Item 1. Financial Statements (Unaudited).

			Page
The Southern Company and Subsidiary Companies:
Condensed Consolidated Statements of Income			10
Condensed Consolidated Statements of Comprehensive Income			11
Condensed Consolidated Statements of Cash Flows			12
Condensed Consolidated Balance Sheets			13
Condensed Consolidated Statements of Stockholders' Equity			15
Alabama Power Company:
Condensed Statements of Income			16
Condensed Statements of Comprehensive Income			16
Condensed Statements of Cash Flows			17
Condensed Balance Sheets			18
Condensed Statements of Common Stockholder's Equity			20
Georgia Power Company:
Condensed Statements of Income			21
Condensed Statements of Comprehensive Income			21
Condensed Statements of Cash Flows			22
Condensed Balance Sheets			23
Condensed Statements of Common Stockholder's Equity			25
Mississippi Power Company:
Condensed Statements of Income and Comprehensive Income			26
Condensed Statements of Cash Flows			27
Condensed Balance Sheets			28
Condensed Statements of Common Stockholder's Equity			30
Southern Power Company and Subsidiary Companies:
Condensed Consolidated Statements of Income			31
Condensed Consolidated Statements of Comprehensive Income			31
Condensed Consolidated Statements of Cash Flows			32
Condensed Consolidated Balance Sheets			33
Condensed Consolidated Statements of Stockholders' Equity			35
Southern Company Gas and Subsidiary Companies:
Condensed Consolidated Statements of Income			36
Condensed Consolidated Statements of Comprehensive Income			36
Condensed Consolidated Statements of Cash Flows			37
Condensed Consolidated Balance Sheets			38
Condensed Consolidated Statements of Stockholder's Equity			40
Combined Notes to the Condensed Financial Statements			41

Table of Contents Index to Financial Statements

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Operating Revenues:
Retail electric revenues															$	3,613					$	3,342
Wholesale electric revenues															664						545
Other electric revenues															177						170
Natural gas revenues (includes alternative revenue programs of $— and $2, respectively)															2,058						1,694
Other revenues															136						159
Total operating revenues															6,648						5,910
Operating Expenses:
Fuel															1,111						848
Purchased power															232						207
Cost of natural gas															1,095						583
Cost of other sales															69						82
Other operations and maintenance															1,516						1,372
Depreciation and amortization															892						871
Taxes other than income taxes															372						345
Estimated loss on Plant Vogtle Units 3 and 4															—						48
Gain on dispositions, net															(23)						(44)
Total operating expenses															5,264						4,312
Operating Income															1,384						1,598
Other Income and (Expense):
Allowance for equity funds used during construction															51						46
Earnings from equity method investments															46						45
Interest expense, net of amounts capitalized															(462)						(450)
Other income (expense), net															145						58
Total other income and (expense)															(220)						(301)
Earnings Before Income Taxes															1,164						1,297
Income taxes															173						190
Consolidated Net Income															991						1,107
Dividends on preferred stock of subsidiaries															4						4
Net loss attributable to noncontrolling interests															(45)						(32)
Consolidated Net Income Attributable to Southern Company															$	1,032					$	1,135
Common Stock Data:
Earnings per share -
Basic															$	0.97					$	1.07
Diluted															$	0.97					$	1.06
Average number of shares of common stock outstanding (in millions)
Basic															1,063						1,060
Diluted															1,069						1,066

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Consolidated Net Income															$	991					$	1,107
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $8 and $(10), respectively															19						(30)
Reclassification adjustment for amounts included in net income, net of tax of $6 and $18, respectively															20						55
Pension and other postretirement benefit plans:
Reclassification adjustment for amounts included in net income, net of tax of $1 and $1, respectively															3						3
Total other comprehensive income															42						28
Comprehensive Income															1,033						1,135
Dividends on preferred stock of subsidiaries															4						4
Comprehensive loss attributable to noncontrolling interests															(45)						(32)
Consolidated Comprehensive Income Attributable to Southern Company															$	1,074					$	1,163

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

			For the Three Months Ended March 31,
			2022						2021
			(in millions)
Operating Activities:
Consolidated net income			$	991					$	1,107
Adjustments to reconcile consolidated net income to net cash provided from operating activities —
Depreciation and amortization, total			989						964
Deferred income taxes			40						140
Allowance for equity funds used during construction			(51)						(46)
Pension, postretirement, and other employee benefits			(123)						(78)
Settlement of asset retirement obligations			(87)						(109)
Stock based compensation expense			85						83
Estimated loss on Plant Vogtle Units 3 and 4			—						48
Storm damage accruals			52						54
Gain on dispositions, net			(20)						(41)
Natural gas cost under recovery – long-term			162						(185)
Retail fuel cost under recovery – long-term			(130)						—
Other, net			7						114
Changes in certain current assets and liabilities —
-Receivables			(217)						308
-Prepayments			(86)						(98)
-Materials and supplies			(28)						(27)
-Natural gas for sale, net of temporary LIFO liquidation			450						456
-Natural gas cost under recovery			(40)						(487)
-Other current assets			87						90
-Accounts payable			132						(216)
-Accrued taxes			(58)						(212)
-Accrued compensation			(470)						(417)
-Accrued interest			(128)						(90)
-Retail fuel cost over recovery			—						(53)
-Other current liabilities			35						(63)
Net cash provided from operating activities			1,592						1,242
Investing Activities:
Business acquisitions, net of cash acquired			—						(345)
Property additions			(1,419)						(1,678)
Nuclear decommissioning trust fund purchases			(294)						(550)
Nuclear decommissioning trust fund sales			289						546
Cost of removal, net of salvage			(227)						(85)
Change in construction payables, net			23						(116)
Payments pursuant to LTSAs			(37)						(60)
Other investing activities			110						45
Net cash used for investing activities			(1,555)						(2,243)
Financing Activities:
Increase in notes payable, net			137						182
Proceeds —
Long-term debt			700						2,150
Short-term borrowings			850						325
Common stock			38						14
Redemptions and repurchases —
Long-term debt			(977)						(384)
Short-term borrowings			(100)						(25)
Capital contributions from noncontrolling interests			73						313
Distributions to noncontrolling interests			(97)						(46)
Payment of common stock dividends			(702)						(678)
Other financing activities			(115)						(117)
Net cash provided from (used for) financing activities			(193)						1,734
Net Change in Cash, Cash Equivalents, and Restricted Cash			(156)						733
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			1,829						1,068
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	1,673					$	1,801
Supplemental Cash Flow Information:
Cash paid (received) during the period for —
Interest (net of $23 and $21 capitalized for 2022 and 2021, respectively)			$	515					$	519
Income taxes, net			(8)						(51)
Noncash transactions —
Accrued property additions at end of period			863						872
Contributions from noncontrolling interests			—						89
Contributions of wind turbine equipment			—						82
Right-of-use assets obtained under leases			3						76
Reassessment of right-of-use assets under operating leases			40						—

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Assets						At March 31, 2022						At December 31, 2021
						(in millions)
Current Assets:
Cash and cash equivalents						$	1,662					$	1,798
Receivables —
Customer accounts						2,006						1,806
Unbilled revenues						638						711
Other accounts and notes						509						523
Accumulated provision for uncollectible accounts						(89)						(78)
Materials and supplies						1,571						1,543
Fossil fuel for generation						411						450
Natural gas for sale						121						362
Prepaid expenses						739						330
Assets from risk management activities, net of collateral						405						151
Regulatory assets – asset retirement obligations						241						219
Natural gas cost under recovery						306						266
Other regulatory assets						576						653
Other current assets						201						231
Total current assets						9,297						8,965
Property, Plant, and Equipment:
In service						116,259						115,592
Less: Accumulated depreciation						34,645						34,079
Plant in service, net of depreciation						81,614						81,513
Nuclear fuel, at amortized cost						839						824
Construction work in progress						9,337						8,771
Total property, plant, and equipment						91,790						91,108
Other Property and Investments:
Goodwill						5,280						5,280
Nuclear decommissioning trusts, at fair value						2,403						2,542
Equity investments in unconsolidated subsidiaries						1,293						1,282
Other intangible assets, net of amortization of $317 and $307, respectively						435						445
Miscellaneous property and investments						633						653
Total other property and investments						10,044						10,202
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization						1,693						1,701
Deferred charges related to income taxes						833						824
Prepaid pension costs						1,772						1,657
Unamortized loss on reacquired debt						257						258
Regulatory assets – asset retirement obligations, deferred						5,683						5,466
Other regulatory assets, deferred						5,372						5,577
Other deferred charges and assets						1,898						1,776
Total deferred charges and other assets						17,508						17,259
Total Assets						$	128,639					$	127,534

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholders' Equity						At March 31, 2022						At December 31, 2021
						(in millions)
Current Liabilities:
Securities due within one year						$	1,193					$	2,157
Notes payable						2,330						1,440
Accounts payable						2,251						2,169
Customer deposits						454						479
Accrued taxes —
Accrued income taxes						57						50
Other accrued taxes						415						641
Accrued interest						404						533
Accrued compensation						574						1,070
Asset retirement obligations						695						697
Operating lease obligations						245						250
Other regulatory liabilities						711						563
Other current liabilities						1,105						872
Total current liabilities						10,434						10,921
Long-term Debt						50,633						50,120
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes						9,506						8,862
Deferred credits related to income taxes						5,365						5,401
Accumulated deferred ITCs						2,196						2,216
Employee benefit obligations						1,526						1,550
Operating lease obligations, deferred						1,521						1,503
Asset retirement obligations, deferred						11,016						10,990
Other cost of removal obligations						2,030						2,103
Other regulatory liabilities, deferred						526						485
Other deferred credits and liabilities						966						816
Total deferred credits and other liabilities						34,652						33,926
Total Liabilities						95,719						94,967
Redeemable Preferred Stock of Subsidiaries						291						291
Total Stockholders' Equity (See accompanying statements)						32,629						32,276
Total Liabilities and Stockholders' Equity						$	128,639					$	127,534

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

			Southern Company Common Stockholders' Equity
			Number of Common Shares												Common Stock																								Accumulated Other Comprehensive Income (Loss)
			Issued						Treasury						Par Value						Paid-In Capital						Treasury						Retained Earnings									Noncontrolling Interests						Total
			(in millions)
Balance at December 31, 2020			1,058						(1)						$	5,268					$	11,834					$	(46)					$	11,311					$	(395)								$	4,262					$	32,234
Consolidated net income (loss)			—						—						—						—						—						1,135						—									(32)						1,103
Other comprehensive income			—						—						—						—						—						—						28									—						28
Stock issued			2						—						5						9						—						—						—									—						14
Stock-based compensation			—						—						—						9						—						—						—									—						9
Cash dividends of $0.64 per share			—						—						—						—						—						(678)						—									—						(678)
Capital contributions from noncontrolling interests			—						—						—						—						—						—						—									403						403
Distributions to noncontrolling interests			—						—						—						—						—						—						—									(46)						(46)
Other			—						—						—						2						—						—						—									(1)						1
Balance at March 31, 2021			1,060						(1)						$	5,273					$	11,854					$	(46)					$	11,768					$	(367)								$	4,586					$	33,068

Balance at December 31, 2021			1,061						(1)						$	5,279					$	11,950					$	(47)					$	10,929					$	(237)								$	4,402					$	32,276
Consolidated net income (loss)			—						—						—						—						—						1,032						—									(45)						987
Other comprehensive income			—						—						—						—						—						—						42									—						42
Stock issued			3						—						7						31						—						—						—									—						38
Stock-based compensation			—						—						—						6						—						—						—									—						6
Cash dividends of $0.66 per share			—						—						—						—						—						(702)						—									—						(702)
Capital contributions from noncontrolling interests			—						—						—						—						—						—						—									73						73
Distributions to noncontrolling interests			—						—						—						—						—						—						—									(98)						(98)
Other			—						—						—						7						(2)						2						—									—						7
Balance at March 31, 2022			1,064						(1)						$	5,286					$	11,994					$	(49)					$	11,261					$	(195)								$	4,332					$	32,629

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

ALABAMA POWER COMPANY

CONDENSED STATEMENTS OF INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Operating Revenues:
Retail revenues															$	1,379					$	1,352
Wholesale revenues, non-affiliates															114						92
Wholesale revenues, affiliates															65						32
Other revenues															91						83
Total operating revenues															1,649						1,559
Operating Expenses:
Fuel															333						291
Purchased power, non-affiliates															67						50
Purchased power, affiliates															26						30
Other operations and maintenance															409						361
Depreciation and amortization															215						211
Taxes other than income taxes															104						103
Total operating expenses															1,154						1,046
Operating Income															495						513
Other Income and (Expense):
Allowance for equity funds used during construction															16						12
Interest expense, net of amounts capitalized															(89)						(84)
Other income (expense), net															36						32
Total other income and (expense)															(37)						(40)
Earnings Before Income Taxes															458						473
Income taxes															107						110
Net Income															351						363
Dividends on Preferred Stock															4						4
Net Income After Dividends on Preferred Stock															$	347					$	359

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Net Income															$	351					$	363
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $(1) and $—, respectively															(1)						—
Reclassification adjustment for amounts included in net income, net of tax of $— and $—, respectively															1						1
Total other comprehensive income															—						1
Comprehensive Income															$	351					$	364

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

ALABAMA POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

			For the Three Months Ended March 31,
			2022						2021
			(in millions)
Operating Activities:
Net income			$	351					$	363
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total			250						248
Deferred income taxes			35						33
Pension, postretirement, and other employee benefits			(48)						(29)
Settlement of asset retirement obligations			(38)						(49)
Retail fuel cost under recovery – long-term			(46)						—
Other, net			(27)						(14)
Changes in certain current assets and liabilities —
-Receivables			(4)						40
-Fossil fuel stock			23						38
-Prepayments			(85)						(73)
-Other current assets			(10)						(16)
-Accounts payable			(237)						(299)
-Accrued taxes			102						104
-Accrued compensation			(99)						(105)
-Retail fuel cost over recovery			—						(18)
-Other current liabilities			(13)						(9)
Net cash provided from operating activities			154						214
Investing Activities:
Property additions			(343)						(466)
Nuclear decommissioning trust fund purchases			(72)						(310)
Nuclear decommissioning trust fund sales			72						310
Cost of removal, net of salvage			(60)						(23)
Change in construction payables			39						32
Other investing activities			(1)						(9)
Net cash used for investing activities			(365)						(466)
Financing Activities:
Proceeds — Senior notes			700						—
Redemptions — Senior notes			(550)						—
Capital contributions from parent company			625						600
Payment of common stock dividends			(254)						(246)
Other financing activities			(17)						(13)
Net cash provided from financing activities			504						341
Net Change in Cash, Cash Equivalents, and Restricted Cash			293						89
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			1,060						530
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	1,353					$	619
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $4 and $3 capitalized for 2022 and 2021, respectively)			$	110					$	93
Noncash transactions —
Accrued property additions at end of period			188						198
Right-of-use assets obtained under leases			1						1

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

ALABAMA POWER COMPANY

CONDENSED BALANCE SHEETS (UNAUDITED)

Assets						At March 31, 2022						At December 31, 2021
						(in millions)
Current Assets:
Cash and cash equivalents						$	1,353					$	1,060
Receivables —
Customer accounts						417						410
Unbilled revenues						127						138
Affiliated						36						37
Other accounts and notes						64						55
Accumulated provision for uncollectible accounts						(15)						(14)
Fossil fuel stock						136						159
Materials and supplies						550						548
Prepaid expenses						126						41
Other regulatory assets						191						208
Other current assets						131						67
Total current assets						3,116						2,709
Property, Plant, and Equipment:
In service						33,333						33,135
Less: Accumulated provision for depreciation						10,451						10,313
Plant in service, net of depreciation						22,882						22,822
Nuclear fuel, at amortized cost						246						247
Construction work in progress						1,249						1,147
Total property, plant, and equipment						24,377						24,216
Other Property and Investments:
Nuclear decommissioning trusts, at fair value						1,257						1,325
Equity investments in unconsolidated subsidiaries						57						57
Miscellaneous property and investments						126						126
Total other property and investments						1,440						1,508
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization						97						108
Deferred charges related to income taxes						243						240
Prepaid pension and other postretirement benefit costs						546						513
Regulatory assets – asset retirement obligations						1,663						1,547
Other regulatory assets, deferred						1,717						1,807
Other deferred charges and assets						371						334
Total deferred charges and other assets						4,637						4,549
Total Assets						$	33,570					$	32,982

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

ALABAMA POWER COMPANY

CONDENSED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholder's Equity						At March 31, 2022						At December 31, 2021
						(in millions)
Current Liabilities:
Securities due within one year						$	201					$	751
Accounts payable —
Affiliated						194						309
Other						372						459
Customer deposits						106						106
Accrued taxes						200						98
Accrued interest						77						100
Accrued compensation						124						219
Asset retirement obligations						322						320
Other regulatory liabilities						148						215
Other current liabilities						128						125
Total current liabilities						1,872						2,702
Long-term Debt						9,631						8,936
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes						3,619						3,573
Deferred credits related to income taxes						1,959						1,968
Accumulated deferred ITCs						86						88
Employee benefit obligations						179						171
Operating lease obligations						64						66
Asset retirement obligations, deferred						4,013						4,014
Other cost of removal obligations						144						192
Other regulatory liabilities, deferred						224						210
Other deferred credits and liabilities						56						58
Total deferred credits and other liabilities						10,344						10,340
Total Liabilities						21,847						21,978
Redeemable Preferred Stock						291						291
Common Stockholder's Equity (See accompanying statements)						11,432						10,713
Total Liabilities and Stockholder's Equity						$	33,570					$	32,982

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

ALABAMA POWER COMPANY

CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)

