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v3.25.3

Financing | 9 Months Ended
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Sep. 30, 2025
Debt Disclosure [Abstract] |
Financing | 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 September 30, 2025, committed credit arrangements with banks were as follows:
|  | Expires |  |  |  |  |  |  |  |
Company |  | 2026 | 2027 |  | 2029 | 2030 |  | Total |  | Unused |  |  |  |  |  |  |  | Expires within One Year
|  | (in millions)
Southern Company parent(a) |  | $ | — |  | $ | 500 |  |  | $ | — |  | $ | 2,500 |  |  | $ | 3,000 |  |  | $ | 2,999 |  |  |  |  |  |  |  |  | $ | — |
Alabama Power(b) |  | 15 |  | — |  |  | 650 |  | 700 |  |  | 1,365 |  |  | 1,365 |  |  |  |  |  |  |  |  | — |
Georgia Power(c) |  | — |  | — |  |  | — |  | 2,050 |  |  | 2,050 |  |  | 2,042 |  |  |  |  |  |  |  |  | — |
Mississippi Power(a) |  | — |  | 125 |  |  | — |  | 150 |  |  | 275 |  |  | 275 |  |  |  |  |  |  |  |  | — |
Southern Power(a)(d) |  | — |  | — |  |  | — |  | 600 |  |  | 600 |  |  | 600 |  |  |  |  |  |  |  |  | — |
Southern Company Gas(e) |  | — |  | — |  |  | — |  | 1,600 |  |  | 1,600 |  |  | 1,598 |  |  |  |  |  |  |  |  | — |
SEGCO |  | 30 |  | — |  |  | — |  | — |  |  | 30 |  |  | 30 |  |  |  |  |  |  |  |  | 30 |
Southern Company |  | $ | 45 |  | $ | 625 |  |  | $ | 650 |  | $ | 7,600 |  |  | $ | 8,920 |  |  | $ | 8,909 |  |  |  |  |  |  |  |  | $ | 30 |
(a)Arrangement expiring in 2030 represents a $3.25 billion combined arrangement for Southern Company, Mississippi Power, and Southern Power allowing for flexible sublimits. Pursuant to the combined facility, the allocations among Southern Company, Southern Power, and Mississippi Power may be adjusted. (b)Includes $15 million expiring in 2026 at Alabama Property Company, a wholly-owned subsidiary of Alabama Power, of which $15 million was unused at September 30, 2025. Alabama Power is not party to this arrangement. (c)Georgia Power had $26 million of letters of credit outstanding under an uncommitted letter of credit facility at September 30, 2025. (d)Does not include Southern Power Company's $75 million and $100 million continuing letter of credit facilities for standby letters of credit, expiring in 2027 and 2028, respectively, of which $17 million and $4 million, respectively, was unused at September 30, 2025. In addition, Southern Power Company had $23 million of letters of credit outstanding under an uncommitted letter of credit facility at September 30, 2025. Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities. (e)Southern Company Gas, as the parent entity, guarantees the obligations of Southern Company Gas Capital, which is the borrower of $800 million of the credit arrangement expiring in 2030. Southern Company Gas' committed credit arrangement expiring in 2030 also includes $800 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 2030, the allocations between Southern Company Gas Capital and Nicor Gas may be adjusted. As reflected in the table above, in March 2025, (i) Southern Company and Southern Power amended and restated their combined multi-year credit arrangement to include Mississippi Power, increase the total credit arrangement from $2.45 billion to $3.25 billion (currently allocated $2.50 billion for Southern Company, $600 million for Southern Power, and $150 million for Mississippi Power), and extend the maturity date from 2029 to 2030; (ii) Southern Company increased its $150 million credit arrangement to $500 million and extended the maturity date from 2025 to 2027; (iii) Georgia Power increased its $1.75 billion credit arrangement to $2.05 billion and extended the maturity date from 2029 to 2030; and (iv) Southern Company Gas Capital, along with Nicor Gas, increased its $1.5 billion credit arrangement to $1.6 billion (currently allocated $800 million for each of Southern Company Gas Capital and Nicor Gas). Also in March 2025, (i) Georgia Power terminated $300 million of credit arrangements expiring in 2025, (ii) Mississippi Power terminated $150 million of credit arrangements expiring in 2027, and (iii) Nicor Gas terminated a $100 million credit arrangement expiring in 2025. Alabama Power and Southern Company Gas Capital, along with Nicor Gas, entered into agreements in March 2025 to extend the maturity date of each of their respective multi-year credit agreements in May 2025 from 2029 to 2030. In May and June 2025, SEGCO amended its credit arrangements aggregating $30 million, which extended the maturity dates from 2025 to 2026. In August 2025, Alabama Power amended and restated its $650 million credit arrangement and extended the maturity date from 2026 to 2029. 