Consolidated Entities and Equity Method Investments

3 Months Ended

Mar. 31, 2026

Consolidated Entities and Equity Method Investments

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 Company

At March 31, 2026 and December 31, 2025, Southern Holdings had equity method investments totaling $125 million and $124 million, respectively, primarily related to investments in venture capital funds focused on energy and utility investments. Earnings/losses from these investments were immaterial for all periods presented.

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

At March 31, 2026 and December 31, 2025, SP Solar had total assets of $5.1 billion and $5.2 billion, respectively, total liabilities of $361 million and $360 million, respectively, and noncontrolling interests of $899 million and $918 million, respectively. Cash distributions from SP Solar are allocated 67% to Southern Power and 33% to the limited partner 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.

Southern Power consolidates SP Solar, as the primary beneficiary, since it controls the most significant activities of the entity, including operating and maintaining its assets. Certain transfers and sales of the assets in the VIE 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, 2026 and December 31, 2025, the other VIEs had total assets of $1.6 billion, total liabilities of $246 million and $236 million, respectively, and noncontrolling interests of $590 million and $617 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.

Southern Company Gas

The carrying amounts of Southern Company Gas' equity method investments at March 31, 2026 and December 31, 2025 were as follows:


Investment Balance	At March 31, 2026		At December 31, 2025
	(in millions)
SNG	$	1,190	$	1,148
Other	34		34
Total	$	1,224	$	1,182

The earnings from Southern Company Gas' equity method investment in SNG were $46 million and $39 million for the three months ended March 31, 2026 and 2025, respectively. The earnings from Southern Company Gas' other equity method investments were immaterial for all periods presented.