			Number of Common Shares Issued						Common Stock						Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Total
			(in millions)
Balance at December 31, 2020			31						$	1,222					$	5,413					$	3,194					$	(19)					$	9,810
Net income after dividends on preferred stock			—						—						—						359						—						359
Capital contributions from parent company			—						—						602						—						—						602
Other comprehensive income			—						—						—						—						1						1
Cash dividends on common stock			—						—						—						(246)						—						(246)
Balance at March 31, 2021			31						$	1,222					$	6,015					$	3,307					$	(18)					$	10,526
Balance at December 31, 2021			31						$	1,222					$	6,056					$	3,448					$	(13)					$	10,713
Net income after dividends on preferred stock			—						—						—						347						—						347
Capital contributions from parent company			—						—						626						—						—						626
Cash dividends on common stock			—						—						—						(254)						—						(254)
Balance at March 31, 2022			31						$	1,222					$	6,682					$	3,541					$	(13)					$	11,432

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

GEORGIA POWER COMPANY

CONDENSED STATEMENTS OF INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Operating Revenues:
Retail revenues															$	2,017					$	1,787
Wholesale revenues															66						43
Other revenues															125						140
Total operating revenues															2,208						1,970
Operating Expenses:
Fuel															419						313
Purchased power, non-affiliates															150						144
Purchased power, affiliates															206						136
Other operations and maintenance															517						474
Depreciation and amortization															351						338
Taxes other than income taxes															125						116
Estimated loss on Plant Vogtle Units 3 and 4															—						48
Total operating expenses															1,768						1,569
Operating Income															440						401
Other Income and (Expense):
Allowance for equity funds used during construction															32						31
Interest expense, net of amounts capitalized															(107)						(104)
Other income (expense), net															50						41
Total other income and (expense)															(25)						(32)
Earnings Before Income Taxes															415						369
Income taxes															30						18
Net Income															$	385					$	351

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Net Income															$	385					$	351
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $3 and $—, respectively															9						—
Reclassification adjustment for amounts included in net income, net of tax of $1 and $—, respectively															1						2
Total other comprehensive income															10						2
Comprehensive Income															$	395					$	353

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

GEORGIA POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

			For the Three Months Ended March 31,
			2022						2021
			(in millions)
Operating Activities:
Net income			$	385					$	351
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total			397						384
Deferred income taxes			(6)						(86)
Pension, postretirement, and other employee benefits			(63)						(43)
Settlement of asset retirement obligations			(41)						(49)
Storm damage accruals			53						53
Retail fuel cost under recovery – long-term			(84)						—
Estimated loss on Plant Vogtle Units 3 and 4			—						48
Other, net			(85)						(19)
Changes in certain current assets and liabilities —
-Receivables			—						176
-Prepaid income taxes			(36)						—
-Other current assets			22						4
-Accounts payable			39						(74)
-Accrued taxes			(78)						(110)
-Accrued compensation			(79)						(68)
-Accrued interest			(43)						(34)
-Other current liabilities			(20)						(44)
Net cash provided from operating activities			361						489
Investing Activities:
Property additions			(749)						(775)
Nuclear decommissioning trust fund purchases			(221)						(241)
Nuclear decommissioning trust fund sales			217						236
Cost of removal, net of salvage			(140)						(40)
Change in construction payables, net of joint owner portion			14						(103)
Proceeds from dispositions			56						1
Other investing activities			14						9
Net cash used for investing activities			(809)						(913)
Financing Activities:
Increase in notes payable, net			410						145
Proceeds —
Senior notes			—						750
Short-term borrowings			450						—
Redemptions and repurchases —
Senior notes			(400)						(325)
FFB loan			(24)						(25)
Capital contributions from parent company			445						330
Payment of common stock dividends			(423)						(412)
Other financing activities			(17)						(19)
Net cash provided from financing activities			441						444
Net Change in Cash, Cash Equivalents, and Restricted Cash			(7)						20
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			33						9
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	26					$	29
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $16 and $15 capitalized for 2022 and 2021, respectively)			$	139					$	128
Noncash transactions —
Accrued property additions at end of period			459						445
Right-of-use assets obtained under operating leases			1						3

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

GEORGIA POWER COMPANY

CONDENSED BALANCE SHEETS (UNAUDITED)

Assets						At March 31, 2022						At December 31, 2021
						(in millions)
Current Assets:
Cash and cash equivalents						$	26					$	33
Receivables —
Customer accounts, net						561						547
Unbilled revenues						216						231
Joint owner accounts						60						116
Affiliated						12						25
Other accounts and notes						35						44
Fossil fuel stock						231						248
Materials and supplies						681						670
Regulatory assets – storm damage						4						48
Regulatory assets – asset retirement obligations						200						178
Assets from risk management activities						162						48
Other regulatory assets						248						241
Other current assets						124						130
Total current assets						2,560						2,559
Property, Plant, and Equipment:
In service						41,592						41,332
Less: Accumulated provision for depreciation						13,029						12,854
Plant in service, net of depreciation						28,563						28,478
Nuclear fuel, at amortized cost						593						577
Construction work in progress						7,086						6,688
Total property, plant, and equipment						36,242						35,743
Other Property and Investments:
Nuclear decommissioning trusts, at fair value						1,146						1,217
Equity investments in unconsolidated subsidiaries						51						50
Miscellaneous property and investments						74						69
Total other property and investments						1,271						1,336
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization						1,120						1,157
Deferred charges related to income taxes						557						550
Prepaid pension costs						608						563
Deferred under recovered fuel clause revenues						494						410
Regulatory assets – asset retirement obligations, deferred						3,781						3,688
Other regulatory assets, deferred						2,067						1,964
Other deferred charges and assets						506						491
Total deferred charges and other assets						9,133						8,823
Total Assets						$	49,206					$	48,461

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

GEORGIA POWER COMPANY

CONDENSED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholder's Equity						At March 31, 2022						At December 31, 2021
						(in millions)
Current Liabilities:
Securities due within one year						$	275					$	675
Notes payable						860						—
Accounts payable —
Affiliated						548						757
Other						873						702
Customer deposits						257						259
Accrued taxes						196						335
Accrued interest						93						136
Accrued compensation						124						232
Operating lease obligations						156						156
Asset retirement obligations						314						317
Other regulatory liabilities						336						280
Other current liabilities						292						254
Total current liabilities						4,324						4,103
Long-term Debt						13,088						13,109
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes						3,155						3,019
Deferred credits related to income taxes						2,303						2,321
Accumulated deferred ITCs						326						328
Employee benefit obligations						390						402
Operating lease obligations, deferred						989						999
Asset retirement obligations, deferred						6,526						6,507
Other deferred credits and liabilities						456						439
Total deferred credits and other liabilities						14,145						14,015
Total Liabilities						31,557						31,227
Common Stockholder's Equity (See accompanying statements)						17,649						17,234
Total Liabilities and Stockholder's Equity						$	49,206					$	48,461

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

GEORGIA POWER COMPANY

CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)

			Number of Common Shares Issued						Common Stock						Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Total
			(in millions)
Balance at December 31, 2020			9						$	398					$	12,361					$	3,789					$	(47)					$	16,501
Net income			—						—						—						351						—						351
Capital contributions from parent company			—						—						332						—						—						332
Other comprehensive income			—						—						—						—						2						2
Cash dividends on common stock			—						—						—						(412)						—						(412)
Balance at March 31, 2021			9						$	398					$	12,693					$	3,728					$	(45)					$	16,774
Balance at December 31, 2021			9						$	398					$	14,153					$	2,724					$	(41)					$	17,234
Net income			—						—						—						385						—						385
Capital contributions from parent company			—						—						443						—						—						443
Other comprehensive income			—						—						—						—						10						10
Cash dividends on common stock			—						—						—						(423)						—						(423)
Balance at March 31, 2022			9						$	398					$	14,596					$	2,686					$	(31)					$	17,649

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

MISSISSIPPI POWER COMPANY

CONDENSED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Operating Revenues:
Retail revenues															$	217					$	204
Wholesale revenues, non-affiliates															68						63
Wholesale revenues, affiliates															42						33
Other revenues															8						7
Total operating revenues															335						307
Operating Expenses:
Fuel and purchased power															132						106
Other operations and maintenance															76						68
Depreciation and amortization															45						47
Taxes other than income taxes															29						31
Total operating expenses															282						252
Operating Income															53						55
Other Income and (Expense):
Interest expense, net of amounts capitalized															(13)						(14)
Other income (expense), net															10						8
Total other income and (expense)															(3)						(6)
Earnings Before Income Taxes															50						49
Income taxes															8						4
Net Income and Comprehensive Income															$	42					$	45

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

MISSISSIPPI POWER COMPANY

CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

			For the Three Months Ended March 31,
			2022						2021
			(in millions)
Operating Activities:
Net income			$	42					$	45
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total			55						53
Deferred income taxes			(5)						4
Other, net			17						(14)
Changes in certain current assets and liabilities —
-Receivables			(7)						7
-Retail fuel cost under recovery			(11)						—
-Other current assets			(11)						1
-Accounts payable			(9)						(30)
-Accrued taxes			(63)						(75)
-Accrued compensation			(18)						(16)
-Other current liabilities			(6)						(13)
Net cash used for operating activities			(16)						(38)
Investing Activities:
Property additions			(45)						(45)
Construction payables			(8)						(8)
Payments pursuant to LTSAs			(8)						(7)
Other investing activities			(7)						(7)
Net cash used for investing activities			(68)						(67)
Financing Activities:
Increase in notes payable, net			25						29
Capital contributions from parent company			50						100
Payment of common stock dividends			(43)						(39)
Net cash provided from financing activities			32						90
Net Change in Cash, Cash Equivalents, and Restricted Cash			(52)						(15)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			61						39
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	9					$	24
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest			$	22					$	16
Noncash transactions — Accrued property additions at end of period			17						26

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

MISSISSIPPI POWER COMPANY

CONDENSED BALANCE SHEETS (UNAUDITED)

Assets						At March 31, 2022						At December 31, 2021
						(in millions)
Current Assets:
Cash and cash equivalents						$	9					$	61
Receivables —
Customer accounts, net						65						37
Unbilled revenues						36						34
Affiliated						17						29
Other accounts and notes						30						28
Fossil fuel stock						30						28
Materials and supplies						72						70
Assets from risk management activities						94						28
Other regulatory assets						61						54
Other current assets						10						13
Total current assets						424						382
Property, Plant, and Equipment:
In service						5,149						5,106
Less: Accumulated provision for depreciation						1,626						1,591
Plant in service, net of depreciation						3,523						3,515
Construction work in progress						111						127
Total property, plant, and equipment						3,634						3,642
Other Property and Investments						177						179
Deferred Charges and Other Assets:
Deferred charges related to income taxes						30						31
Prepaid pension costs						85						79
Regulatory assets – asset retirement obligations						235						232
Other regulatory assets, deferred						298						317
Accumulated deferred income taxes						115						118
Other deferred charges and assets						127						100
Total deferred charges and other assets						890						877
Total Assets						$	5,125					$	5,080

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

MISSISSIPPI POWER COMPANY

CONDENSED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholder's Equity						At March 31, 2022						At December 31, 2021
						(in millions)
Current Liabilities:
Securities due within one year						$	1					$	1
Notes payable						25						—
Accounts payable —
Affiliated						58						81
Other						53						47
Accrued taxes						56						120
Accrued compensation						20						36
Asset retirement obligations						28						30
Other regulatory liabilities						120						59
Other current liabilities						55						65
Total current liabilities						416						439
Long-term Debt						1,510						1,510
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes						462						464
Deferred credits related to income taxes						269						269
Employee benefit obligations						88						88
Asset retirement obligations, deferred						161						160
Other cost of removal obligations						194						195
Other regulatory liabilities, deferred						84						64
Other deferred credits and liabilities						24						24
Total deferred credits and other liabilities						1,282						1,264
Total Liabilities						3,208						3,213
Common Stockholder's Equity (See accompanying statements)						1,917						1,867
Total Liabilities and Stockholder's Equity						$	5,125					$	5,080

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

MISSISSIPPI POWER COMPANY

CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)

			Number of Common Shares Issued						Common Stock						Paid-In Capital						Retained Earnings (Accumulated Deficit)						Accumulated Other Comprehensive Income (Loss)						Total
			(in millions)
Balance at December 31, 2020			1						$	38					$	4,460					$	(2,754)					$	(2)					$	1,742
Net income			—						—						—						45						—						45
Capital contributions from parent company			—						—						100						—						—						100
Cash dividends on common stock			—						—						—						(39)						—						(39)
Balance at March 31, 2021			1						$	38					$	4,560					$	(2,748)					$	(2)					$	1,848
Balance at December 31, 2021			1						$	38					$	4,582					$	(2,753)					$	—					$	1,867
Net income			—						—						—						42						—						42
Capital contributions from parent company			—						—						51						—						—						51
Cash dividends on common stock			—						—						—						(43)						—						(43)
Balance at March 31, 2022			1						$	38					$	4,633					$	(2,754)					$	—					$	1,917

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

Table of Contents Index to Financial Statements

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Operating Revenues:
Wholesale revenues, non-affiliates															$	426					$	355
Wholesale revenues, affiliates															105						81
Other revenues															8						4
Total operating revenues															539						440
Operating Expenses:
Fuel															232						141
Purchased power															21						20
Other operations and maintenance															105						101
Depreciation and amortization															120						119
Taxes other than income taxes															13						12
Gain on dispositions, net															(2)						(39)
Total operating expenses															489						354
Operating Income															50						86
Other Income and (Expense):
Interest expense, net of amounts capitalized															(37)						(38)
Other income (expense), net															2						7
Total other income and (expense)															(35)						(31)
Earnings Before Income Taxes															15						55
Income taxes (benefit)															(12)						(10)
Net Income															27						65
Net loss attributable to noncontrolling interests															(45)						(32)
Net Income Attributable to Southern Power															$	72					$	97

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Net Income															$	27					$	65
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $(6) and $(11), respectively															(17)						(33)
Reclassification adjustment for amounts included in net income, net of tax of $7 and $15, respectively															22						48
Pension and other postretirement benefit plans:
Reclassification adjustment for amounts included in net income, net of tax of $— and $—, respectively															—						1
Total other comprehensive income															5						16
Comprehensive Income															32						81
Comprehensive loss attributable to noncontrolling interests															(45)						(32)
Comprehensive Income Attributable to Southern Power															$	77					$	113

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

			For the Three Months Ended March 31,
			2022						2021
			(in millions)
Operating Activities:
Net income			$	27					$	65
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total			126						125
Deferred income taxes			12						(8)
Amortization of investment tax credits			(15)						(15)
Gain on dispositions, net			(2)						(39)
Other, net			(3)						(4)
Changes in certain current assets and liabilities —
-Receivables			11						23
-Prepaid income taxes			(8)						16
-Other current assets			—						3
-Accounts payable			(21)						19
-Accrued taxes			7						5
-Other current liabilities			(17)						(3)
Net cash provided from operating activities			117						187
Investing Activities:
Business acquisitions, net of cash acquired			—						(345)
Property additions			(19)						(147)
Proceeds from dispositions			29						17
Change in construction payables			(31)						(7)
Payments pursuant to LTSAs			(15)						(27)
Other investing activities			(1)						5
Net cash used for investing activities			(37)						(504)
Financing Activities:
Increase (decrease) in notes payable, net			(3)						140
Proceeds — Senior notes			—						400
Return of capital to parent company			—						(271)
Capital contributions from noncontrolling interests			73						313
Distributions to noncontrolling interests			(97)						(46)
Payment of common stock dividends			(49)						(51)
Other financing activities			—						(7)
Net cash provided from (used for) financing activities			(76)						478
Net Change in Cash, Cash Equivalents, and Restricted Cash			4						161
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			135						182
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	139					$	343
Supplemental Cash Flow Information:
Cash paid (received) during the period for —
Interest (net of $— and $1 capitalized for 2022 and 2021, respectively)			$	29					$	26
Income taxes, net			(8)						(2)
Noncash transactions —
Contributions from noncontrolling interests			—						89
Contributions of wind turbine equipment			—						82
Accrued property additions at end of period			46						60
Right-of-use assets obtained under operating leases			—						65
Reassessment of right-of-use assets under operating leases			40						—

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Assets						At March 31, 2022						At December 31, 2021
						(in millions)
Current Assets:
Cash and cash equivalents						$	130					$	107
Receivables —
Customer accounts, net						160						139
Affiliated						26						51
Other						21						29
Materials and supplies						108						106
Prepaid income taxes						468						27
Other current assets						49						46
Total current assets						962						505
Property, Plant, and Equipment:
In service						14,594						14,585
Less: Accumulated provision for depreciation						3,341						3,241
Plant in service, net of depreciation						11,253						11,344
Construction work in progress						49						45
Total property, plant, and equipment						11,302						11,389
Other Property and Investments:
Intangible assets, net of amortization of $114 and $109, respectively						278						282
Equity investments in unconsolidated subsidiaries						56						86
Net investment in sales-type leases						159						161
Total other property and investments						493						529
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization						517						479
Prepaid LTSAs						219						210
Income taxes receivable, non-current						23						20
Other deferred charges and assets						250						258
Total deferred charges and other assets						1,009						967
Total Assets						$	13,766					$	13,390

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholders' Equity						At March 31, 2022						At December 31, 2021
						(in millions)
Current Liabilities:
Securities due within one year						$	666					$	679
Notes payable						208						211
Accounts payable —
Affiliated						82						92
Other						67						85
Accrued taxes						21						14
Accrued interest						32						32
Other current liabilities						121						140
Total current liabilities						1,197						1,253
Long-term Debt						2,999						3,009
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes						661						215
Accumulated deferred ITCs						1,600						1,614
Operating lease obligations						535						497
Other deferred credits and liabilities						218						204
Total deferred credits and other liabilities						3,014						2,530
Total Liabilities						7,210						6,792
Total Stockholders' Equity (See accompanying statements)						6,556						6,598
Total Liabilities and Stockholders' Equity						$	13,766					$	13,390