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 provisions to other indebtedness (including guarantee obligations) that are restricted only to the indebtedness of the individual company. The 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 September 30, 2025, 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. A portion of the unused credit with banks is allocated to provide liquidity support to certain revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO. At September 30, 2025, outstanding variable rate demand revenue bonds of the traditional electric operating companies with allocated liquidity support totaled approximately $1.5 billion (comprised of approximately $796 million at Alabama Power, $667 million at Georgia Power, and $58 million at Mississippi Power). In addition, at September 30, 2025, Alabama Power and Georgia Power had approximately $280 million and $384 million, respectively, of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months. Alabama Power's $280 million of fixed rate revenue bonds are classified as securities due within one year on its balance sheets as they are not covered by long-term committed credit. All other variable rate demand revenue bonds and fixed rate revenue bonds required to be remarketed within the next 12 months are classified as long-term debt on the balance sheets as a result of available long-term committed credit. Convertible Senior Notes In May 2025, Southern Company issued $1.65 billion aggregate principal amount of Series 2025A 3.25% Convertible Senior Notes due June 15, 2028 (Series 2025A Convertible Senior Notes). Southern Company used a portion of the proceeds from the Series 2025A Convertible Senior Notes to repurchase approximately $781.6 million of the $1.725 billion aggregate principal amount outstanding of its Series 2023A 3.875% Convertible Senior Notes due December 15, 2025 and approximately $328.1 million of the $1.5 billion aggregate principal amount outstanding of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027, in each case, through privately negotiated transactions with a limited number of holders thereof. Southern Company evaluated these repurchases and determined that all of the repurchased notes were accounted for as extinguishment of debt. As a result of these transactions, Southern Company recognized a $129 million loss on extinguishment of debt in the second quarter 2025 within interest expense in the consolidated statements of income. Interest on the Series 2025A Convertible Senior Notes is payable semiannually, beginning December 15, 2025. The Series 2025A Convertible Senior Notes will mature on June 15, 2028, unless earlier converted or repurchased, but are not redeemable at the option of Southern Company. The Series 2025A Convertible Senior Notes are direct, unsecured, and unsubordinated obligations of Southern Company, ranking equally with all of Southern Company's other unsecured and unsubordinated indebtedness from time to time outstanding, and are effectively subordinated to all secured indebtedness of Southern Company. Holders may convert their Series 2025A Convertible Senior Notes at their option prior to the close of business on the business day preceding March 15, 2028, but only under the following circumstances: •during any calendar quarter (and only during such calendar quarter), if the last reported sale price of Southern Company's common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day as determined by Southern Company; •during the five business day period after any 10 consecutive trading day period (Measurement Period) in which the trading price per $1,000 principal amount of Series 2025A Convertible Senior Notes, as determined by Southern Company following a request by a holder of Series 2025A Convertible Senior Notes, for each trading day of the Measurement Period was less than 98% of the product of the last reported sale price of the common stock and the conversion rate on each such trading day; or •upon the occurrence of certain corporate events specified in the indenture governing the Series 2025A Convertible Senior Notes. On or after March 15, 2028, a holder may convert all or any portion of its Series 2025A Convertible Senior Notes at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date regardless of the foregoing conditions. Southern Company will settle conversions of the Series 2025A Convertible Senior Notes by paying cash up to the aggregate principal amount of the Series 2025A Convertible Senior Notes to be converted and paying or delivering, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock, at Southern Company's election, in respect of the remainder, if any, of Southern Company's conversion obligation in excess of the aggregate principal amount of the Series 2025A Convertible Senior Notes being converted. The Series 2025A Convertible Senior Notes are initially convertible at a rate of 8.8077 shares of common stock per $1,000 principal amount converted, which is approximately equal to $113.54 per share of common stock. The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a make-whole fundamental change (as defined in the indenture governing the Series 2025A Convertible Senior Notes), Southern Company will, in certain circumstances, increase the conversion rate by a number of additional shares of common stock for conversions in connection with the make-whole fundamental change. Upon the occurrence of a fundamental change, other than an excluded fundamental change (each as defined in the indenture governing the Series 2025A Convertible Senior Notes), holders of the Series 2025A Convertible Senior Notes may require Southern Company to purchase all or a portion of their Series 2025A Convertible Senior Notes, in principal amounts equal to $1,000 or an integral multiple thereof, for cash at a price equal to 100% of the principal amount of the Series 2025A Convertible Senior Notes to be purchased plus any accrued and unpaid interest. Equity Distribution Agreement See Note 8 to the financial statements under "Equity Distribution Agreement" in Item 8 of the Form 10-K for additional information. The table below reflects shares of Southern Company common stock sold under separate forward sale contracts with forward purchasers during the nine months ended September 30, 2025.
