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LEASES (Tables)

12 Months Ended

Dec. 31, 2025

The major categories of lease obligations are as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
At December 31, 2025
Electric generating units(*)	$	1,064	$	53	$	1,793	$	—	$	—	$	—
Real estate/land	931		3		37		1		541		111
Communication towers	134		3		5		—		—		20
Railcars	74		39		26		9		—		—
Other	49		6		3		19		—		—
Total	$	2,252	$	104	$	1,864	$	29	$	541	$	131

At December 31, 2024
Electric generating units(*)	$	672	$	56	$	1,509	$	—	$	—	$	—
Real estate/land	834		3		45		2		540		20
Communication towers	118		2		4		—		—		21
Railcars	64		31		29		4		—		—
Other	52		2		2		16		—		—
Total	$	1,740	$	94	$	1,589	$	22	$	540	$	41

(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.

Balance sheet amounts recorded for operating and financing leases

Balance sheet amounts recorded for operating and finance leases were as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
At December 31, 2025
Operating Leases
Operating lease ROU assets, net	$	1,358	$	86	$	1,120	$	9	$	479	$	85

Operating lease obligations - current	$	197	$	14	$	170	$	4	$	31	$	8
Operating lease obligations - non-current	1,287		78		960		6		510		123
Total operating lease obligations(*)	$	1,484	$	92	$	1,130	$	10	$	541	$	131

Finance Leases
Finance lease ROU assets, net	$	742	$	12	$	710	$	18	$	—	$	—

Finance lease obligations - current	$	16	$	3	$	29	$	1	$	—	$	—
Finance lease obligations - non-current	752		9		705		18		—		—
Total finance lease obligations	$	768	$	12	$	734	$	19	$	—	$	—

At December 31, 2024
Operating Leases
Operating lease ROU assets, net	$	1,386	$	84	$	1,331	$	8	$	484	$	38

Operating lease obligations - current	$	200	$	14	$	169	$	4	$	29	$	11
Operating lease obligations - non-current	1,253		76		1,159		4		511		30
Total operating lease obligations(*)	$	1,453	$	90	$	1,328	$	8	$	540	$	41

Finance Leases
Finance lease ROU assets, net	$	254	$	4	$	227	$	14	$	—	$	—

Finance lease obligations - current	$	9	$	1	$	20	$	1	$	—	$	—
Finance lease obligations - non-current	278		3		241		13		—		—
Total finance lease obligations	$	287	$	4	$	261	$	14	$	—	$	—

(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $486 million, $53 million, and $1.1 billion, respectively, at December 31, 2025 and $567 million, $55 million, and $1.3 billion, respectively, at December 31, 2024.

Lease costs and other information

Lease costs for 2025, 2024, and 2023, which includes both amounts recognized as operations and maintenance expense and amounts capitalized as part of the cost of another asset, were as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
2025
Lease cost
Operating lease cost(*)	$	271	$	19	$	248	$	5	$	34	$	21
Finance lease cost:
Amortization of ROU assets	13		1		22		1		—		—
Interest on lease obligations	11		—		12		—		—		—
Total finance lease cost	24		1		34		1		—		—
Short-term lease costs	45		22		15		—		—		—
Variable lease cost	52		—		79		—		6		—

Total lease cost	$	392	$	42	$	376	$	6	$	40	$	21

2024
Lease cost
Operating lease cost(*)	$	248	$	19	$	190	$	4	$	27	$	12
Finance lease cost:
Amortization of ROU assets	20		2		23		1		—		—
Interest on lease obligations	15		—		15		1		—		—
Total finance lease cost	35		2		38		2		—		—
Short-term lease costs	37		15		15		—		—		—
Variable lease cost	48		(1)		77		—		4		—

Total lease cost	$	368	$	35	$	320	$	6	$	31	$	12

2023
Lease cost
Operating lease cost(*)	$	252	$	16	$	192	$	5	$	34	$	12
Finance lease cost:
Amortization of ROU assets	24		2		19		1		—		—
Interest on lease obligations	14		—		17		—		—		—
Total finance lease cost	38		2		36		1		—		—
Short-term lease costs	40		16		16		—		—		—
Variable lease cost	47		—		74		—		4		—

Total lease cost	$	377	$	34	$	318	$	6	$	38	$	12

(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $113 million, $5 million, and $222 million, respectively, in 2025, $108 million, $5 million, and $168 million, respectively, in 2024, and $112 million, $4 million, and $174 million, respectively, in 2023.