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

Table of Contents Index to Financial Statements

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)

															Paid-In Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Total Common Stockholders' Equity						Noncontrolling Interests						Total
															(in millions)
Balance at December 31, 2020															$	914					$	1,522					$	(67)					$	2,369					$	4,262					$	6,631
Net income (loss)															—						97						—						97						(32)						65
Return of capital to parent company															(271)						—						—						(271)						—						(271)
Other comprehensive income															—						—						16						16						—						16
Cash dividends on common stock															—						(51)						—						(51)						—						(51)
Capital contributions from noncontrolling interests															—						—						—						—						403						403
Distributions to noncontrolling interests															—						—						—						—						(46)						(46)
Other															(2)						1						(1)						(2)						(1)						(3)
Balance at March 31, 2021															$	641					$	1,569					$	(52)					$	2,158					$	4,586					$	6,744

Balance at December 31, 2021															$	638					$	1,585					$	(27)					$	2,196					$	4,402					$	6,598
Net income (loss)															—						72						—						72						(45)						27
Other comprehensive income															—						—						5						5						—						5
Cash dividends on common stock															—						(49)						—						(49)						—						(49)
Capital contributions from noncontrolling interests															—						—						—						—						73						73
Distributions to noncontrolling interests															—						—						—						—						(98)						(98)
Balance at March 31, 2022															$	638					$	1,608					$	(22)					$	2,224					$	4,332					$	6,556

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Operating Revenues:
Natural gas revenues (includes revenue taxes of $71 and $54, respectively)															$	2,058					$	1,692
Alternative revenue programs															—						2
Total operating revenues															2,058						1,694
Operating Expenses:
Cost of natural gas															1,095						583
Other operations and maintenance															305						299
Depreciation and amortization															137						130
Taxes other than income taxes															100						81
Total operating expenses															1,637						1,093
Operating Income															421						601
Other Income and (Expense):
Earnings from equity method investments															40						41
Interest expense, net of amounts capitalized															(61)						(60)
Other income (expense), net															16						(63)
Total other income and (expense)															(5)						(82)
Earnings Before Income Taxes															416						519
Income taxes															97						121
Net Income															$	319					$	398

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

									For the Three Months Ended March 31,
															2022						2021
									(in millions)
Net Income															$	319					$	398
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $10 and $—, respectively															26						1
Reclassification adjustment for amounts included in net income, net of tax of $(2) and $1, respectively															(6)						3
Total other comprehensive income															20						4
Comprehensive Income															$	339					$	402

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

			For the Three Months Ended March 31,
			2022						2021
			(in millions)
Operating Activities:
Net income			$	319					$	398
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total			137						130
Deferred income taxes			5						160
Mark-to-market adjustments			(38)						64
Natural gas cost under recovery – long-term			162						(185)
Other, net			41						5
Changes in certain current assets and liabilities —
-Receivables			(115)						74
-Natural gas for sale, net of temporary LIFO liquidation			450						456
-Prepaid income taxes			34						(51)
-Natural gas cost under recovery			(40)						(487)
-Other current assets			39						17
-Accounts payable			(23)						(7)
-Accrued taxes			54						10
-Other current liabilities			(1)						(34)
Net cash provided from operating activities			1,024						550
Investing Activities:
Property additions			(247)						(251)
Cost of removal, net of salvage			(20)						(16)
Change in construction payables, net			(5)						(47)
Other investing activities			1						6
Net cash used for investing activities			(271)						(308)
Financing Activities:
Decrease in notes payable, net			(577)						(127)
Proceeds — Short-term borrowings			—						300
Redemptions —
Short-term borrowings			(100)						—
Medium-term notes			—						(30)
Capital contributions from parent company			39						39
Payment of common stock dividends			(130)						(132)
Net cash provided from (used for) financing activities			(768)						50
Net Change in Cash, Cash Equivalents, and Restricted Cash			(15)						292
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period			48						19
Cash, Cash Equivalents, and Restricted Cash at End of Period			$	33					$	311
Supplemental Cash Flow Information:
Cash paid (received) during the period for —
Interest (net of $2 capitalized for both 2022 and 2021)			$	55					$	52
Income taxes, net			—						(1)
Noncash transactions — Accrued property additions at end of period			107						95

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Assets						At March 31, 2022						At December 31, 2021
						(in millions)
Current Assets:
Cash and cash equivalents						$	31					$	45
Receivables —
Customer accounts						603						462
Unbilled revenues						245						278
Other accounts and notes						52						49
Accumulated provision for uncollectible accounts						(51)						(39)
Natural gas for sale						121						362
Prepaid expenses						88						114
Assets from risk management activities, net of collateral						53						33
Natural gas cost under recovery						306						266
Other regulatory assets						104						136
Other current assets						47						49
Total current assets						1,599						1,755
Property, Plant, and Equipment:
In service						19,035						18,880
Less: Accumulated depreciation						5,159						5,067
Plant in service, net of depreciation						13,876						13,813
Construction work in progress						768						684
Total property, plant, and equipment						14,644						14,497
Other Property and Investments:
Goodwill						5,015						5,015
Equity investments in unconsolidated subsidiaries						1,178						1,173
Other intangible assets, net of amortization of $148 and $145, respectively						34						37
Miscellaneous property and investments						19						19
Total other property and investments						6,246						6,244
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization						67						70
Prepaid pension costs						183						175
Other regulatory assets, deferred						508						689
Other deferred charges and assets						130						130
Total deferred charges and other assets						888						1,064
Total Assets						$	23,377					$	23,560

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholder's Equity						At March 31, 2022						At December 31, 2021
						(in millions)
Current Liabilities:
Securities due within one year						$	46					$	47
Notes payable						532						1,209
Accounts payable —
Affiliated						40						58
Other						349						361
Customer deposits						72						95
Accrued taxes						191						124
Accrued interest						68						59
Accrued compensation						66						110
Temporary LIFO liquidation						209						—
Other regulatory liabilities						72						8
Other current liabilities						140						155
Total current liabilities						1,785						2,226
Long-term Debt						6,814						6,855
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes						1,568						1,555
Deferred credits related to income taxes						808						816
Employee benefit obligations						168						176
Operating lease obligations						58						59
Other cost of removal obligations						1,692						1,683
Accrued environmental remediation						189						197
Other deferred credits and liabilities						120						77
Total deferred credits and other liabilities						4,603						4,563
Total Liabilities						13,202						13,644
Common Stockholder's Equity (See accompanying statements)						10,175						9,916
Total Liabilities and Stockholder's Equity						$	23,377					$	23,560

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED)

															Paid-In Capital						Retained Earnings (Accumulated Deficit)						Accumulated Other Comprehensive Income (Loss)						Total
															(in millions)
Balance at December 31, 2020															$	9,930					$	(141)					$	(22)					$	9,767
Net income															—						398						—						398
Capital contributions from parent company															57						—						—						57
Other comprehensive income															—						—						4						4
Cash dividends on common stock															—						(132)						—						(132)
Balance at March 31, 2021															9,987						125						(18)						10,094
Balance at December 31, 2021															$	10,024					$	(132)					$	24					$	9,916
Net income															—						319						—						319
Capital contributions from parent company															50						—						—						50
Other comprehensive income															—						—						20						20
Cash dividends on common stock															—						(130)						—						(130)
Balance at March 31, 2022															$	10,074					$	57					$	44					$	10,175

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS

FOR

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES

ALABAMA POWER COMPANY

GEORGIA POWER COMPANY

MISSISSIPPI POWER COMPANY

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES

SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

(UNAUDITED)

INDEX TO THE NOTES TO THE CONDENSED FINANCIAL STATEMENTS

Note						Page
A			Introduction			42
B			Regulatory Matters			45
C			Contingencies			52
D			Revenue from Contracts with Customers and Lease Income			55
E			Consolidated Entities and Equity Method Investments			58
F			Financing			60
G			Income Taxes			61
H			Retirement Benefits			62
I			Fair Value Measurements			64
J			Derivatives			69
K			Acquisitions and Dispositions			83
L			Segment and Related Information			83

INDEX TO APPLICABLE NOTES TO FINANCIAL STATEMENTS BY REGISTRANT

The following unaudited notes to the condensed financial statements are a combined presentation; however, information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf and each Registrant makes no representation as to information related to the other Registrants. The list below indicates the Registrants to which each footnote applies.

Registrant			Applicable Notes
Southern Company			A, B, C, D, E, F, G, H, I, J, K, L
Alabama Power			A, B, C, D, F, G, H, I, J
Georgia Power			A, B, C, D, F, G, H, I, J
Mississippi Power			A, B, C, D, F, G, H, I, J
Southern Power			A, C, D, E, F, G, H, I, J, K
Southern Company Gas			A, B, C, D, E, F, G, H, I, J, L

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS

(UNAUDITED)

(A) INTRODUCTION

The condensed quarterly financial statements of each Registrant included herein have been prepared by such Registrant, without audit, pursuant to the rules and regulations of the SEC. The Condensed Balance Sheets at December 31, 2021 have been derived from the audited financial statements of each Registrant. In the opinion of each Registrant's management, the information regarding such Registrant furnished herein reflects all adjustments, which, except as otherwise disclosed, are of a normal recurring nature, necessary to present fairly the results of operations for the periods ended March 31, 2022 and 2021. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although each Registrant believes that the disclosures regarding such Registrant are adequate to make the information presented not misleading. Disclosures which would substantially duplicate the disclosures in the Form 10-K and details which have not changed significantly in amount or composition since the filing of the Form 10-K are generally omitted from this Quarterly Report on Form 10-Q unless specifically required by GAAP. Therefore, these Condensed Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K. Due to the seasonal variations in the demand for energy and other factors, operating results for the periods presented are not necessarily indicative of the operating results to be expected for the full year.

Certain prior year data presented in the financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the overall results of operations, financial position, or cash flows of any Registrant.

Goodwill and Other Intangible Assets

Goodwill at March 31, 2022 and December 31, 2021 was as follows:

			Goodwill
			(in millions)
Southern Company			$	5,280
Southern Company Gas:
Gas distribution operations			$	4,034
Gas marketing services			981
Southern Company Gas total			$	5,015

Goodwill is not amortized, but is subject to an annual impairment test during the fourth quarter of each year, or more frequently if impairment indicators arise.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Other intangible assets were as follows:

			At March 31, 2022												At December 31, 2021
			Gross Carrying Amount			Accumulated Amortization			Other Intangible Assets, Net						Gross Carrying Amount			Accumulated Amortization			Other Intangible Assets, Net
			(in millions)												(in millions)
Southern Company
Other intangible assets subject to amortization:
Customer relationships			$	212		$	(152)		$	60					$	212		$	(150)		$	62
Trade names			64			(41)			23						64			(38)			26
PPA fair value adjustments			390			(114)			276						390			(109)			281
Other			11			(10)			1						11			(10)			1
Total other intangible assets subject to amortization			$	677		$	(317)		$	360					$	677		$	(307)		$	370
Other intangible assets not subject to amortization:
Federal Communications Commission licenses			75			—			75						75			—			75
Total other intangible assets			$	752		$	(317)		$	435					$	752		$	(307)		$	445
Southern Power
Other intangible assets subject to amortization:
PPA fair value adjustments			$	390		$	(114)		$	276					$	390		$	(109)		$	281
Southern Company Gas
Other intangible assets subject to amortization:
Gas marketing services
Customer relationships			$	156		$	(132)		$	24					$	156		$	(130)		$	26
Trade names			26			(16)			10						26			(15)			11
Total other intangible assets subject to amortization			$	182		$	(148)		$	34					$	182		$	(145)		$	37

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Amortization associated with other intangible assets was as follows:

						Three Months Ended
						March 31, 2022
						(in millions)
Southern Company(a)						$	10
Southern Power(b)						5
Southern Company Gas						3

(a)Includes $5 million recorded as a reduction to operating revenues.

(b)Recorded as a reduction to operating revenues.

Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed balance sheets that total to the amount shown in the condensed statements of cash flows for the applicable Registrants:

			Southern Company									Southern Power									Southern Company Gas
			March 31, 2022			December 31, 2021						March 31, 2022			December 31, 2021						March 31, 2022			December 31, 2021
			(in millions)
Cash and cash equivalents			$	1,662		$	1,798					$	130		$	107					$	31		$	45
Restricted cash(a):
Other current assets			2			2						—			—						2			2
Other deferred charges and assets			9			29						9			29						—			—
Total cash, cash equivalents, and restricted cash(b)			$	1,673		$	1,829					$	139		$	135					$	33		$	48

(a)For Southern Power, restricted cash reflects $9 million and $10 million at March 31, 2022 and December 31, 2021, respectively, held to fund estimated construction completion costs at the Deuel Harvest wind facility and $19 million at December 31, 2021 related to tax equity contributions restricted until the Garland battery energy storage facility achieved final contracted capacity. For Southern Company Gas, reflects restricted cash held as collateral for workers' compensation, life insurance, and long-term disability insurance.

(b)Total may not add due to rounding.

Natural Gas for Sale

With the exception of Nicor Gas, Southern Company Gas records natural gas inventories on a WACOG basis. For any declines in market prices below the WACOG considered to be other than temporary, an adjustment is recorded to reduce the value of natural gas inventories to market value. Nicor Gas' natural gas inventory is carried at cost on a LIFO basis. Inventory decrements occurring during the year that are restored prior to year end are charged to cost of natural gas at the estimated annual replacement cost. Inventory decrements that are not restored prior to year end are charged to cost of natural gas at the actual LIFO cost of the inventory layers liquidated.

Southern Company Gas recorded no material adjustments to natural gas inventories for either period presented. Nicor Gas' inventory decrement at March 31, 2022 is expected to be restored prior to year end.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Depreciation and Amortization

See Note 5 to the financial statements under "Depreciation and Amortization – Southern Power" in Item 8 of the Form 10-K for additional information.

Effective January 1, 2022, Southern Power revised the depreciable lives of its wind generating facilities from up to 30 years to up to 35 years. This revision resulted in an immaterial decrease in depreciation for the three months ended March 31, 2022 and is expected to result in an immaterial decrease in annual depreciation for 2022.

(B) REGULATORY MATTERS

See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information relating to regulatory matters.

The recovery balances for certain retail regulatory clauses of the traditional electric operating companies and Southern Company Gas at March 31, 2022 and December 31, 2021 were as follows:

Regulatory Clause			Balance Sheet Line Item			March 31, 2022			December 31, 2021
						(in millions)
Alabama Power
Rate CNP Compliance			Other regulatory assets, deferred			$	12		$	16
Rate CNP PPA			Other regulatory assets, deferred			84			84
Retail Energy Cost Recovery(*)			Other regulatory assets, deferred			46			126
Georgia Power
Fuel Cost Recovery			Deferred under recovered fuel clause revenues			$	494		$	410
Mississippi Power
Fuel Cost Recovery			Other customer accounts receivable			$	16		$	4
Ad Valorem Tax			Other regulatory assets, current			12			12
			Other regulatory assets, deferred			33			37
Southern Company Gas
Natural Gas Cost Recovery			Natural gas cost under recovery			$	306		$	266
			Other regulatory assets, deferred			44			207
			Other regulatory liabilities, current			13			—

(*)In accordance with an Alabama PSC order issued on February 1, 2022, Alabama Power applied $126 million of its 2021 Rate RSE refund to reduce the Rate ECR under recovered balance.

Alabama Power

Certificate of Convenience and Necessity

On March 25, 2022, the FERC approved Alabama Power's acquisition of the Calhoun Generating Station, which is expected to be completed by September 30, 2022. The completion of the acquisition remains subject to approval by the Alabama PSC. The ultimate outcome of this matter cannot be determined at this time.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Georgia Power

Rate Plan

In 2020, the Georgia PSC denied a motion for reconsideration filed by the Sierra Club regarding the Georgia PSC's decision in the 2019 ARP allowing Georgia Power to recover compliance costs for CCR AROs. The Superior Court of Fulton County subsequently affirmed the Georgia PSC's decision and, in October 2021, the Georgia Court of Appeals affirmed the Superior Court of Fulton County's order. In December 2021, the Sierra Club filed a petition for writ of certiorari to the Georgia Supreme Court. The ultimate outcome of this matter cannot be determined at this time. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information regarding Georgia Power's AROs.

Integrated Resource Plan

In light of the ongoing supply chain challenges in the solar industry, Georgia Power amended the 970 MWs of utility-scale PPAs authorized in its 2019 Integrated Resource Plan to extend by one year the in-service dates for solar generation resources to the end of 2024.

Nuclear Construction

In 2009, the Georgia PSC certified construction of Plant Vogtle Units 3 and 4, in which Georgia Power holds a 45.7% ownership interest. In 2012, the NRC issued the related combined construction and operating licenses, which allowed full construction of the two AP1000 nuclear units (with electric generating capacity of approximately 1,100 MWs each) and related facilities to begin. Until March 2017, construction on Plant Vogtle Units 3 and 4 continued under the Vogtle 3 and 4 Agreement, which was a substantially fixed price agreement.

In connection with the EPC Contractor's bankruptcy filing in March 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, entered into several transitional arrangements to allow construction to continue. In July 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, entered into the Vogtle Services Agreement, whereby Westinghouse provides facility design and engineering services, procurement and technical support, and staff augmentation on a time and materials cost basis. The Vogtle Services Agreement provides that it will continue until the start-up and testing of Plant Vogtle Units 3 and 4 are complete and electricity is generated and sold from both units. The Vogtle Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.