Shares Sold | Initial Forward Price per Share | To be Settled On or Before
292,694(a) | $83.3293 | December 31, 2025
563,386 | $87.9027 | December 31, 2025
1,000,000 | $88.7502 | June 30, 2026
1,000,000 | $88.7739 | June 30, 2026
1,000,000 | $91.2856 | June 30, 2026
1,000,000 | $89.1444 | June 30, 2026
1,000,000 | $88.8490 | June 30, 2026
1,000,000 | $88.8903 | June 30, 2026
1,000,000 | $90.9196 | June 30, 2026
1,255,000 | $91.0566 | June 30, 2026
1,324,942 | $88.7048 | December 31, 2026
2,277,113 | $88.3227 | December 31, 2026
3,130,641 | $88.2823 | December 31, 2026
3,255,866 | $89.4692 | December 31, 2026
3,850,000 | $90.6617 | December 31, 2026
2,470,306 | $94.5394 | June 30, 2027
2,314,487 | $92.7805 | June 30, 2027
1,590,200 | $93.4524 | June 30, 2027
4,000,000 | $90.8141 | June 30, 2027
2,346,903 | $91.1610 | June 30, 2027
2,876,034 | $92.2437 | June 30, 2027
2,642,878(b) | $93.4521(b) | June 30, 2027
(a)The total number of shares sold under this forward sale contract is 436,614, of which the first 143,920 shares were sold in December 2024. (b)The total number of shares sold under this forward sale contract is 3,015,668, of which the remaining 372,790 shares were sold subsequent to September 30, 2025. The initial forward price was determined after the completion of sales by the forward seller in October 2025. As of September 30, 2025, Southern Company had entered into separate forward sale contracts with forward purchasers for a total of 43,707,160 shares of common stock, of which 43,334,370 shares had been sold by the forward sellers, and no shares had been settled under the forward sale contracts. In October 2025, Southern Company entered into another separate forward sale contract with a forward purchaser for the sale of 911,448 shares of common stock with an initial forward price of $94.2411 per share, to be settled on or before June 30, 2027. Each initial forward price is subject to adjustment under certain circumstances as specified in the forward sales contract. Southern Company may settle these forward transactions in shares, cash, or net shares. Earnings per Share For Southern Company, the difference in computing basic and diluted earnings per share (EPS) is attributable to awards outstanding under stock-based compensation plans, forward sale contracts pursuant to the equity distribution agreement, and convertible senior notes. EPS dilution resulting from stock-based compensation plans and the forward sale contracts is determined using the treasury stock method, and EPS dilution resulting from the convertible senior notes is determined using the net share settlement method. See "Convertible Senior Notes" and "Equity Distribution Agreement" herein and Note 8 to the financial statements under "Convertible Senior Notes" and "Equity Distribution Agreement" and Note 12 to the financial statements in Item 8 of the Form 10-K for additional information. Shares used to compute diluted EPS were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30,
| 2025 | 2024 | 2025 | 2024
| (in millions)
As reported shares | 1,102 |  | 1,097 |  | 1,101 |  | 1,096 |
Effect of stock-based compensation | 6 |  | 6 |  | 6 |  | 6 |
Effect of convertible senior notes | 1 |  | — |  | 1 |  | — |
Effect of forward sale contracts | 1 |  | — |  | — |  | — |
Diluted shares | 1,110 |  | 1,103 |  | 1,108 |  | 1,102 |
For all periods presented, an immaterial number of stock-based compensation awards was excluded from the diluted EPS calculation because the awards were anti-dilutive.

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