Other information with respect to cash and noncash activities related to leases, as well as weighted-average lease terms and discount rates, is as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
2025
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases	$	270	$	19	$	257	$	4	$	33	$	13
Operating cash flows from finance leases	11		—		17		—		—		—
Financing cash flows from finance leases	21		2		32		1		—		—
ROU assets obtained under operating leases	168		16		18		6		2		61

ROU assets obtained under finance leases	509		10		513		6		—		—

2024
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases	$	243	$	19	$	186	$	4	$	33	$	12
Operating cash flows from finance leases	15		—		21		—		—		—
Financing cash flows from finance leases	11		2		23		1		—		—
ROU assets obtained under operating leases	146		11		609		—		10		1
Reassessment of ROU assets under operating leases	(7)		—		—		—		(7)		—
ROU assets obtained under finance leases	1		—		44		—		—		—

2023
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases	$	253	$	17	$	199	$	5	$	33	$	12
Operating cash flows from finance leases	15		—		22		—		—		—
Financing cash flows from finance leases	18		2		16		1		—		—
ROU assets obtained under operating leases	100		30		26		1		7		7

ROU assets obtained under finance leases	3		3		18		—		—		—


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
At December 31, 2025
Weighted-average remaining lease term in years:
Operating leases	16.0		9.7		7.0		4.6		31.4		10.9
Finance leases	19.8		3.4		18.1		10.1		N/A		N/A
Weighted-average discount rate:
Operating leases	4.88	%	5.07	%	4.82	%	4.58	%	4.96	%	5.30	%
Finance leases	5.38	%	4.38	%	5.68	%	3.78	%	N/A		N/A

At December 31, 2024
Weighted-average remaining lease term in years:
Operating leases	16.4		10.2		7.9		4.3		32.3		6.8
Finance leases	16.0		2.7		10.1		10.9		N/A		N/A
Weighted-average discount rate:
Operating leases	4.73	%	5.04	%	4.73	%	3.83	%	4.88	%	3.84	%
Finance leases	4.86	%	4.05	%	5.8	%	2.74	%	N/A		N/A

Maturities of operating lease liabilities

Maturities of lease liabilities are as follows:


	At December 31, 2025
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Maturity Analysis
Operating leases:
2026	$	233	$	18	$	221	$	4	$	33	$	9
2027	217		15		218		2		29		15
2028	202		11		216		2		30		16
2029	168		9		195		1		30		15
2030	118		9		111		1		30		16
Thereafter	1,294		56		378		1		954		110
Total	2,232		118		1,339		11		1,106		181
Less: Present value discount	748		26		209		1		565		50
Operating lease obligations	$	1,484	$	92	$	1,130	$	10	$	541	$	131

Finance leases:
2026	$	33	$	3	$	47	$	2	$	—	$	—
2027	32		2		47		2		—		—
2028	44		2		59		2		—		—
2029	65		1		82		2		—		—
2030	67		1		63		2		—		—
Thereafter	1,130		6		985		14		—		—
Total	1,371		15		1,283		24		—		—
Less: Present value discount	603		3		549		5		—		—
Finance lease obligations	$	768	$	12	$	734	$	19	$	—	$	—

Maturities of finance lease liabilities

Maturities of lease liabilities are as follows:


	At December 31, 2025
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Maturity Analysis
Operating leases:
2026	$	233	$	18	$	221	$	4	$	33	$	9
2027	217		15		218		2		29		15
2028	202		11		216		2		30		16
2029	168		9		195		1		30		15
2030	118		9		111		1		30		16
Thereafter	1,294		56		378		1		954		110
Total	2,232		118		1,339		11		1,106		181
Less: Present value discount	748		26		209		1		565		50
Operating lease obligations	$	1,484	$	92	$	1,130	$	10	$	541	$	131