In October 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, executed the Bechtel Agreement, a cost reimbursable plus fee arrangement, whereby Bechtel is reimbursed for actual costs plus a base fee and an at-risk fee, which is subject to adjustment based on Bechtel's performance against cost and schedule targets. Each Vogtle Owner is severally (not jointly) liable for its proportionate share, based on its ownership interest, of all amounts owed to Bechtel under the Bechtel Agreement. The Vogtle Owners may terminate the Bechtel Agreement at any time for their convenience, provided that the Vogtle Owners will be required to pay amounts related to work performed prior to the termination (including the applicable portion of the base fee), certain termination-related costs, and, at certain stages of the work, the applicable portion of the at-risk fee. Bechtel may terminate the Bechtel Agreement under certain circumstances, including certain Vogtle Owner suspensions of work, certain breaches of the Bechtel Agreement by the Vogtle Owners, Vogtle Owner insolvency, and certain other events.

See Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K for information on the Amended and Restated Loan Guarantee Agreement, including applicable covenants, events of default, and mandatory prepayment events.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Cost and Schedule

Georgia Power's approximate proportionate share of the remaining estimated capital cost to complete Plant Vogtle Units 3 and 4, including contingency, through the end of the first quarter 2023 and the fourth quarter 2023, respectively, is as follows:

			(in millions)
Base project capital cost forecast(a)(b)			$	10,294
Construction contingency estimate			107
Total project capital cost forecast(a)(b)			10,401
Net investment at March 31, 2022(b)			(8,715)
Remaining estimate to complete			$	1,686

(a)Includes approximately $590 million of costs that are not shared with the other Vogtle Owners and approximately $440 million of incremental costs under the cost-sharing and tender provisions of the joint ownership agreements described below. Excludes financing costs expected to be capitalized through AFUDC of approximately $377 million, of which $221 million had been accrued through March 31, 2022.

(b)Net of $1.7 billion received from Toshiba under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds.

Georgia Power estimates that its financing costs for construction of Plant Vogtle Units 3 and 4 will total approximately $3.4 billion, of which $3.0 billion had been incurred through March 31, 2022.

As part of its ongoing processes, Southern Nuclear continues to evaluate cost and schedule forecasts on a regular basis to incorporate current information available, particularly in the areas of engineering support, commodity installation, system turnovers and related test results, and workforce statistics. Southern Nuclear establishes aggressive target values for monthly construction production and system turnover activities, which are reflected in the site work plans.

Since March 2020, the number of active COVID-19 cases at the site has fluctuated consistent with the surrounding area and impacted productivity levels and pace of activity completion, with the site experiencing peaks in the number of active cases in January 2021, August 2021, and January 2022. Georgia Power estimates the productivity impacts of the COVID-19 pandemic have consumed approximately three to four months of schedule margin previously embedded in the site work plan for Unit 3 and Unit 4. As of March 31, 2022, Georgia Power's proportionate share of the estimated incremental cost associated with COVID-19 mitigation actions and impacts on construction productivity is estimated to be between $160 million and $200 million and is included in the total project capital cost forecast. The continuing effects of the COVID-19 pandemic could further disrupt or delay construction and testing activities at Plant Vogtle Units 3 and 4.

Fuel load for Unit 3 is projected during the third quarter or the fourth quarter 2022 with an in-service date projected during the fourth quarter 2022 or the first quarter 2023. Unit 3's projected schedule primarily depends on improvements in overall construction productivity and production levels, the volume and completion of construction remediation work, completion of work packages, including inspection records, and other documentation necessary to submit the remaining ITAACs and begin fuel load, the pace of system and area turnovers, and the progression of startup and other testing. An in-service date during the third quarter or the fourth quarter 2023 for Unit 4 is projected. Unit 4's projected schedule primarily depends on overall construction productivity and production levels improving as well as appropriate levels of craft laborers, particularly electricians and pipefitters, being added and maintained. Any further delays could result in later in-service dates.

During the first quarter 2022, established construction contingency totaling $43 million was assigned to the base capital cost forecast for costs primarily associated with construction productivity, the pace of system turnovers, and support resources for Units 3 and 4.

As Unit 3 completes system turnover from construction and moves to testing and transition to operations, ongoing and potential future challenges include construction productivity, completion of construction remediation work,

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

completion of work packages, including inspection records, and other documentation necessary to submit the remaining ITAACs and begin fuel load, and final component and pre-operational tests. As Unit 4 progresses through construction and continues to transition into testing, ongoing and potential future challenges include the pace and quality of electrical installation; availability of craft and supervisory resources, including the temporary diversion of such resources to support Unit 3 construction efforts; the pace of work package closures and system turnovers; and the timeframe and duration of hot functional and other testing. As construction, including subcontract work, continues on both Units 3 and 4, ongoing or future challenges include management of contractors and vendors; subcontractor performance; supervision of craft labor and related productivity, particularly in the installation of electrical, mechanical, and instrumentation and controls commodities, ability to attract and retain craft labor, and/or related cost escalation; and procurement and related installation. New challenges may arise, particularly as Units 3 and 4 move into initial testing and start-up, which may result in required engineering changes or remediation related to plant systems, structures, or components (some of which are based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale). The ongoing and potential future challenges described above may change the projected schedule and estimated cost.

There have been technical and procedural challenges to the construction and licensing of Plant Vogtle Units 3 and 4 at the federal and state level and additional challenges may arise. In addition, certain license amendment requests have been filed and approved or are pending before the NRC. Processes are in place that are designed to ensure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the NRC that occur throughout construction. In connection with the additional construction remediation work described above, Southern Nuclear reviewed the project's construction quality programs and, where needed, is implementing improvement plans consistent with these processes. On March 25, 2022, the NRC completed its follow-up inspection related to the November 2021 final significance report on its special inspection to review the root cause of this additional construction remediation work and the corresponding corrective action plans. The NRC closed the two white findings identified in November 2021 and returned Vogtle Unit 3 to the NRC's baseline inspection program.

Various design and other licensing-based compliance matters, including the timely submittal by Southern Nuclear of the ITAAC documentation for each unit and the related reviews and approvals by the NRC necessary to support NRC authorization to load fuel, have arisen or may arise, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues, including inspections and ITAACs, are not resolved in a timely manner, there may be delays in the project schedule that could result in increased costs.

The ultimate outcome of these matters cannot be determined at this time. However, any extension of the in-service date beyond the first quarter 2023 for Unit 3 or the fourth quarter 2023 for Unit 4, including the current level of cost sharing described below, is estimated to result in additional base capital costs for Georgia Power of up to $60 million per month for Unit 3 and $40 million per month for Unit 4, as well as the related AFUDC and any additional related construction, support resources, or testing costs. While Georgia Power is not precluded from seeking retail recovery of any future capital cost forecast increase other than the amounts related to the cost-sharing and tender provisions of the joint ownership agreements described below, management will ultimately determine whether or not to seek recovery. Any further changes to the capital cost forecast that are not expected to be recoverable through regulated rates will be required to be charged to income and such charges could be material.

Joint Owner Contracts

In November 2017, the Vogtle Owners entered into an amendment to their joint ownership agreements for Plant Vogtle Units 3 and 4 to provide for, among other conditions, additional Vogtle Owner approval requirements. Effective in August 2018, the Vogtle Owners further amended the joint ownership agreements to clarify and provide procedures for certain provisions of the joint ownership agreements related to adverse events that require the vote of the holders of at least 90% of the ownership interests in Plant Vogtle Units 3 and 4 to continue construction (as amended, and together with the November 2017 amendment, the Vogtle Joint Ownership Agreements). The Vogtle Joint Ownership Agreements also confirm that the Vogtle Owners' sole recourse against Georgia Power or Southern

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Nuclear for any action or inaction in connection with their performance as agent for the Vogtle Owners is limited to removal of Georgia Power and/or Southern Nuclear as agent, except in cases of willful misconduct.

Amendments to the Vogtle Joint Ownership Agreements

In connection with a September 2018 vote by the Vogtle Owners to continue construction, Georgia Power entered into (i) a binding term sheet (Vogtle Owner Term Sheet) with the other Vogtle Owners and MEAG Power's wholly-owned subsidiaries MEAG Power SPVJ, LLC (MEAG SPVJ), MEAG Power SPVM, LLC (MEAG SPVM), and MEAG Power SPVP, LLC (MEAG SPVP) to take certain actions which partially mitigate potential financial exposure for the other Vogtle Owners, including additional amendments to the Vogtle Joint Ownership Agreements and the purchase of PTCs from the other Vogtle Owners at pre-established prices, and (ii) a term sheet (MEAG Term Sheet) with MEAG Power and MEAG SPVJ to provide up to $300 million of funding with respect to MEAG SPVJ's ownership interest in Plant Vogtle Units 3 and 4 under certain circumstances. In January 2019, Georgia Power, MEAG Power, and MEAG SPVJ entered into an agreement to implement the provisions of the MEAG Term Sheet. In February 2019, Georgia Power, the other Vogtle Owners, and MEAG Power's wholly-owned subsidiaries MEAG SPVJ, MEAG SPVM, and MEAG SPVP entered into certain amendments to the Vogtle Joint Ownership Agreements to implement the provisions of the Vogtle Owner Term Sheet (Global Amendments).

Pursuant to the Global Amendments: (i) each Vogtle Owner must pay its proportionate share of qualifying construction costs for Plant Vogtle Units 3 and 4 based on its ownership percentage up to the estimated cost at completion (EAC) for Plant Vogtle Units 3 and 4 which formed the basis of Georgia Power's forecast of $8.4 billion in the nineteenth VCM plus $800 million; (ii) Georgia Power will be responsible for 55.7% of actual qualifying construction costs between $800 million and $1.6 billion over the EAC in the nineteenth VCM (resulting in $80 million of potential additional costs to Georgia Power), with the remaining Vogtle Owners responsible for 44.3% of such costs pro rata in accordance with their respective ownership interests; and (iii) Georgia Power will be responsible for 65.7% of qualifying construction costs between $1.6 billion and $2.1 billion over the EAC in the nineteenth VCM (resulting in a further $100 million of potential additional costs to Georgia Power), with the remaining Vogtle Owners responsible for 34.3% of such costs pro rata in accordance with their respective ownership interests. If the EAC is revised and exceeds the EAC in the nineteenth VCM by more than $2.1 billion, each of the other Vogtle Owners will have a one-time option at the time the project budget cost forecast is so revised to tender a portion of its ownership interest to Georgia Power in exchange for Georgia Power's agreement to pay 100% of such Vogtle Owner's remaining share of total construction costs in excess of the EAC in the nineteenth VCM plus $2.1 billion.

For purposes of the foregoing provisions, qualifying construction costs will not include costs (i) resulting from force majeure events, including epidemics and quarantines, governmental actions or inactions (or significant delays associated with issuance of such actions) that affect the licensing, completion, start-up, operations, or financing of Plant Vogtle Units 3 and 4, administrative proceedings or litigation regarding ITAAC or other regulatory challenges to commencement of operation of Plant Vogtle Units 3 and 4, and changes in laws or regulations governing Plant Vogtle Units 3 and 4, (ii) legal fees and legal expenses incurred due to litigation with contractors or subcontractors that are not subsidiaries or affiliates of Southern Company, and (iii) additional costs caused by requests from the Vogtle Owners other than Georgia Power, except for the exercise of a right to vote granted under the Vogtle Joint Ownership Agreements, that increase costs by $100,000 or more.

In addition, pursuant to the Global Amendments, the holders of at least 90% of the ownership interests in Plant Vogtle Units 3 and 4 must vote to continue construction if certain adverse events occur, including, among other events: (i) the bankruptcy of Toshiba; (ii) the termination or rejection in bankruptcy of certain agreements, including the Vogtle Services Agreement, the Bechtel Agreement, or the agency agreement with Southern Nuclear; (iii) Georgia Power's public announcement of its intention not to submit for rate recovery any portion of its investment in Plant Vogtle Units 3 and 4 or the Georgia PSC determines that any of Georgia Power's costs relating to the construction of Plant Vogtle Units 3 and 4 will not be recovered in retail rates, excluding any additional amounts paid by Georgia Power on behalf of the other Vogtle Owners pursuant to the Global Amendments described above and the first 6% of costs during any six-month VCM reporting period that are disallowed by the Georgia PSC for

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recovery, or for which Georgia Power elects not to seek cost recovery, through retail rates; and (iv) an incremental extension of one year or more from the seventeenth VCM report estimated in-service dates of November 2021 and November 2022 for Units 3 and 4, respectively. The schedule extension announced in February 2022 triggered the requirement for a vote to continue construction. Effective February 25, 2022, all of the Vogtle Owners had voted to continue construction.

Georgia Power and the other Vogtle Owners do not agree on either the starting dollar amount for the determination of cost increases subject to the cost-sharing and tender provisions of the Global Amendments or the extent to which COVID-19-related costs impact those provisions. Based on the definition in the Global Amendments, Georgia Power believes the starting dollar amount is $18.38 billion and the current project capital cost forecast exceeds the cost-sharing provision threshold, but not the tender provision threshold. The other Vogtle Owners have notified Georgia Power that they believe the current project capital cost forecast exceeds the cost-sharing thresholds and triggers the tender provisions under the Global Amendments. Georgia Power recorded a pre-tax charge to income in the fourth quarter 2021 of approximately $440 million ($328 million after tax) associated with these cost-sharing and tender provisions, which is included in the total project capital cost forecast. Georgia Power may be required to record further pre-tax charges to income of up to approximately $460 million associated with these provisions based on the current project capital cost forecast. Georgia Power's incremental charges associated with these provisions, which relate to the other Vogtle Owners' share of costs, will not be recovered from retail customers. In October 2021, Georgia Power and the other Vogtle Owners entered into an agreement to clarify the process for the tender provisions of the Global Amendments to provide for a decision between 120 and 180 days after the tender option is triggered, which the other Vogtle Owners assert occurred on February 14, 2022.

Georgia Power's ownership interest in Plant Vogtle Units 3 and 4 continues to be 45.7%; however, it could increase if one or more of the other Vogtle Owners exercise the option to tender a portion of their ownership interest to Georgia Power and require Georgia Power to pay 100% of the remaining share of the costs necessary to complete Plant Vogtle Units 3 and 4. Georgia Power's incremental ownership interest would be calculated and conveyed to Georgia Power after Plant Vogtle Units 3 and 4 are placed in service.

The ultimate outcome of these matters cannot be determined at this time.

Regulatory Matters

In 2009, the Georgia PSC voted to certify construction of Plant Vogtle Units 3 and 4 with a certified capital cost of $4.418 billion. In addition, in 2009 the Georgia PSC approved inclusion of the Plant Vogtle Units 3 and 4 related CWIP accounts in rate base, and the State of Georgia enacted the Georgia Nuclear Energy Financing Act, which allows Georgia Power to recover financing costs for Plant Vogtle Units 3 and 4. Financing costs are recovered on all applicable certified costs through annual adjustments to the NCCR tariff up to the certified capital cost of $4.418 billion. At March 31, 2022, Georgia Power had recovered approximately $2.8 billion of financing costs. Financing costs related to capital costs above $4.418 billion are being recognized through AFUDC and are expected to be recovered through retail rates over the life of Plant Vogtle Units 3 and 4; however, Georgia Power is not recording AFUDC related to any capital costs in excess of the total deemed reasonable by the Georgia PSC (currently $7.3 billion) and not requested for rate recovery. In November 2021, the Georgia PSC approved Georgia Power's request to decrease the NCCR tariff by $78 million annually, effective January 1, 2022.

Georgia Power is required to file semi-annual VCM reports with the Georgia PSC by February 28 and August 31 of each year. In 2013, in connection with the eighth VCM report, the Georgia PSC approved a stipulation between Georgia Power and the staff of the Georgia PSC to waive the requirement to amend the Plant Vogtle Units 3 and 4 certificate in accordance with the 2009 certification order until the completion of Plant Vogtle Unit 3, or earlier if deemed appropriate by the Georgia PSC and Georgia Power.

In 2016, the Georgia PSC voted to approve a settlement agreement (Vogtle Cost Settlement Agreement) resolving certain prudency matters in connection with the fifteenth VCM report. In December 2017, the Georgia PSC voted to approve (and issued its related order on January 11, 2018) Georgia Power's seventeenth VCM report and modified the Vogtle Cost Settlement Agreement. The Vogtle Cost Settlement Agreement, as modified by the January 11,

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2018 order, resolved the following regulatory matters related to Plant Vogtle Units 3 and 4: (i) none of the $3.3 billion of costs incurred through December 31, 2015 and reflected in the fourteenth VCM report should be disallowed from rate base on the basis of imprudence; (ii) the Contractor Settlement Agreement was reasonable and prudent and none of the $0.3 billion paid pursuant to the Contractor Settlement Agreement should be disallowed from rate base on the basis of imprudence; (iii) (a) capital costs incurred up to $5.68 billion would be presumed to be reasonable and prudent with the burden of proof on any party challenging such costs, (b) Georgia Power would have the burden to show that any capital costs above $5.68 billion were prudent, and (c) a revised capital cost forecast of $7.3 billion (after reflecting the impact of payments received under the Guarantee Settlement Agreement and related customer refunds) was found reasonable; (iv) construction of Plant Vogtle Units 3 and 4 should be completed, with Southern Nuclear serving as project manager and Bechtel as primary contractor; (v) approved and deemed reasonable Georgia Power's revised schedule placing Plant Vogtle Units 3 and 4 in service in November 2021 and November 2022, respectively; (vi) confirmed that the revised cost forecast does not represent a cost cap and that a prudence proceeding on cost recovery will occur following Unit 4 fuel load, consistent with applicable Georgia law; (vii) reduced the ROE used to calculate the NCCR tariff (a) from 10.95% (the ROE rate setting point authorized by the Georgia PSC in the 2013 alternate rate plan) to 10.00% effective January 1, 2016, (b) from 10.00% to 8.30%, effective January 1, 2020, and (c) from 8.30% to 5.30%, effective January 1, 2021 (provided that the ROE in no case will be less than Georgia Power's average cost of long-term debt); (viii) reduced the ROE used for AFUDC equity for Plant Vogtle Units 3 and 4 from 10.00% to Georgia Power's average cost of long-term debt, effective January 1, 2018; and (ix) agreed that effective the first month after Unit 3 reaches commercial operation, retail base rates would be adjusted to include the costs related to Unit 3 and common facilities deemed prudent in the Vogtle Cost Settlement Agreement (see Note 2 to the financial statements under "Georgia Power – Plant Vogtle Unit 3 and Common Facilities Rate Proceeding" in Item 8 of the Form 10-K for additional information). The January 11, 2018 order also stated that if Plant Vogtle Units 3 and 4 are not commercially operational by June 1, 2021 and June 1, 2022, respectively, the ROE used to calculate the NCCR tariff will be further reduced by 10 basis points each month (but not lower than Georgia Power's average cost of long-term debt) until the respective Unit is commercially operational. The ROE reductions negatively impacted earnings by approximately $270 million in 2021 and are estimated to have negative earnings impacts of approximately $300 million and $265 million in 2022 and 2023, respectively. In its January 11, 2018 order, the Georgia PSC also stated if other conditions change and assumptions upon which Georgia Power's seventeenth VCM report are based do not materialize, the Georgia PSC reserved the right to reconsider the decision to continue construction.

