Southern Company — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported third-quarter 2026 net income of $2.0 billion ($1.77 per share), up from $1.7 billion ($1.55 per share) in the same period in 2025.
• Year-to-date 2026 net income was $4.6 billion ($4.02 per share), compared to $3.9 billion ($3.56 per share) for the same period in 2025.
• Non-GAAP net income excluding items for the third quarter of 2026 was $2.2 billion ($1.94 per share), compared to $1.8 billion ($1.60 per share) in 2025.
• Year-to-date non-GAAP net income excluding items was $5.0 billion ($4.40 per share), compared to $4.1 billion ($3.76 per share) in 2025.
• Third-quarter 2026 operating revenues were $8.8 billion, a 13.0% increase from $7.8 billion in 2025.
• Year-to-date operating revenues were $24.2 billion, a 7.3% increase from $22.6 billion in 2025.
• Third-quarter 2026 earnings before income taxes were $2.5 billion, a 20.6% increase from $2.1 billion in 2025.
• Year-to-date earnings before income taxes were $5.5 billion, a 14.3% increase from $4.8 billion in 2025.
• Traditional Electric Operating Companies contributed $2.3 billion in net income for the quarter (up from $1.9 billion) and $4.7 billion for the year (up from $4.0 billion).
• Southern Power reported $52 million in net income for the quarter (up from $3 million) and $30 million for the year (up from $141 million).
• Southern Company Gas reported $21 million in net income for the quarter (down from $25 million) and $593 million for the year (up from $549 million).
• Average shares outstanding were 1,157 million for the quarter (up from 1,102 million) and 1,139 million for the year (up from 1,101 million).

Guidance and Future Outlook:

• Management stated the Southeast is growing at an "unprecedented and transformational" pace and that the company is well-positioned for the future.
• Accelerated depreciation and decommissioning costs associated with wind facility repowering are projected to continue through the third quarter of 2027.
• Remaining pre-tax accelerated depreciation and decommissioning costs are projected to total approximately $100 million in 2026 and $135 million in 2027.
• Management highlighted the importance of reliable energy and a customer-focused strategy to serve growing demand.

Business Segments and Product Lines:

• Traditional Electric Operating Companies: Net income increased by $0.32 per share in the quarter and $0.60 per share year-to-date.
• Southern Power: Net income increased by $0.04 per share in the quarter but decreased by $0.10 per share year-to-date.
• Southern Company Gas: Net income per share remained flat in the quarter but increased by $0.04 per share year-to-date.
• Parent Company and Other: Net income per share decreased by $0.05 per share in the quarter and increased by $0.06 per share year-to-date.
• Drivers for third-quarter earnings growth included warmer weather, increased usage, customer growth, and growing revenue from large commercial and industrial customers.
• Higher non-fuel operating expenses and taxes other than income taxes partially offset earnings growth.
• Dilution impacts from additional shares outstanding reduced earnings per share.
• Retail electric revenues increased by $690 million in the quarter and $755 million year-to-date.
• Wholesale electric revenues increased by $41 million in the quarter and $280 million year-to-date.
• Natural gas revenues increased by $39 million in the quarter and $378 million year-to-date.
• Total kilowatt-hour sales increased 7.3% in the quarter and 5.0% year-to-date.
• Total retail sales increased 7.7% in the quarter and 3.6% year-to-date.
• Total regulated utility customers increased 0.7% to 8,996 thousand as of September 2026.

Market and Competitive Landscape:

• The company serves 9 million customers across the Southeast and beyond.
• The company operates electric companies in three states, natural gas distribution companies in four states, a competitive generation company, a distributed energy solutions provider, a fiber optics network, and telecommunications services.
• The company employs nearly 30,000 people.
• Management cited significant growth in electricity demand driven primarily by data centers and other large load customers as a key market trend.
• The company faces competition from the development and deployment of alternative energy sources.

Risks and Challenges:

• Regulatory and Legal: Risks include federal and state legal and regulatory changes (tax, environmental), coal combustion residuals costs, litigation, and regulatory investigations.
• Demand and Generation: Variations in demand, uncertainties regarding data center growth requiring substantial new generation and transmission investments, and capital access/revenue recovery risks.
• Costs and Operations: Challenges include labor costs, availability, and productivity; contractor performance; adverse weather; shortages; delays; inflation; trade policies; and operational readiness.
• Project Execution: Risks related to construction projects, including delays, cost overruns, engineering problems, and licensing compliance.
• Financial: Changes in interest rates, financing costs, credit ratings, and counterparty performance.
• Environmental and Safety: Inherent risks of nuclear facilities, accidents, explosions, fires, and environmental releases.
• Technology: Pace of low- to no-carbon energy and battery storage development.
• Specific Asset Issues: Estimated losses on Nicor Gas capital investments disallowed by the Illinois Commerce Commission; estimated probable loss on Plant Vogtle Units 3 and 4 due to tax rate changes; dismantlement of the Kemper County gasifier facility.

Management Commentary and Tone:

• Chris Womack, Chairman, President, and CEO, emphasized the company's scale, experience, and customer-focused strategy.
• Management expressed pride in improving communities and states served.
• The tone was confident regarding the company's ability to serve growing demand in a responsible and sustainable manner.
• CFO David P. Poroch and CEO Chris Womack discussed earnings and provided a general business update during the analyst call.

Other Key Points:

• Debt Extinguishment: Third-quarter 2026 included $43 million in costs associated with the repurchase of convertible senior notes and redemption of junior subordinated notes. Year-to-date costs were $54 million.
• Nicor Gas Investments: Third-quarter 2026 included an estimated loss of $9 million related to capital investments disallowed by the Illinois Commerce Commission. Year-to-date loss was $19 million.
• Disposition Impacts: Year-to-date 2026 included a state income tax refund of $9 million associated with the 2018 disposition of Elizabethtown Gas, offset by contingency fees.
• Accelerated Depreciation: Third-quarter 2026 included $118 million in pre-tax charges for accelerated depreciation and decommissioning costs related to wind facility repowering. Year-to-date charges were $414 million.
• Plant Vogtle: Earnings included income tax charges related to the remeasuring of deferred tax assets for Plant Vogtle Units 3 and 4 due to changes in the Georgia corporate tax rate.
• Kemper County: Dismantlement of the abandoned gasifier-related assets was completed at the end of 2025, and site restoration activities are substantially complete.
• Investor Relations: Financial analyst call and webcast replay available at investor.southerncompany.com.