fuel and other cost recovery revenues decreased in the third quarter and year-to-date 2026 as compared to the corresponding periods in 2025 primarily as a result of lower 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 third quarter 2026, wholesale revenues from sales to non-affiliates were $89 million compared to $72 million for the corresponding period in 2025. The increase was primarily due to a $19 million increase associated with new and existing power supply agreements, of which $10 million related to capacity sales and $9 million related to energy sales.

For year-to-date 2026, wholesale revenues from sales to non-affiliates were $251 million compared to $205 million for the corresponding period in 2025. The increase was primarily due to a $36 million increase associated with new and existing power supply agreements, of which $21 million related to capacity sales and $15 million related to energy sales, and a $10 million increase in opportunity sales primarily due to higher market demand.

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 third quarter 2026, wholesale revenues from sales to affiliates were $98 million compared to $94 million for the corresponding period in 2025. The increase was primarily due to a $3 million increase in energy revenues due to an increase of $13 million related to the average cost per KWH sold due to higher Southern Company system fuel prices, largely offset by a decrease of $10 million related to the volume of KWH sales.

For year-to-date 2026, wholesale revenues from sales to affiliates were $229 million compared to $230 million for the corresponding period in 2025. The decrease was primarily due to a $2 million decrease in energy revenues due to a decrease of $24 million related to the volume of KWH sales, largely offset by an increase of $22 million related to the average cost per KWH sold due to higher Southern Company system fuel 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.

In the third quarter 2026, other revenues were $8 million compared to $12 million for the corresponding period in 2025. The decrease was primarily due to customer bill credits associated with certain federal excess accumulated deferred income taxes.

For year-to-date 2026, other revenues were $35 million compared to $42 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 and a $4 million decrease due to customer bill credits associated with certain federal excess accumulated deferred income taxes, partially offset by a $5 million increase in sales of unregulated products and services.

See Note (B) to the Condensed Financial Statements under "Mississippi Power – Excess Accumulated Deferred Income Tax Accounting Order" herein for additional information.

Foryear-to-date 2026, total fuel and purchased power expenses were $508 million compared to$488 million for the corresponding period in 2025. The increase was due to a $29 million increase related to the average cost of fuel and purchased power, of which $11 million is related to capacity, partially offset by a $9 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 third quarter 2026, other operations and maintenance expenses were $97 million compared to $94 million for the corresponding period in 2025. The increase was primarily due to an increase of $7 million in generation expenses, partially offset by a decrease of $3 million in transmission expenses primarily due to routine maintenance.

For year-to-date 2026, other operations and maintenance expenses were $291 million compared to $261 million for the corresponding period in 2025. The increase was primarily due to increases of $20 million in generation expenses, $5 million related to distribution expenses, and $4 million associated with a decrease in utilization of the reliability reserve to offset reliability-related transmission, distribution, and generation expenses.

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

In the third quarter 2026, depreciation and amortization was $56 million compared to $53 million for the corresponding period in 2025. For year-to-date 2026, depreciation and amortization was $170 million compared to $157 million for the corresponding period in 2025. The increases were primarily due to additional plant in service.