In the August 2021 order approving the twenty-fourth VCM report, the Georgia PSC approved a stipulation addressing the following matters: (i) beginning with its twenty-fifth VCM report, Georgia Power will continue to report to the Georgia PSC all costs incurred during the period for review and will request for approval costs up to the $7.3 billion determined to be reasonable in the Georgia PSC's seventeenth VCM order and (ii) Georgia Power will not seek rate recovery of the $0.7 billion increase to the base capital cost forecast included in the nineteenth VCM report and charged to income by Georgia Power in the second quarter 2018. In addition, the stipulation confirms Georgia Power may request verification and approval of costs above $7.3 billion for inclusion in rate base at a later time, but no earlier than the prudence review contemplated by the seventeenth VCM order described previously.

The Georgia PSC has approved 25 VCM reports covering periods through June 30, 2021. These reports reflect total construction capital costs incurred of $7.9 billion (net of $1.7 billion of payments received under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds), of which the Georgia PSC has verified and approved $7.3 billion as described above. Georgia Power filed its twenty-sixth VCM report with the Georgia PSC on February 17, 2022, reflecting $584 million of additional construction capital costs incurred through December 31, 2021 and the total capital cost forecast described above.

The ultimate outcome of these matters cannot be determined at this time.

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Mississippi Power

Performance Evaluation Plan

On March 15, 2022, Mississippi Power submitted its annual retail PEP filing for 2022 to the Mississippi PSC, which requested a 1.9%, or approximately $18 million, annual increase in revenues, primarily due to increases in investment, operations and maintenance expenses, and depreciation and amortization. In accordance with the PEP rate schedule, the rate increase became effective with the first billing cycle of April 2022, subject to refund. The related proceedings are expected to conclude in summer 2022; however, the ultimate outcome of this matter cannot be determined at this time.

Ad Valorem Tax Adjustment

On April 13, 2022, Mississippi Power submitted its annual ad valorem tax adjustment filing for 2022, which requested a $5 million annual increase in revenues. The ultimate outcome of this matter cannot be determined at this time.

Southern Company Gas

Infrastructure Replacement Programs and Capital Projects

Capital expenditures incurred under specific infrastructure replacement programs and capital projects during the first three months of 2022 were as follows:

Utility			Program			Three Months Ended March 31, 2022
						(in millions)
Nicor Gas			Investing in Illinois			$	51
Virginia Natural Gas			Steps to Advance Virginia's Energy			14
Atlanta Gas Light			System Reinforcement Rider			14
Chattanooga Gas			Pipeline Replacement Program			1
Total						$	80

(C) CONTINGENCIES

See Note 3 to the financial statements in Item 8 of the Form 10-K for information relating to various lawsuits and other contingencies.

General Litigation Matters

The Registrants are involved in various matters being litigated and regulatory matters. The ultimate outcome of such pending or potential litigation or regulatory matters against each Registrant and any subsidiaries cannot be determined at this time; however, for current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on such Registrant's financial statements.

The Registrants believe the pending legal challenges discussed below have no merit; however, the ultimate outcome of these matters cannot be determined at this time.

Southern Company

In February 2017, Jean Vineyard and Judy Mesirov each filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of Georgia. Each of these lawsuits names as defendants Southern Company, certain of its directors, certain of its current and former officers, and certain former Mississippi Power officers. In 2017, these two shareholder derivative lawsuits were consolidated in the U.S. District Court for the Northern District of

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Georgia. The complaints allege that the defendants caused Southern Company to make false or misleading statements regarding the Kemper County energy facility cost and schedule. Further, the complaints allege that the defendants were unjustly enriched and caused the waste of corporate assets and also allege that the individual defendants violated their fiduciary duties.

In May 2017, Helen E. Piper Survivor's Trust filed a shareholder derivative lawsuit in the Superior Court of Gwinnett County, Georgia that names as defendants Southern Company, certain of its directors, certain of its current and former officers, and certain former Mississippi Power officers. The complaint alleges that the individual defendants, among other things, breached their fiduciary duties in connection with schedule delays and cost overruns associated with the construction of the Kemper County energy facility. The complaint further alleges that the individual defendants authorized or failed to correct false and misleading statements regarding the Kemper County energy facility schedule and cost and failed to implement necessary internal controls to prevent harm to Southern Company. In August 2019, the court granted a motion filed by the plaintiff in July 2019 to substitute a new named plaintiff, Martin J. Kobuck, in place of Helen E. Piper Survivor's Trust.

The plaintiffs in each of these cases seek to recover, on behalf of Southern Company, unspecified actual damages and, on each plaintiff's own behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiffs also seek certain changes to Southern Company's corporate governance and internal processes. On January 21, 2022, the plaintiffs in the federal court action filed a motion for preliminary approval of settlement, together with an executed stipulation of settlement, which applies to both actions. On March 11, 2022, the U.S. District Court for the Northern District of Georgia entered an order preliminarily approving the settlement. The proposed settlement consists of an aggregate payment by Southern Company's insurers of approximately $4.5 million for attorneys' fees and expenses, as well as adoption of various corporate governance reforms by Southern Company. The terms of the proposed settlement and the corporate governance reforms remain subject to final approval by the court.

Georgia Power

In 2011, plaintiffs filed a putative class action against Georgia Power in the Superior Court of Fulton County, Georgia alleging that Georgia Power's collection in rates of amounts for municipal franchise fees (which fees are paid to municipalities) exceeded the amounts allowed in orders of the Georgia PSC and alleging certain state law claims. This case has been ruled upon and appealed numerous times over the last several years. In 2019, the Georgia PSC issued an order that found Georgia Power has appropriately implemented the municipal franchise fee schedule. In March 2021, the Superior Court of Fulton County granted class certification and Georgia Power's motion for summary judgment and the plaintiffs filed a notice of appeal. In April 2021, Georgia Power filed a notice of cross appeal on the issue of class certification. In December 2021, the Georgia Court of Appeals affirmed the Superior Court's ruling that granted summary judgment to Georgia Power and dismissed Georgia Power's cross appeal on the issue of class certification as moot. Also in December 2021, the plaintiffs filed a petition for writ of certiorari to the Georgia Supreme Court. The amount of any possible losses cannot be estimated at this time because, among other factors, it is unknown whether any losses would be subject to recovery from any municipalities.

In July 2020, a group of individual plaintiffs filed a complaint in the Superior Court of Fulton County, Georgia against Georgia Power alleging that releases from Plant Scherer have impacted groundwater, surface water, and air, resulting in alleged personal injuries and property damage. The plaintiffs seek an unspecified amount of monetary damages including punitive damages, a medical monitoring fund, and injunctive relief. Georgia Power has filed multiple motions to dismiss the complaint. In October 2021, three additional complaints were filed in the Superior Court of Monroe County, Georgia against Georgia Power alleging that releases from Plant Scherer have impacted groundwater and air, resulting in alleged personal injuries and property damage. The plaintiffs seek an unspecified amount of monetary damages including punitive damages. In November 2021, Georgia Power filed a notice to remove the three cases pending in the Superior Court of Monroe County, Georgia to the U.S. District Court for the Middle District of Georgia. On February 7, 2022, four additional complaints were filed in the Superior Court of Monroe County, Georgia against Georgia Power seeking damages for alleged personal injuries or property damage. On March 9, 2022, Georgia Power filed a notice to remove the four cases pending in the Superior Court of Monroe

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County, Georgia to the U.S. District Court for the Middle District of Georgia. The amount of any possible losses from these matters cannot be estimated at this time.

Mississippi Power

In 2018, Ray C. Turnage and 10 other individual plaintiffs filed a putative class action complaint against Mississippi Power and the three then-serving members of the Mississippi PSC in the U.S. District Court for the Southern District of Mississippi, which was amended in March 2019 to include four additional plaintiffs. Mississippi Power received Mississippi PSC approval in 2013 to charge a mirror CWIP rate premised upon including in its rate base pre-construction and construction costs for the Kemper IGCC prior to placing the Kemper IGCC into service. The Mississippi Supreme Court reversed that approval and ordered Mississippi Power to refund the amounts paid by customers under the previously-approved mirror CWIP rate. The plaintiffs allege that the initial approval process, and the amount approved, were improper and make claims for gross negligence, reckless conduct, and intentional wrongdoing. They also allege that Mississippi Power underpaid customers by up to $23.5 million in the refund process by applying an incorrect interest rate. The plaintiffs seek to recover, on behalf of themselves and their putative class, actual damages, punitive damages, pre-judgment interest, post-judgment interest, attorney's fees, and costs. The district court dismissed the amended complaint; however, in March 2020, the plaintiffs filed a motion seeking to name the new members of the Mississippi PSC, the Mississippi Development Authority, and Southern Company as additional defendants and add a cause of action against all defendants based on a dormant commerce clause theory under the U.S. Constitution. In July 2020, the plaintiffs filed a motion for leave to file a third amended complaint, which included the same federal claims as the proposed second amended complaint, as well as several additional state law claims based on the allegation that Mississippi Power failed to disclose the annual percentage rate of interest applicable to refunds. In November 2020, the district court denied each of the plaintiffs' pending motions and entered final judgment in favor of Mississippi Power. In January 2021, the district court denied further motions by the plaintiffs to vacate the judgment and to file a revised second amended complaint. In February 2021, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Fifth Circuit. On March 21, 2022, the U.S. Court of Appeals for the Fifth Circuit issued an opinion affirming the dismissal of the claims against the Mississippi PSC defendants but reversing the dismissal of the claims against Mississippi Power. The appellate court remanded the case to the U.S. District Court for the Southern District of Mississippi for further proceedings. The appellate court's decision is not final until the opportunity for rehearing en banc is resolved. An adverse outcome in this proceeding could have a material impact on Mississippi Power's financial statements.

Environmental Remediation

The Southern Company system must comply with environmental laws and regulations governing the handling and disposal of waste and releases of hazardous substances. Under these various laws and regulations, the Southern Company system could incur substantial costs to clean up affected sites. The traditional electric operating companies and the natural gas distribution utilities in Illinois and Georgia have each received authority from their respective state PSCs or other applicable state regulatory agencies to recover approved environmental remediation costs through regulatory mechanisms. These regulatory mechanisms are adjusted annually or as necessary within limits approved by the state PSCs or other applicable state regulatory agencies.

Georgia Power's environmental remediation liability was $16 million and $17 million at March 31, 2022 and December 31, 2021, respectively. Georgia Power has been designated or identified as a potentially responsible party at sites governed by the Georgia Hazardous Site Response Act and/or by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and assessment and potential cleanup of such sites is expected.

Southern Company Gas' environmental remediation liability was $249 million at both March 31, 2022 and December 31, 2021 based on the estimated cost of environmental investigation and remediation associated with known former manufactured gas plant operating sites.

The ultimate outcome of these matters cannot be determined at this time; however, as a result of the regulatory treatment for environmental remediation expenses described above, the final disposition of these matters is not expected to have a material impact on the financial statements of the applicable Registrants.

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(D) REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME

Revenue from Contracts with Customers

The Registrants generate revenues from a variety of sources, some of which are not accounted for as revenue from contracts with customers, such as leases, derivatives, and certain cost recovery mechanisms. See Note 1 to the financial statements under "Revenues" in Item 8 of the Form 10-K for additional information on the revenue policies of the Registrants. See "Lease Income" herein and Note (J) for additional information on revenue accounted for under lease and derivative accounting guidance, respectively.

The following table disaggregates revenue from contracts with customers for the three months ended March 31, 2022 and 2021:

			Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
			(in millions)
Three Months Ended March 31, 2022
Operating revenues
Retail electric revenues
Residential			$	1,525		$	634		$	821		$	70		$	—		$	—
Commercial			1,178			375			738			65			—			—
Industrial			727			323			334			70			—			—
Other			26			4			20			2			—			—
Total retail electric revenues			3,456			1,336			1,913			207			—			—
Natural gas distribution revenues
Residential			1,016			—			—			—			—			1,016
Commercial			270			—			—			—			—			270
Transportation			337			—			—			—			—			337
Industrial			32			—			—			—			—			32
Other			129			—			—			—			—			129
Total natural gas distribution revenues			1,784			—			—			—			—			1,784
Wholesale electric revenues
PPA energy revenues			342			59			32			3			251			—
PPA capacity revenues			134			39			12			3			81			—
Non-PPA revenues			58			64			9			102			73			—
Total wholesale electric revenues			534			162			53			108			405			—
Other natural gas revenues
Gas marketing services			243			—			—			—			—			243
Other natural gas revenues			16			—			—			—			—			16
Total natural gas revenues			259			—			—			—			—			259
Other revenues			225			48			95			9			8			—
Total revenue from contracts with customers			6,258			1,546			2,061			324			413			2,043
Other revenue sources(a)			390			103			147			11			126			15
Total operating revenues			$	6,648		$	1,649		$	2,208		$	335		$	539		$	2,058

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			Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
			(in millions)
Three Months Ended March 31, 2021
Operating revenues
Retail electric revenues
Residential			$	1,468		$	628		$	776		$	64		$	—		$	—
Commercial			1,117			372			686			59			—			—
Industrial			668			320			284			64			—			—
Other			24			5			17			2			—			—
Total retail electric revenues			3,277			1,325			1,763			189			—			—
Natural gas distribution revenues
Residential			614			—			—			—			—			614
Commercial			170			—			—			—			—			170
Transportation			288			—			—			—			—			288
Industrial			16			—			—			—			—			16
Other			97			—			—			—			—			97
Total natural gas distribution revenues			1,185			—			—			—			—			1,185
Wholesale electric revenues
PPA energy revenues			212			43			13			4			156			—
PPA capacity revenues			119			29			13			3			75			—
Non-PPA revenues			67			32			9			88			61			—
Total wholesale electric revenues			398			104			35			95			292			—
Other natural gas revenues
Wholesale gas services			1,590			—			—			—			—			1,590
Gas marketing services			194			—			—			—			—			194
Other natural gas revenues			7			—			—			—			—			7
Total natural gas revenues			1,791			—			—			—			—			1,791
Other revenues			249			46			113			8			4			—
Total revenue from contracts with customers			6,900			1,475			1,911			292			296			2,976
Other revenue sources(a)			1,306			84			59			15			144			1,014
Other adjustments(b)			(2,296)			—			—			—			—			(2,296)
Total operating revenues			$	5,910		$	1,559		$	1,970		$	307		$	440		$	1,694

(a)Other revenue sources relate to revenues from customers accounted for as derivatives and leases, alternative revenue programs at Southern Company Gas, and cost recovery mechanisms and revenues that meet other scope exceptions for revenues from contracts with customers at the traditional electric operating companies.

(b)Other adjustments relate to the cost of Southern Company Gas' energy and risk management activities. Wholesale gas services revenues are presented net of the related costs of those activities on the statement of income. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K and Note (L) under "Southern Company Gas" for information on the sale of Sequent and components of wholesale gas services' operating revenues, respectively.

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(UNAUDITED)

Contract Balances

The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at March 31, 2022 and December 31, 2021:

			Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
			(in millions)
Accounts Receivable
At March 31, 2022			$	2,571		$	616		$	695		$	85		$	128		$	865
At December 31, 2021			2,504			589			736			73			149			753
Contract Assets
At March 31, 2022			$	81		$	2		$	31		$	—		$	—		$	—
At December 31, 2021			117			2			63			—			1			—
Contract Liabilities
At March 31, 2022			$	72		$	3		$	13		$	2		$	1		$	—
At December 31, 2021			57			4			14			—			1			—

At March 31, 2022 and December 31, 2021, Georgia Power had contract assets primarily related to retail customer fixed bill programs, where the payment is contingent upon Georgia Power's continued performance and the customer's continued participation in the program over a one-year contract term, and unregulated service agreements, where payment is contingent on project completion. Contract liabilities for Georgia Power relate to cash collections recognized in advance of revenue for unregulated service agreements. Southern Company's unregulated distributed generation business had $47 million and $50 million of contract assets and $54 million and $39 million of contract liabilities at March 31, 2022 and December 31, 2021, respectively, for outstanding performance obligations.

Revenues recognized in the three months ended March 31, 2022, which were included in contract liabilities at December 31, 2021, were immaterial for all Registrants.