Finance leases:
2026	$	33	$	3	$	47	$	2	$	—	$	—
2027	32		2		47		2		—		—
2028	44		2		59		2		—		—
2029	65		1		82		2		—		—
2030	67		1		63		2		—		—
Thereafter	1,130		6		985		14		—		—
Total	1,371		15		1,283		24		—		—
Less: Present value discount	603		3		549		5		—		—
Finance lease obligations	$	768	$	12	$	734	$	19	$	—	$	—

Lease income, operating leases

Lease income for 2025, 2024, and 2023 was as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
2025
Lease income - interest income on sales-type leases	$	23	$	—	$	—	$	14	$	9	$	—
Lease income - operating leases	145		7		29		3		148		36
Variable lease income	408		1		—		—		442		—
Total lease income	$	576	$	8	$	29	$	17	$	599	$	36

2024
Lease income - interest income on sales-type leases	$	24	$	—	$	—	$	15	$	9	$	—
Lease income - operating leases	136		9		28		3		88		36
Variable lease income	417		1		—		—		450		—
Total lease income	$	577	$	10	$	28	$	18	$	547	$	36

2023
Lease income - interest income on sales-type leases	$	24	$	—	$	—	$	14	$	10	$	—
Lease income - operating leases	164		35		29		2		85		37
Variable lease income	406		1		—		—		437		—
Total lease income	$	594	$	36	$	29	$	16	$	532	$	37

Lease income, sales-type leases and Power Purchase Agreements

Lease income for 2025, 2024, and 2023 was as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
2025
Lease income - interest income on sales-type leases	$	23	$	—	$	—	$	14	$	9	$	—
Lease income - operating leases	145		7		29		3		148		36
Variable lease income	408		1		—		—		442		—
Total lease income	$	576	$	8	$	29	$	17	$	599	$	36

2024
Lease income - interest income on sales-type leases	$	24	$	—	$	—	$	15	$	9	$	—
Lease income - operating leases	136		9		28		3		88		36
Variable lease income	417		1		—		—		450		—
Total lease income	$	577	$	10	$	28	$	18	$	547	$	36

2023
Lease income - interest income on sales-type leases	$	24	$	—	$	—	$	14	$	10	$	—
Lease income - operating leases	164		35		29		2		85		37
Variable lease income	406		1		—		—		437		—
Total lease income	$	594	$	36	$	29	$	16	$	532	$	37

Undiscounted cash flows to be received under tolling arrangements accounted for as sales-type leases

The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:


	At December 31, 2025
	Southern Company		Mississippi Power		Southern Power
	(in millions)
2026	$	39	$	23	$	15
2027	38		22		15
2028	37		21		15
2029	36		20		15
2030	34		19		15
Thereafter	270		114		155
Total undiscounted cash flows	$	454	$	219	$	230
Net investment in sales-type lease(*)	286		130		152
Difference between undiscounted cash flows and discounted cash flows	$	168	$	89	$	78

(*)For Mississippi Power, included in other current assets ($10 million and $10 million at December 31, 2025 and 2024, respectively) and other property and investments ($120 million and $129 million at December 31, 2025 and 2024, respectively) on the balance sheets. For Southern Power, included in other current assets ($15 million and $15 million at December 31, 2025 and 2024, respectively) and net investment in sales-type leases ($137 million and $143 million at December 31, 2025 and 2024, respectively) on the balance sheets.

Undiscounted cash flows to be received under PPAs accounted for as operating leases

The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases are as follows:


	At December 31, 2025
	Southern Company		Alabama Power		Southern Power		Southern Company Gas
	(in millions)
2026	$	119	$	6	$	148	$	35
2027	111		5		150		28
2028	111		4		161		28
2029	116		4		164		28
2030	115		3		103		28
Thereafter	554		34		400		299
Total	$	1,126	$	56	$	1,126	$	446