Remaining Performance Obligations

The Subsidiary Registrants have long-term contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. For the traditional electric operating companies and Southern Power, these contracts primarily relate to PPAs whereby electricity and generation capacity are provided to a customer. The revenue recognized for the delivery of electricity is variable; however, certain PPAs include a fixed payment for fixed generation capacity over the term of the contract. Southern Company's unregulated distributed generation business also has partially satisfied performance obligations related to certain fixed price contracts. Revenues from contracts with customers related to these performance obligations remaining at March 31, 2022 are expected to be recognized as follows:

			2022 (remaining)			2023			2024			2025			2026			Thereafter
			(in millions)
Southern Company			$	529		$	459		$	351		$	321		$	307		$	2,345
Alabama Power			24			24			7			5			—			—
Georgia Power			55			55			26			22			11			21
Southern Power			252			294			310			294			299			2,339

Revenue expected to be recognized for performance obligations remaining at March 31, 2022 was immaterial for Mississippi Power and Southern Company Gas.

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(UNAUDITED)

Lease Income

Lease income for the three months ended March 31, 2022 and 2021 is as follows:

			Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
			(in millions)
For the Three Months Ended March 31, 2022
Lease income - interest income on sales-type leases			$	6		$	—		$	—		$	4		$	2		$	—
Lease income - operating leases			51			20			8			—			21			9
Variable lease income			84			—			—			—			90			—
Total lease income			$	141		$	20		$	8		$	4		$	113		$	9
For the Three Months Ended March 31, 2021
Lease income - interest income on sales-type leases			$	3		$	—		$	—		$	3		$	—		$	—
Lease income - operating leases			55			21			10			—			21			9
Variable lease income			84			—			—			—			90			—
Total lease income			$	142		$	21		$	10		$	3		$	111		$	9

Lease payments received under tolling arrangements and PPAs consist of either scheduled payments or variable payments based on the amount of energy produced by the underlying electric generating units. Lease income for Alabama Power and Southern Power is included in wholesale revenues.

(E) CONSOLIDATED ENTITIES AND EQUITY METHOD INVESTMENTS

See Note 7 to the financial statements in Item 8 of the Form 10-K for additional information.

Southern Power

Variable Interest Entities

Southern Power has certain subsidiaries that are determined to be VIEs. Southern Power is considered the primary beneficiary of these VIEs because it controls the most significant activities of the VIEs, including operating and maintaining the respective assets, and has the obligation to absorb expected losses of these VIEs to the extent of its equity interests.

SP Solar and SP Wind

At March 31, 2022 and December 31, 2021, SP Solar had total assets of $6.0 billion and $6.1 billion, respectively, total liabilities of $407 million and $408 million, respectively, and noncontrolling interests of $1.1 billion. Cash distributions from SP Solar are allocated 67% to Southern Power and 33% to Global Atlantic in accordance with their partnership interest percentage. Under the terms of the limited partnership agreement, distributions without limited partner consent are limited to available cash and SP Solar is obligated to distribute all such available cash to its partners each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves.

At March 31, 2022 and December 31, 2021, SP Wind had total assets of $2.3 billion, total liabilities of $180 million and $130 million, respectively, and noncontrolling interests of $41 million. Under the terms of the limited liability agreement, distributions without Class A member consent are limited to available cash and SP Wind is obligated to distribute all such available cash to its members each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves. Cash distributions from SP Wind are generally allocated 60% to Southern Power and 40% to the three financial investors in accordance with the limited liability agreement.

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(UNAUDITED)

Southern Power consolidates both SP Solar and SP Wind, as the primary beneficiary, since it controls the most significant activities of each entity, including operating and maintaining their assets. Certain transfers and sales of the assets in the VIEs are subject to partner consent and the liabilities are non-recourse to the general credit of Southern Power. Liabilities consist of customary working capital items and do not include any long-term debt.

Other Variable Interest Entities

Southern Power has other consolidated VIEs that relate to certain subsidiaries that have either sold noncontrolling interests to tax equity investors or acquired less than a 100% interest from facility developers. These entities are considered VIEs because the arrangements are structured similar to a limited partnership and the noncontrolling members do not have substantive kick-out rights.

At March 31, 2022 and December 31, 2021, the other VIEs had total assets of $1.8 billion and $1.9 billion, respectively, total liabilities of $248 million and $263 million, respectively, and noncontrolling interests of $876 million and $886 million, respectively. Under the terms of the partnership agreements, distributions of all available cash are required each month or quarter and additional distributions require partner consent.

Equity Method Investments

At March 31, 2022 and December 31, 2021, Southern Power had equity method investments in wind and battery energy storage projects totaling $56 million and $86 million, respectively. Earnings (loss) from these investments were immaterial for both periods presented. During the first quarter 2022, Southern Power sold an equity method investment in a wind project and received proceeds of $31 million. The gain associated with the transaction was immaterial.

Southern Company Gas

Equity Method Investments

The carrying amounts of Southern Company Gas' equity method investments at March 31, 2022 and December 31, 2021 and related earnings from those investments for the three months ended March 31, 2022 and 2021 were as follows:

Investment Balance			March 31, 2022			December 31, 2021
			(in millions)
SNG			$	1,138		$	1,129
Other(*)			40			44
Total			$	1,178		$	1,173

(*)Balance at March 31, 2022 reflects a $4 million distribution from PennEast Pipeline.

									Three Months Ended March 31,
Earnings from Equity Method Investments												2022			2021
												(in millions)
SNG												$	39		$	38
Other(*)												1			3
Total												$	40		$	41

(*)Earnings primarily result from AFUDC equity recorded by the project entity.

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(UNAUDITED)

(F) FINANCING

Bank Credit Arrangements

See Note 8 to the financial statements under "Bank Credit Arrangements" in Item 8 of the Form 10-K for additional information.

At March 31, 2022, committed credit arrangements with banks were as follows:

			Expires
Company			2022						2024			2025			2026						Total						Unused																								Expires within One Year
			(in millions)
Southern Company parent			$	—					$	—		$	—		$	2,000					$	2,000					$	1,998																							$	—
Alabama Power			—						550			—			700						1,250						1,250																								—
Georgia Power			—						—			—			1,750						1,750						1,726																								—
Mississippi Power			—						150			125			—						275						255																								—
Southern Power(a)			—						—			—			600						600						568																								—
Southern Company Gas(b)			250						—			—			1,500						1,750						1,747																								250
SEGCO			30						—			—			—						30						30																								30
Southern Company			$	280					$	700		$	125		$	6,550					$	7,655					$	7,574																							$	280

(a)Does not include Southern Power Company's two $75 million continuing letter of credit facilities for standby letters of credit, expiring in 2023 and 2025, respectively, of which $11 million and $19 million, respectively, was unused at March 31, 2022. Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities.

(b)Southern Company Gas, as the parent entity, guarantees the obligations of Southern Company Gas Capital, which is the borrower of $800 million of the arrangement expiring in 2026 and all $250 million of the arrangement expiring in 2022. Southern Company Gas' committed credit arrangement expiring in 2026 also includes $700 million for which Nicor Gas is the borrower and which is restricted for working capital needs of Nicor Gas. Pursuant to the multi-year credit arrangement expiring in 2026, the allocations between Southern Company Gas Capital and Nicor Gas may be adjusted.

As reflected in the table above, in March 2022, Mississippi Power amended and restated its $125 million revolving credit arrangement, which among other things, extended the maturity date from 2023 to 2025 and allows for borrowing based on term SOFR.

Subject to applicable market conditions, Southern Company and its subsidiaries expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, Southern Company and its subsidiaries may extend the maturity dates and/or increase or decrease the lending commitments thereunder.

These bank credit arrangements, as well as the term loan arrangements of the Registrants, Nicor Gas, and SEGCO, contain covenants that limit debt levels and contain cross-acceleration or, in the case of Southern Power, cross-default provisions to other indebtedness (including guarantee obligations) that are restricted only to the indebtedness of the individual company. Such cross-default provisions to other indebtedness would trigger an event of default if Southern Power defaulted on indebtedness or guarantee obligations over a specified threshold. Such cross-acceleration provisions to other indebtedness would trigger an event of default if the applicable borrower defaulted on indebtedness, the payment of which was then accelerated. At March 31, 2022, the Registrants, Nicor Gas, and SEGCO were in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.

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(UNAUDITED)

A portion of the unused credit with banks is allocated to provide liquidity support to the revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO. The amount of variable rate revenue bonds of the traditional electric operating companies outstanding requiring liquidity support at March 31, 2022 was approximately $1.5 billion (comprised of approximately $789 million at Alabama Power, $672 million at Georgia Power, and $34 million at Mississippi Power). In addition, at March 31, 2022, Georgia Power had approximately $330 million of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months.

Earnings per Share

For Southern Company, the only differences in computing basic and diluted earnings per share are attributable to awards outstanding under stock-based compensation plans and the equity units issued in 2019. Earnings per share dilution resulting from stock-based compensation plans and the equity units issuance is determined using the treasury stock method. See Note 8 to the financial statements under "Equity Units" in Item 8 of the Form 10-K for information on the equity units and Note 12 to the financial statements in Item 8 of the Form 10-K for information on stock-based compensation plans. Shares used to compute diluted earnings per share were as follows:

						Three Months Ended March 31,
									2022			2021
									(in millions)
As reported shares									1,063			1,060
Effect of stock-based compensation									6			6
Diluted shares									1,069			1,066

An immaterial number of stock-based compensation awards was not included in the diluted earnings per share calculation because the awards were anti-dilutive for the three months ended March 31, 2022 and 2021.

(G) INCOME TAXES

See Note 10 to the financial statements in Item 8 of the Form 10-K for additional tax information.

Current and Deferred Income Taxes

Tax Credit and Net Operating Loss Carryforwards

The utilization of each Registrant's estimated tax credit and state net operating loss carryforwards and related valuation allowances could be impacted by numerous factors, including the acquisition of additional renewable projects, an increase in Georgia Power's ownership interest percentage in Plant Vogtle Units 3 and 4, the purchase of rights to additional PTCs of Plant Vogtle Units 3 and 4 pursuant to certain joint ownership agreements, changes in taxable income projections, and potential income tax rate changes. See Note (B) and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information on Plant Vogtle Units 3 and 4.

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(UNAUDITED)

Effective Tax Rate

Southern Company's effective tax rate is typically lower than the statutory rate due to employee stock plans' dividend deduction, non-taxable AFUDC equity at the traditional electric operating companies, flowback of excess deferred income taxes at the regulated utilities, and federal income tax benefits from ITCs and PTCs primarily at Southern Power.

Details of significant changes in the effective tax rate for the applicable Registrants are provided herein.

Mississippi Power

Mississippi Power's effective tax rate was 16.4% for the three months ended March 31, 2022 compared to 8.4% for the corresponding period in 2021. The effective tax rate increase was primarily due to a decrease in the flowback of excess deferred income taxes beginning in April 2021.

Southern Power

Southern Power's effective tax benefit rate was (80.0)% for the three months ended March 31, 2022 compared to (17.3)% for the corresponding period in 2021. The effective tax rate decrease was primarily due to lower pre-tax earnings and higher wind PTCs in 2022, partially offset by changes in state apportionment methodology resulting from tax legislation enacted by the State of Alabama in February 2021.

(H) RETIREMENT BENEFITS

The Southern Company system has a qualified defined benefit, trusteed, pension plan covering substantially all employees, with the exception of employees at PowerSecure. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2022. The Southern Company system also provides certain non-qualified defined benefits for a select group of management and highly compensated employees, which are funded on a cash basis. In addition, the Southern Company system provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional electric operating companies fund other postretirement trusts to the extent required by their respective regulatory commissions. Southern Company Gas has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses.

During the first quarter 2022, the qualified pension plan achieved the predetermined funding threshold whereby the asset allocation was adjusted to invest a larger portion of the portfolio in fixed rate debt securities.

See Note 11 to the financial statements in Item 8 of the Form 10-K for additional information.

On each Registrant's condensed statements of income, the service cost component of net periodic benefit costs is included in other operations and maintenance expenses and all other components of net periodic benefit costs are included in other income (expense), net. Components of the net periodic benefit costs for the three months ended March 31, 2022 and 2021 are presented in the following tables.

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(UNAUDITED)

			Southern Company						Alabama Power						Georgia Power						Mississippi Power						Southern Power						Southern Company Gas
			(in millions)
Three Months Ended March 31, 2022
Pension Plans
Service cost			$	103					$	25					$	26					$	4					$	2					$	9
Interest cost			102						24						31						5						2						7
Expected return on plan assets			(316)						(77)						(99)						(15)						(4)						(22)
Amortization:
Prior service costs			—						—						—						—						—						(1)
Regulatory asset			—						—						—						—						—						4
Net loss			60						16						18						3						1						2
Net periodic pension cost (income)			$	(51)					$	(12)					$	(24)					$	(3)					$	1					$	(1)
Postretirement Benefits
Service cost			$	6					$	1					$	2					$	—					$	—					$	—
Interest cost			10						3						4						—						—						1
Expected return on plan assets			(20)						(8)						(7)						—						—						(2)
Amortization:
Regulatory asset			—						—						—						—						—						2
Net periodic postretirement benefit cost (income)			$	(4)					$	(4)					$	(1)					$	—					$	—					$	1

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(UNAUDITED)

			Southern Company						Alabama Power						Georgia Power						Mississippi Power						Southern Power						Southern Company Gas
			(in millions)
Three Months Ended March 31, 2021
Pension Plans
Service cost			$	109					$	26					$	28					$	4					$	2					$	9
Interest cost			87						20						26						4						1						6
Expected return on plan assets			(298)						(72)						(94)						(14)						(3)						(21)
Amortization:
Prior service costs			—						—						—						—						—						(1)
Regulatory asset			—						—						—						—						—						4
Net loss			78						21						25						4						1						3
Net periodic pension cost (income)			$	(24)					$	(5)					$	(15)					$	(2)					$	1					$	—
Postretirement Benefits
Service cost			$	6					$	1					$	2					$	—					$	—					$	—
Interest cost			8						2						3						—						—						1
Expected return on plan assets			(19)						(7)						(7)						—						—						(2)
Amortization:
Regulatory asset			—						—						—						—						—						2
Net (gain)/loss			1						—						1						—						—						(1)
Net periodic postretirement benefit cost (income)			$	(4)					$	(4)					$	(1)					$	—					$	—					$	—

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(UNAUDITED)

(I) FAIR VALUE MEASUREMENTS

At March 31, 2022, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:

			Fair Value Measurements Using:
At March 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Net Asset Value as a Practical Expedient (NAV)						Total
			(in millions)
Southern Company
Assets:
Energy-related derivatives(a)			$	74					$	473					$	—					$	—					$	547
Interest rate derivatives			—						17						—						—						17
Investments in trusts:(b)(c)
Domestic equity			754						202						—						—						956
Foreign equity			143						167						—						—						310
U.S. Treasury and government agency securities			—						290						—						—						290
Municipal bonds			—						53						—						—						53
Pooled funds – fixed income			—						10						—						—						10
Corporate bonds			1						490						—						—						491
Mortgage and asset backed securities			—						88						—						—						88
Private equity			—						—						—						156						156
Cash and cash equivalents			3						—						—						—						3
Other			42						25						—						—						67
Cash equivalents			1,182						17						—						—						1,199
Other investments			9						32						—						—						41
Total			$	2,208					$	1,864					$	—					$	156					$	4,228
Liabilities:
Energy-related derivatives(a)			$	3					$	7					$	—					$	—					$	10
Interest rate derivatives			—						139						—						—						139
Foreign currency derivatives			—						130						—						—						130
Contingent consideration			—						—						14						—						14
Other			—						13						—						—						13
Total			$	3					$	289					$	14					$	—					$	306

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(UNAUDITED)

			Fair Value Measurements Using:
At March 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Net Asset Value as a Practical Expedient (NAV)						Total
			(in millions)
Alabama Power
Assets:
Energy-related derivatives			$	—					$	128					$	—					$	—					$	128
Nuclear decommissioning trusts:(b)
Domestic equity			452						193						—						—						645
Foreign equity			143						—						—						—						143
U.S. Treasury and government agency securities			—						21						—						—						21
Municipal bonds			—						2						—						—						2
Corporate bonds			1						253						—						—						254
Mortgage and asset backed securities			—						20						—						—						20
Private equity			—						—						—						156						156
Other			14						—						—						—						14
Cash equivalents			1,129						17						—						—						1,146
Other investments			—						32						—						—						32
Total			$	1,739					$	666					$	—					$	156					$	2,561
Liabilities:
Energy-related derivatives			$	—					$	2					$	—					$	—					$	2
Georgia Power
Assets:
Energy-related derivatives			$	—					$	179					$	—					$	—					$	179
Interest rate derivatives			—						12						—						—						12
Nuclear decommissioning trusts:(b)(c)
Domestic equity			302						1						—						—						303
Foreign equity			—						165						—						—						165
U.S. Treasury and government agency securities			—						269						—						—						269
Municipal bonds			—						51						—						—						51
Corporate bonds			—						237						—						—						237
Mortgage and asset backed securities			—						68						—						—						68
Other			28						25						—						—						53
Total			$	330					$	1,007					$	—					$	—					$	1,337
Liabilities:
Energy-related derivatives			$	—					$	1					$	—					$	—					$	1

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(UNAUDITED)

			Fair Value Measurements Using:
At March 31, 2022			Quoted Prices in Active Markets for Identical Assets (Level 1)						Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Net Asset Value as a Practical Expedient (NAV)						Total
			(in millions)
Mississippi Power
Assets:
Energy-related derivatives			$	—					$	138					$	—					$	—					$	138
Liabilities:
Energy-related derivatives			$	—					$	2					$	—					$	—					$	2
Southern Power
Assets:
Energy-related derivatives			$	—					$	8					$	—					$	—					$	8
Liabilities:
Foreign currency derivatives			$	—					$	43					$	—					$	—					$	43
Contingent consideration			—						—						14						—						14
Other			—						13						—						—						13
Total			$	—					$	56					$	14					$	—					$	70
Southern Company Gas
Assets:
Energy-related derivatives(a)			$	74					$	20					$	—					$	—					$	94
Non-qualified deferred compensation trusts:
Domestic equity			—						8						—						—						8
Foreign equity			—						2						—						—						2
Pooled funds – fixed income			—						10						—						—						10
Cash equivalents			3						—						—						—						3
Total			$	77					$	40					$	—					$	—					$	117
Liabilities:
Energy-related derivatives(a)			$	3					$	1					$	—					$	—					$	4
Interest rate derivatives			—						36						—						—						36
Total			$	3					$	37					$	—					$	—					$	40

(a)Excludes cash collateral of $36 million.

(b)Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

(c)Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. At March 31, 2022, approximately $72 million of the fair market value of Georgia Power's nuclear decommissioning trust funds' securities were on loan to creditors under the funds' managers' securities lending program. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Southern Company, Alabama Power, and Georgia Power continue to elect the option to fair value investment securities held in the nuclear decommissioning trust funds. The fair value of the funds, including reinvested interest and dividends and excluding the funds' expenses, increased (decreased) by the amounts shown in the table below for the three months ended March 31, 2022 and 2021. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.

Fair value increases (decreases)									Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
									(in millions)
Southern Company									$	(150)		$	39
Alabama Power									(67)			41
Georgia Power									(83)			(2)

Valuation Methodologies

The energy-related derivatives primarily consist of exchange-traded and over-the-counter financial products for natural gas and physical power products, including, from time to time, basis swaps. These are standard products used within the energy industry and are valued using the market approach. The inputs used are mainly from observable market sources, such as forward natural gas prices, power prices, implied volatility, and overnight index swap interest rates. Interest rate derivatives are also standard over-the-counter products that are valued using observable market data and assumptions commonly used by market participants. The fair value of interest rate derivatives reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future interest rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and occasionally, implied volatility of interest rate options. The fair value of cross-currency swaps reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future foreign currency exchange rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and discount rates. The interest rate derivatives and cross-currency swaps are categorized as Level 2 under Fair Value Measurements as these inputs are based on observable data and valuations of similar instruments. See Note (J) for additional information on how these derivatives are used.

For fair value measurements of the investments within the nuclear decommissioning trusts and the non-qualified deferred compensation trusts, external pricing vendors are designated for each asset class with each security specifically assigned a primary pricing source. For investments held within commingled funds, fair value is determined at the end of each business day through the net asset value, which is established by obtaining the underlying securities' individual prices from the primary pricing source. A market price secured from the primary source vendor is then evaluated by management in its valuation of the assets within the trusts. As a general approach, fixed income market pricing vendors gather market data (including indices and market research reports) and integrate relative credit information, observed market movements, and sector news into proprietary pricing models, pricing systems, and mathematical tools. Dealer quotes and other market information, including live trading levels and pricing analysts' judgments, are also obtained when available.

The NRC requires licensees of commissioned nuclear power reactors to establish a plan for providing reasonable assurance of funds for future decommissioning. See Note 6 to the financial statements under "Nuclear Decommissioning" in Item 8 of the Form 10-K for additional information.

Southern Power has contingent payment obligations related to certain acquisitions whereby it is primarily obligated to make generation-based payments to the seller, which commenced at the commercial operation of the respective facility and continue through 2026. The obligations are categorized as Level 3 under Fair Value Measurements as the fair value is determined using significant unobservable inputs for the forecasted facility generation in MW-hours, as well as other inputs such as a fixed dollar amount per MW-hour, and a discount rate. The fair value of contingent consideration reflects the net present value of expected payments and any periodic change arising from forecasted generation is expected to be immaterial.

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(UNAUDITED)

Southern Power also has payment obligations through 2040 whereby it must reimburse the transmission owners for interconnection facilities and network upgrades constructed to support connection of a Southern Power generating facility to the transmission system. The obligations are categorized as Level 2 under Fair Value Measurements as the fair value is determined using observable inputs for the contracted amounts and reimbursement period, as well as a discount rate. The fair value of the obligations reflects the net present value of expected payments.

"Other investments" include investments traded in the open market that have maturities greater than 90 days, which are categorized as Level 2 under Fair Value Measurements and are comprised of corporate bonds, bank certificates of deposit, treasury bonds, and/or agency bonds.

At March 31, 2022, the fair value measurements of private equity investments held in Alabama Power's nuclear decommissioning trusts that are calculated at net asset value per share (or its equivalent) as a practical expedient totaled $156 million and unfunded commitments related to the private equity investments totaled $84 million. Private equity investments include high-quality private equity funds across several market sectors and funds that invest in real estate assets. Private equity funds do not have redemption rights. Distributions from these funds will be received as the underlying investments in the funds are liquidated.

At March 31, 2022, other financial instruments for which the carrying amount did not equal fair value were as follows:

			Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas**(*)**
			(in billions)
Long-term debt, including securities due within one year:
Carrying amount			$	51.6		$	9.8		$	13.2		$	1.5		$	3.7		$	6.9
Fair value			51.9			10.0			13.5			1.5			3.8			6.9

(*)The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the 2016 merger with Southern Company. Southern Company Gas amortizes the fair value adjustments over the remaining lives of the respective bonds, the latest being through 2043.

The fair values are determined using Level 2 measurements and are based on quoted market prices for the same or similar issues or on the current rates available to the Registrants.

(J) DERIVATIVES

The Registrants are exposed to market risks, including commodity price risk, interest rate risk, weather risk, and occasionally foreign currency exchange rate risk. To manage the volatility attributable to these exposures, each company nets its exposures, where possible, to take advantage of natural offsets and enters into various derivative transactions for the remaining exposures pursuant to each company's policies in areas such as counterparty exposure and risk management practices. Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' wholesale gas operations used various contracts in its commercial activities that generally met the definition of derivatives. For the traditional electric operating companies, Southern Power, and Southern Company Gas' other businesses, each company's policy is that derivatives are to be used primarily for hedging purposes and mandates strict adherence to all applicable risk management policies. Derivative positions are monitored using techniques including, but not limited to, market valuation, value at risk, stress testing, and sensitivity analysis. Derivative instruments are recognized at fair value in the balance sheets as either assets or liabilities and are presented on a net basis. See Note (I) for additional fair value information. In the statements of cash flows, any cash impacts of settled energy-related and interest rate derivatives are recorded as operating activities. Any cash impacts of settled foreign currency derivatives are classified as operating or financing activities to correspond with the classification of the hedged interest or principal, respectively. See Note 1 to the financial statements under "Financial Instruments" in Item 8 of the Form 10-K for additional information. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information regarding the sale of Sequent.

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(UNAUDITED)

Energy-Related Derivatives

The Subsidiary Registrants enter into energy-related derivatives to hedge exposures to electricity, natural gas, and other fuel price changes. However, due to cost-based rate regulations and other various cost recovery mechanisms, the traditional electric operating companies and the natural gas distribution utilities have limited exposure to market volatility in energy-related commodity prices. Each of the traditional electric operating companies and certain of the natural gas distribution utilities of Southern Company Gas manage fuel-hedging programs, implemented per the guidelines of their respective state PSCs or other applicable state regulatory agencies, through the use of financial derivative contracts, which are expected to continue to mitigate price volatility. The traditional electric operating companies (with respect to wholesale generating capacity) and Southern Power have limited exposure to market volatility in energy-related commodity prices because their long-term sales contracts shift substantially all fuel cost responsibility to the purchaser. However, the traditional electric operating companies and Southern Power may be exposed to market volatility in energy-related commodity prices to the extent any uncontracted capacity is used to sell electricity. Southern Company Gas retains exposure to price changes that can, in a volatile energy market, be material and can adversely affect its results of operations.

Southern Company Gas also enters into weather derivative contracts as economic hedges in the event of warmer-than-normal weather. Exchange-traded options are carried at fair value, with changes reflected in operating revenues. Non-exchange-traded options are accounted for using the intrinsic value method. Changes in the intrinsic value for non-exchange-traded contracts are reflected in operating revenues.

Energy-related derivative contracts are accounted for under one of three methods:

• Regulatory Hedges – Energy-related derivative contracts designated as regulatory hedges relate primarily to the traditional electric operating companies' and the natural gas distribution utilities' fuel-hedging programs, where gains and losses are initially recorded as regulatory liabilities and assets, respectively, and then are included in fuel expense as the underlying fuel is used in operations and ultimately recovered through an approved cost recovery mechanism.

• Cash Flow Hedges – Gains and losses on energy-related derivatives designated as cash flow hedges (which are mainly used to hedge anticipated purchases and sales) are initially deferred in accumulated OCI before being recognized in the statements of income in the same period and in the same income statement line item as the earnings effect of the hedged transactions.

• Not Designated – Gains and losses on energy-related derivative contracts that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.

Some energy-related derivative contracts require physical delivery as opposed to financial settlement, and this type of derivative is both common and prevalent within the electric and natural gas industries. When an energy-related derivative contract is settled physically, any cumulative unrealized gain or loss is reversed and the contract price is recognized in the respective line item representing the actual price of the underlying goods being delivered.

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(UNAUDITED)

At March 31, 2022, the net volume of energy-related derivative contracts for natural gas positions, together with the longest hedge date over which the respective entity is hedging its exposure to the variability in future cash flows for forecasted transactions and the longest non-hedge date for derivatives not designated as hedges, were as follows:

			Net Purchased mmBtu						Longest Hedge Date						Longest Non-Hedge Date
			(in millions)
Southern Company(*)			279						2030						2025
Alabama Power			65						2025						—
Georgia Power			75						2024						—
Mississippi Power			71						2026						—
Southern Power			4						2030						—
Southern Company Gas(*)			64						2024						2025

(*)Southern Company Gas' derivative instruments include both long and short natural gas positions. A long position is a contract to purchase natural gas and a short position is a contract to sell natural gas. Southern Company Gas' volume represents the net of long natural gas positions of 66.2 million mmBtu and short natural gas positions of 2.6 million mmBtu at March 31, 2022, which is also included in Southern Company's total volume.

In addition to the volumes discussed above, the traditional electric operating companies and Southern Power enter into physical natural gas supply contracts that provide the option to sell back excess natural gas due to operational constraints. The maximum expected volume of natural gas subject to such a feature is 18 million mmBtu for Southern Company, which includes 4 million mmBtu for Alabama Power, 6 million mmBtu for Georgia Power, 3 million mmBtu for Mississippi Power, and 5 million mmBtu for Southern Power.

For cash flow hedges of energy-related derivatives, the estimated pre-tax gains expected to be reclassified from accumulated OCI to earnings for the 12-month period ending March 31, 2023 are $29 million for Southern Company, $26 million for Southern Company Gas, and immaterial for all other Registrants.

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(UNAUDITED)

Interest Rate Derivatives

Southern Company and certain subsidiaries may enter into interest rate derivatives to hedge exposure to changes in interest rates. Derivatives related to existing variable rate securities or forecasted transactions are accounted for as cash flow hedges where the derivatives' fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time and presented on the same income statement line item as the earnings effect of the hedged transactions. Derivatives related to existing fixed rate securities are accounted for as fair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are both recorded directly to earnings on the same income statement line item. Fair value gains or losses on derivatives that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.

At March 31, 2022, the following interest rate derivatives were outstanding:

			Notional Amount						Interest Rate Received			Weighted Average Interest Rate Paid			Hedge Maturity Date						Fair Value Gain (Loss) at March 31, 2022
			(in millions)																		(in millions)
Cash Flow Hedges of Forecasted Debt
Georgia Power			$	200					1.87%			—			February 2032						$	8
Georgia Power			100						2.27%			—			November 2051						4
Cash Flow Hedges of Existing Debt
Southern Company parent			100						2.58%			—			April 2027						(1)
Fair Value Hedges of Existing Debt
Southern Company parent			400						1.75%			1-month LIBOR + 0.68%			March 2028						(29)
Southern Company parent			1,000						3.70%			1-month LIBOR + 2.36%			April 2030						(69)
Southern Company Gas			500						1.75%			1-month LIBOR + 0.38%			January 2031						(35)
Southern Company			$	2,300																	$	(122)

For cash flow hedge interest rate derivatives, the estimated pre-tax gains (losses) expected to be reclassified from accumulated OCI to interest expense for the 12-month period ending March 31, 2023 total $(20) million for Southern Company and are immaterial for all other Registrants. Deferred gains and losses related to interest rate derivatives are expected to be amortized into earnings through 2051 for Southern Company, Alabama Power, and Georgia Power, 2028 for Mississippi Power, and 2046 for Southern Company Gas.

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(UNAUDITED)

Foreign Currency Derivatives

Southern Company and certain subsidiaries, including Southern Power, may enter into foreign currency derivatives to hedge exposure to changes in foreign currency exchange rates, such as that arising from the issuance of debt denominated in a currency other than U.S. dollars. Derivatives related to forecasted transactions are accounted for as cash flow hedges where the derivatives' fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time and on the same income statement line as the earnings effect of the hedged transactions, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Derivatives related to existing fixed rate securities are accounted for as fair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are both recorded directly to earnings on the same income statement line item, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Southern Company has elected to exclude the cross-currency basis spread from the assessment of effectiveness in the fair value hedges of its foreign currency risk and record any difference between the change in the fair value of the excluded components and the amounts recognized in earnings as a component of OCI.

At March 31, 2022, the following foreign currency derivatives were outstanding:

			Pay Notional			Pay Rate			Receive Notional			Receive Rate			Hedge Maturity Date			Fair Value Gain (Loss) at March 31, 2022
			(in millions)						(in millions)									(in millions)
Fair Value Hedges of Existing Debt
Southern Company parent			$	1,476		3.39%			€	1,250		1.88%			September 2027			$	(87)
Cash Flow Hedges of Existing Debt
Southern Power			$	677		2.95%			€	600		1.00%			June 2022			$	(24)
Southern Power			564			3.78%			500			1.85%			June 2026			(19)
Southern Power total			$	1,241					€	1,100								$	(43)
Southern Company			$	2,717					€	2,350								$	(130)

The estimated pre-tax losses related to Southern Power's foreign currency derivatives accounted for as cash flow hedges expected to be reclassified from accumulated OCI to earnings for the 12-month period ending March 31, 2023 are $17 million.

Derivative Financial Statement Presentation and Amounts

The Registrants enter into derivative contracts that may contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Southern Company and certain subsidiaries also utilize master netting agreements to mitigate exposure to counterparty credit risk. These agreements may contain provisions that permit netting across product lines and against cash collateral. The fair value amounts of derivative assets and liabilities on the balance sheets are presented net to the extent that there are netting arrangements or similar agreements with the counterparties.

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(UNAUDITED)

The fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected in the balance sheets as follows:

			At March 31, 2022						At December 31, 2021
Derivative Category and Balance Sheet Location			Assets			Liabilities			Assets			Liabilities
			(in millions)						(in millions)
Southern Company
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	381		$	1		$	129		$	30
Other deferred charges and assets/Other deferred credits and liabilities			116			6			72			6
Total derivatives designated as hedging instruments for regulatory purposes			$	497		$	7		$	201		$	36
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	28		$	2		$	7		$	5
Other deferred charges and assets/Other deferred credits and liabilities			5			—			1			—
Interest rate derivatives:
Assets from risk management activities/Other current liabilities			17			3			19			—
Other deferred charges and assets/Other deferred credits and liabilities			—			136			—			29
Foreign currency derivatives:
Assets from risk management activities/Other current liabilities			—			59			—			39
Other deferred charges and assets/Other deferred credits and liabilities			—			71			—			40
Total derivatives designated as hedging instruments in cash flow and fair value hedges			$	50		$	271		$	27		$	113
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	16		$	2		$	9		$	4
Other deferred charges and assets/Other deferred credits and liabilities			1			—			1			—
Total derivatives not designated as hedging instruments			$	17		$	2		$	10		$	4
Gross amounts recognized			$	564		$	280		$	238		$	153
Gross amounts offset**(a)**			(45)			(9)			(25)			(28)
Net amounts recognized in the Balance Sheets**(b)**			$	519		$	271		$	213		$	125

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(UNAUDITED)

			At March 31, 2022						At December 31, 2021
Derivative Category and Balance Sheet Location			Assets			Liabilities			Assets			Liabilities
			(in millions)						(in millions)
Alabama Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities			$	87		$	—		$	30		$	9
Other deferred charges and assets/Other deferred credits and liabilities			41			2			25			2
Total derivatives designated as hedging instruments for regulatory purposes			$	128		$	2		$	55		$	11
Gross amounts offset			(2)			(2)			(5)			(5)
Net amounts recognized in the Balance Sheets			$	126		$	—		$	50		$	6
Georgia Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	150		$	—		$	54		$	6
Other deferred charges and assets/Other deferred credits and liabilities			29			1			21			2
Total derivatives designated as hedging instruments for regulatory purposes			$	179		$	1		$	75		$	8
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Assets from risk management activities/Other current liabilities			$	12		$	—		$	—		$	—
Total derivatives designated as hedging instruments in cash flow and fair value hedges			$	12		$	—		$	—		$	—
Gross amounts recognized			$	191		$	1		$	75		$	8
Gross amounts offset			(1)			(1)			(8)			(8)
Net amounts recognized in the Balance Sheets			$	190		$	—		$	67		$	—
Mississippi Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	94		$	—		$	30		$	3
Other deferred charges and assets/Other deferred credits and liabilities			44			2			26			2
Total derivatives designated as hedging instruments for regulatory purposes			$	138		$	2		$	56		$	5
Gross amounts offset			(2)			(2)			(4)			(4)
Net amounts recognized in the Balance Sheets			$	136		$	—		$	52		$	1

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(UNAUDITED)

			At March 31, 2022						At December 31, 2021
Derivative Category and Balance Sheet Location			Assets			Liabilities			Assets			Liabilities
			(in millions)						(in millions)
Southern Power
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities			$	3		$	—		$	2		$	—
Other deferred charges and assets/Other deferred credits and liabilities			3			—			1			—
Foreign currency derivatives:
Other current assets/Other current liabilities			—			35			—			16
Other deferred charges and assets/Other deferred credits and liabilities			—			8			—			—
Total derivatives designated as hedging instruments in cash flow and fair value hedges			$	6		$	43		$	3		$	16
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities			$	2		$	—		$	1		$	—
Gross amounts recognized			$	8		$	43		$	4		$	16
Gross amounts offset			—			—			—			—
Net amounts recognized in the Balance Sheets			$	8		$	43		$	4		$	16

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(UNAUDITED)

			At March 31, 2022						At December 31, 2021
Derivative Category and Balance Sheet Location			Assets			Liabilities			Assets			Liabilities
			(in millions)						(in millions)
Southern Company Gas
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	49		$	1		$	15		$	12
Other deferred charges and assets/Other deferred credits and liabilities			3			—			—			—
Total derivatives designated as hedging instruments for regulatory purposes			$	52		$	1		$	15		$	12
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	25		$	2		$	5		$	5
Other deferred charges and assets/Other deferred credits and liabilities			2			—			—			—
Interest rate derivatives:
Assets from risk management activities/Liabilities from risk management activities-current			—			—			6			—
Other deferred charges and assets/Other deferred credits and liabilities			—			36			—			6
Total derivatives designated as hedging instruments in cash flow and fair value hedges			$	27		$	38		$	11		$	11
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities/Other current liabilities			$	14		$	1		$	8		$	4
Other deferred charges and assets/Other deferred credits and liabilities			1			—			1			—
Total derivatives not designated as hedging instruments			$	15		$	1		$	9		$	4
Gross amounts recognized			$	94		$	40		$	35		$	27
Gross amounts offset**(a)**			(40)			(4)			(8)			(11)
Net amounts recognized in the Balance Sheets**(b)**			$	54		$	36		$	27		$	16

(a)Gross amounts offset include cash collateral held on deposit in broker margin accounts of $36 million and $3 million at March 31, 2022 and December 31, 2021, respectively.

(b)Net amounts of derivative instruments outstanding exclude immaterial premium and intrinsic value associated with weather derivatives for both periods presented.

Energy-related derivatives not designated as hedging instruments were immaterial for the traditional electric operating companies at March 31, 2022. There were no such instruments for the traditional electric operating companies at December 31, 2021.

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(UNAUDITED)

At March 31, 2022 and December 31, 2021, the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred were as follows:

Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheet
Derivative Category and Balance Sheet Location			Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Company Gas
			(in millions)
At March 31, 2022:
Energy-related derivatives:
Other regulatory liabilities, current			$	353		$	87		$	150		$	94		$	22
Other regulatory liabilities, deferred			111			39			28			42			2
Total energy-related derivative gains (losses)			$	464		$	126		$	178		$	136		$	24
At December 31, 2021:
Energy-related derivatives:
Other regulatory assets, current			$	(17)		$	(6)		$	—		$	—		$	(11)
Other regulatory liabilities, current			107			28			48			27			4
Other regulatory liabilities, deferred			65			22			19			24			—
Total energy-related derivative gains (losses)			$	155		$	44		$	67		$	51		$	(7)

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(UNAUDITED)

For the three months ended March 31, 2022 and 2021, the pre-tax effects of cash flow and fair value hedge accounting on accumulated OCI were as follows:

Gain (Loss) Recognized in OCI on Derivative						For the Three Months Ended March 31,
						2022			2021
						(in millions)
Southern Company
Cash flow hedges:
Energy-related derivatives									$	42		$	5
Interest rate derivatives									9			3
Foreign currency derivatives									(28)			(47)
Fair value hedges(*):
Foreign currency derivatives									4			—
Total									$	27		$	(39)
Georgia Power
Cash flow hedges:
Interest rate derivatives									$	12		$	—
Southern Power
Cash flow hedges:
Energy-related derivatives									$	5		$	4
Foreign currency derivatives									(28)			(47)
Total									$	(23)		$	(43)
Southern Company Gas
Cash flow hedges:
Energy-related derivatives									$	37		$	1

(*)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI.

For the three months ended March 31, 2022 and 2021, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on accumulated OCI were immaterial for the other Registrants.

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(UNAUDITED)

For the three months ended March 31, 2022 and 2021, the pre-tax effects of cash flow and fair value hedge accounting on income were as follows:

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships						For the Three Months Ended March 31,
						2022			2021
						(in millions)
Southern Company
Total cost of natural gas									$	1,095		$	583
Gain (loss) on energy-related cash flow hedges*(a)*									9			(3)
Total depreciation and amortization									892			871
Gain (loss) on energy-related cash flow hedges*(a)*									2			3
Total interest expense, net of amounts capitalized									(462)			(450)
Gain (loss) on interest rate cash flow hedges*(a)*									(7)			(7)
Gain (loss) on foreign currency cash flow hedges*(a)*									(6)			(6)
Gain (loss) on interest rate fair value hedges*(b)*									(123)			(10)
Total other income (expense), net									145			58
Gain (loss) on foreign currency cash flow hedges*(a)(c)*									(25)			(60)
Gain (loss) on foreign currency fair value hedges									(24)			—
Amount excluded from effectiveness testing recognized in earnings									(4)			—
Southern Power
Total depreciation and amortization									$	120		$	119
Gain (loss) on energy-related cash flow hedges*(a)*									2			3
Total interest expense, net of amounts capitalized									(37)			(38)
Gain (loss) on foreign currency cash flow hedges*(a)*									(6)			(6)
Total other income (expense), net									2			7
Gain (loss) on foreign currency cash flow hedges*(a)(c)*									(25)			(60)
Southern Company Gas
Total cost of natural gas									$	1,095		$	583
Gain (loss) on energy-related cash flow hedges*(a)*									9			—
Total interest expense, net of amounts capitalized									(61)			(60)
Gain (loss) on interest rate cash flow hedges*(a)*									(1)			—
Gain (loss) on interest rate fair value hedges*(b)*									(36)			—

(a)Reclassified from accumulated OCI into earnings.

(b)For fair value hedges, changes in the fair value of the derivative contracts are generally equal to changes in the fair value of the underlying debt and have no material impact on income.

(c)The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record the euro-denominated notes.

For the three months ended March 31, 2022 and 2021, the pre-tax effects of cash flow and fair value hedge accounting on income for energy-related derivatives and interest rate derivatives were immaterial for the traditional electric operating companies.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

At March 31, 2022 and December 31, 2021, the following amounts were recorded on the balance sheets related to cumulative basis adjustments for fair value hedges:

			Carrying Amount of the Hedged Item									Cumulative Amount of Fair Value Hedging Adjustment included in Carrying Amount of the Hedged Item
Balance Sheet Location of Hedged Items			At March 31, 2022			At December 31, 2021						At March 31, 2022			At December 31, 2021
			(in millions)									(in millions)
Southern Company
Long-term debt			$	(3,136)		$	(3,280)					$	126		$	9
Southern Company Gas
Long-term debt			$	(459)		$	(493)					$	37		$	2

For the three months ended March 31, 2022 and 2021, the pre-tax effects of energy-related derivatives not designated as hedging instruments on the statements of income of Southern Company and Southern Company Gas were as follows:

															Gain (Loss)
												Three Months Ended March 31,
Derivatives in Non-Designated Hedging Relationships			Statements of Income Location												2022			2021
												(in millions)
Energy-related derivatives:			Natural gas revenues(*)												$	2		$	(17)
			Cost of natural gas												21			7
Total derivatives in non-designated hedging relationships															$	23		$	(10)

(*)Excludes immaterial gains (losses) recorded in natural gas revenues associated with weather derivatives for all periods presented.

For the three months ended March 31, 2022 and 2021, the pre-tax effects of interest rate derivatives not designated as hedging instruments were immaterial for Southern Company and Southern Company Gas and the pre-tax effects of energy-related derivatives not designated as hedging instruments were immaterial for all other Registrants.

Contingent Features

The Registrants do not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade. There are certain derivatives that could require collateral, but not accelerated payment, in the event of various credit rating changes of certain Southern Company subsidiaries. At March 31, 2022, the Registrants had no collateral posted with derivative counterparties to satisfy these arrangements.

For the applicable Registrants, the fair value of interest rate and energy-related derivative liabilities with contingent features and the maximum potential collateral requirements arising from the credit-risk-related contingent features, at a rating below BBB- and/or Baa3, were immaterial at March 31, 2022. The maximum potential collateral requirements arising from the credit-risk-related contingent features for the traditional electric operating companies and Southern Power include certain agreements that could require collateral in the event that one or more Southern Company power pool participants has a credit rating change to below investment grade. Following the sale of Gulf Power to NextEra Energy, Inc., Gulf Power has continued participating in the Southern Company power pool; however, the parties currently expect this participation to end during the third quarter 2022.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. If collateral is required, fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are not offset against fair value amounts recognized for derivatives executed with the same counterparty.

Alabama Power and Southern Power maintain accounts with certain regional transmission organizations to facilitate financial derivative transactions and they may be required to post collateral based on the value of the positions in these accounts and the associated margin requirements. At March 31, 2022, cash collateral posted in these accounts was immaterial. Southern Company Gas maintains accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and the associated margin requirements, Southern Company Gas may be required to deposit cash into these accounts. At March 31, 2022, cash collateral held on deposit in broker margin accounts was $36 million.

The Registrants are exposed to losses related to financial instruments in the event of counterparties' nonperformance. The Registrants only enter into agreements and material transactions with counterparties that have investment grade credit ratings by Moody's and S&P or with counterparties who have posted collateral to cover potential credit exposure. The Registrants have also established risk management policies and controls to determine and monitor the creditworthiness of counterparties in order to mitigate their exposure to counterparty credit risk.

Southern Company Gas uses established credit policies to determine and monitor the creditworthiness of counterparties, including requirements to post collateral or other credit security, as well as the quality of pledged collateral. Collateral or credit security is most often in the form of cash or letters of credit from an investment-grade financial institution, but may also include cash or U.S. government securities held by a trustee. Prior to entering a physical transaction, Southern Company Gas assigns its counterparties an internal credit rating and credit limit based on the counterparties' Moody's, S&P, and Fitch ratings, commercially available credit reports, and audited financial statements. Southern Company Gas may require counterparties to pledge additional collateral when deemed necessary.

Southern Company Gas utilizes netting agreements whenever possible to mitigate exposure to counterparty credit risk. Netting agreements enable Southern Company Gas to net certain assets and liabilities by counterparty across product lines and against cash collateral, provided the netting and cash collateral agreements include such provisions. While the amounts due from, or owed to, counterparties are settled net, they are recorded on a gross basis on the balance sheet as energy marketing receivables and energy marketing payables.

The Registrants do not anticipate a material adverse effect on their respective financial statements as a result of counterparty nonperformance.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

(K) ACQUISITIONS AND DISPOSITIONS

See Note 15 to the financial statements in Item 8 of the Form 10-K for additional information.

Southern Power

Construction Projects

During the three months ended March 31, 2022, Southern Power completed construction of and placed in service the remaining 40 MWs of the Tranquillity battery energy storage facility and the remaining 15 MWs of the Garland battery energy storage facility.

Project Facility			Resource			Approximate Nameplate Capacity (MW)			Location			COD			PPA Contract Period
Projects Completed During the Three Months Ended March 31, 2022
Garland Solar Storage(a)			Battery energy storage system			88			Kern County, CA			September 2021 through February 2022(b)			20 years
Tranquillity Solar Storage(a)			Battery energy storage system			72			Fresno County, CA			November 2021 through March 2022(c)			20 years

(a)Southern Power consolidates each project's operating results in its financial statements and the tax equity partner and two other partners each own a noncontrolling interest.

(b)The facility has a total capacity of 88 MWs, of which 73 MWs were placed in service in 2021 and 15 MWs were placed in service in February 2022.

(c)The facility has a total capacity of 72 MWs, of which 32 MWs were placed in service in 2021 and 40 MWs were placed in service in March 2022.

(L) SEGMENT AND RELATED INFORMATION

Southern Company

The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The traditional electric operating companies are vertically integrated utilities providing electric service in three Southeastern states. Southern Power develops, constructs, acquires, owns, and manages power generation assets, including renewable energy and battery energy storage projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through its natural gas distribution utilities and is involved in several other complementary businesses including gas pipeline investments and gas marketing services. Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' other businesses also included wholesale gas services.

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 sale of natural gas and other complementary products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $105 million and $81 million for the three months ended March 31, 2022 and 2021, respectively. Revenues from sales of natural gas from Southern Company Gas to the traditional electric operating companies were immaterial for both periods presented. Revenues from sales of natural gas from Southern Company Gas to Southern Power were $12 million for the three months ended March 31, 2021, which represented sales from Sequent prior to its sale. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include providing distributed energy and resilience solutions and deploying microgrids for commercial, industrial, governmental, and utility customers, as well as investments in telecommunications and, for the three months ended March 31, 2021, leveraged lease projects. All other inter-segment revenues are not material.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)

(UNAUDITED)

Financial data for business segments and products and services for the three months ended March 31, 2022 and 2021 was as follows:

			Electric Utilities
			Traditional Electric Operating Companies			Southern Power			Eliminations			Total			Southern Company Gas			All Other			Eliminations			Consolidated
			(in millions)
Three Months Ended March 31, 2022
Operating revenues			$	4,191		$	539		$	(221)		$	4,509		$	2,058		$	123		$	(42)		$	6,648
Segment net income (loss)(a)			774			72			—			846			319			(125)			(8)			1,032
At March 31, 2022
Goodwill			$	—		$	2		$	—		$	2		$	5,015		$	263		$	—		$	5,280
Total assets			90,460			13,766			(627)			103,599			23,377			4,236			(2,573)			128,639
Three Months Ended March 31, 2021
Operating revenues			$	3,764		$	440		$	(87)		$	4,117		$	1,694		$	134		$	(35)		$	5,910
Segment net income (loss)(a)(b)(c)			756			97			—			853			398			(108)			(8)			1,135
At December 31, 2021
Goodwill			$	—		$	2		$	—		$	2		$	5,015		$	263		$	—		$	5,280
Total assets			89,051			13,390			(667)			101,774			23,560			2,975			(775)			127,534

(a)Attributable to Southern Company.

(b)For the traditional electric operating companies, includes a pre-tax charge of $48 million ($36 million after tax) at Georgia Power for estimated losses associated with the construction of Plant Vogtle Units 3 and 4. See Note (B) and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information.

(c)For Southern Power, includes gains on wind turbine equipment contributed to various equity method investments totaling approximately $37 million pre-tax ($28 million after tax). See Note 15 to the financial statements under "Southern Power – Development Projects" in Item 8 of the Form 10-K for additional information.

Products and Services

			Electric Utilities' Revenues
			Retail			Wholesale			Other			Total
			(in millions)
Three Months Ended March 31, 2022			$	3,613		$	664		$	232		$	4,509
Three Months Ended March 31, 2021			3,342			545			230			4,117

			Southern Company Gas' Revenues
			Gas Distribution Operations			Wholesale Gas Services**(*)**			Gas Marketing Services			Other			Total
			(in millions)
Three Months Ended March 31, 2022			$	1,791		$	—		$	243		$	24		$	2,058
Three Months Ended March 31, 2021			1,192			298			195			9			1,694

(*)Prior to the sale of Sequent, the revenues for wholesale gas services were netted with costs associated with its energy and risk management activities. See "Southern Company Gas" herein and Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.

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(UNAUDITED)

Southern Company Gas

Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services. Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' reportable segments also included wholesale gas services. The non-reportable segments are combined and presented as all other. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information on the sale of Sequent.

Gas distribution operations 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 in four states.

Gas pipeline investments 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. Gas pipeline investments also includes a 20% ownership interest in the PennEast Pipeline project, which was cancelled in September 2021. See Note 7 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.

Through July 1, 2021, wholesale gas services provided natural gas asset management and/or related logistics services for each of Southern Company Gas' utilities except Nicor Gas as well as for non-affiliated companies. Additionally, wholesale gas services engaged in natural gas storage and gas pipeline arbitrage and related activities.

Gas marketing services provides natural gas marketing to end-use customers primarily in Georgia and Illinois through SouthStar.

The all other column includes segments and subsidiaries that fall below the quantitative threshold for separate disclosure, including storage and fuels operations.

Business segment financial data for the three months ended March 31, 2022 and 2021 was as follows:

			Gas Distribution Operations			Gas Pipeline Investments			Wholesale Gas Services**(*)**			Gas Marketing Services			Total			All Other			Eliminations			Consolidated
			(in millions)
Three Months Ended March 31, 2022
Operating revenues			$	1,803		$	8		$	—		$	243		$	2,054		$	16		$	(12)		$	2,058
Segment net income (loss)			214			29			—			66			309			10			—			319
Total assets at March 31, 2022			21,034			1,473			—			1,640			24,147			12,017			(12,787)			23,377
Three Months Ended March 31, 2021
Operating revenues			$	1,200		$	8		$	298		$	195		$	1,701		$	7		$	(14)		$	1,694
Segment net income (loss)			183			29			126			56			394			4			—			398
Total assets at December 31, 2021			20,917			1,467			31			1,556			23,971			12,114			(12,525)			23,560

(*)As a result of the sale of Sequent, wholesale gas services is no longer a reportable segment for the three months ended March 31, 2022. Prior to the sale of Sequent, the revenues for wholesale gas services were netted with costs associated with its energy and risk management activities. A reconciliation of operating revenues and intercompany revenues is shown in the following table.

			Third Party Gross Revenues			Intercompany Revenues			Total Gross Revenues			Less Gross Gas Costs			Operating Revenues
			(in millions)
Three Months Ended March 31, 2021			$	2,588		$	63		$	2,651		$	2,353		$	298

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