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SOUTHERN CO

SO
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Business Summary

Southern Company operates as a holding company that, through its subsidiaries, provides electric service in the states of Alabama, Georgia, and Mississippi, and natural gas distribution services in Illinois, Georgia, Virginia, and Tennessee. The company's traditional operating companies are vertically integrated electric utilities that generate, transmit, distribute, and sell electricity. Southern Company also owns Southern Power, a wholesale energy provider, and Southern Company Gas, a natural gas distribution company. The industry is characterized by significant regulation at the state and federal levels, with rates and returns determined by regulatory commissions.

Southern Company's competitive positioning is built on its regulated utility model, which provides a stable earnings base. The company's traditional operating companies — Alabama Power, Georgia Power, and Mississippi Power — operate as regulated monopolies in their respective service territories. Southern Company Gas is one of the largest natural gas distribution companies in the United States. The filing does not name specific competitors or provide market share data.

Southern Company generates revenue primarily through the sale of electricity and natural gas to retail and wholesale customers. The company's revenue is predominantly recurring, derived from regulated rate structures that include base rates, fuel cost recovery mechanisms, and various riders. Customer segments include residential, commercial, industrial, and wholesale customers. The company also generates revenue from gas marketing services and other non-utility activities.

Southern Company's electric operations are conducted through three traditional operating companies: Alabama Power, Georgia Power, and Mississippi Power. These subsidiaries generate, transmit, distribute, and sell electricity to retail customers in their respective states. In 2025, retail electric revenues were $15.719 billion , wholesale electric revenues were $1.637 billion , and other electric revenues were $1.177 billion . The company also owns Southern Power, which develops, constructs, acquires, and manages power generation assets, including renewable energy projects, and sells electricity at wholesale. Southern Power's wholesale revenues were $1.637 billion in 2025.

Southern Company Gas provides natural gas distribution services through its subsidiaries: Atlanta Gas Light, Chattanooga Gas, Nicor Gas, and Virginia Natural Gas. In 2025, natural gas revenues were $5.248 billion , which included $4.924 billion from gas distribution operations and $324 million from gas marketing services. The gas distribution segment serves approximately 4.3 million retail customers across four states. Other revenues, which include gas marketing services and other non-utility activities, were $1.177 billion in 2025.

During 2025, Southern Company completed the acquisition of Plant Daniel Units 1 and 2 from Mississippi Power for $377 million . The company also issued $1.0 billion of 6.50% Junior Subordinated Notes due 2085 and $500 million of 2025 Series A Corporate Units. In addition, the company retired $1.0 billion of 5.25% Junior Subordinated Notes due 2077 and $500 million of 4.95% Junior Subordinated Notes due 2080. Southern Company also completed the sale of its 50% interest in the McGrau Ford, Twiggs County, and Wadley solar facilities for $200 million in cash.

For the fiscal year ended December 31, 2025, Southern Company reported total operating revenues of $25.640 billion , compared to $25.129 billion in 2024 and $25.128 billion in 2023. Net income attributable to Southern Company was $4.109 billion in 2025, compared to $4.091 billion in 2024 and $3.153 billion in 2023. Diluted earnings per share were $3.75 in 2025, compared to $3.74 in 2024 and $2.89 in 2023.

Business Outlook

Southern Company is pursuing growth through significant capital investment in its regulated electric and natural gas businesses. The company's capital expenditure plan for the period 2026 through 2028 is approximately $14.0 billion , with a focus on generation, transmission, and distribution infrastructure. The company is also investing in renewable energy projects through Southern Power, including solar and battery storage facilities. In 2025, Southern Power placed into service the Millers Branch Solar facility, which has a total capacity of 200 megawatts across three phases.

Georgia Power is pursuing growth through the development of new generation resources. In December 2025, the Georgia Public Service Commission approved Georgia Power's 2025 Integrated Resource Plan, which includes the addition of approximately 2,800 megawatts of new solar generation, 1,000 megawatts of battery energy storage, and 1,400 megawatts of new natural gas generation. The plan also includes the retirement of certain coal-fired units. The company expects these investments to support long-term earnings growth.Southern Company's operational outlook includes continued investment in its electric and natural gas infrastructure. The company's capital expenditure plan for 2026 through 2028 is approximately $14.0 billion , which includes investments in generation, transmission, distribution, and renewable energy projects. The company also plans to invest in its natural gas distribution system, including pipeline replacement and system reinforcement programs. The filing does not discuss headcount or workforce strategy.

Southern Company's capital allocation priorities include funding its capital expenditure program, maintaining a strong balance sheet, and returning value to shareholders through dividends. The company's capital expenditure plan for 2026 through 2028 is approximately $14.0 billion . The filing does not provide specific R&D spending levels, share repurchase authorization amounts, or dividend policy figures beyond what is stated in the financial statements.

Southern Company faces headwinds from the potential for increased regulation of greenhouse gas emissions and other environmental matters. The company's operations are subject to extensive federal, state, and local environmental laws and regulations, including those related to air emissions, water discharges, and waste management. Compliance with these regulations could require significant capital expenditures and increase operating costs. The company also faces risks related to the availability and cost of fuel, particularly natural gas, which can impact its fuel cost recovery mechanisms.

Southern Company's growth plan is subject to execution risks related to the construction and operation of large capital projects, including nuclear, solar, and natural gas generation facilities. The company's Vogtle Units 3 and 4 nuclear expansion project, which was completed in 2024, involved significant cost overruns and construction delays. The company also faces risks related to the integration of acquired businesses and the realization of expected synergies. Regulatory approval for rate recovery of capital investments is a key constraint on the company's ability to earn its authorized return on equity.

Risk Factors

Southern Company faces material risks related to the regulation of greenhouse gas emissions, which could require significant capital expenditures and increase operating costs. The company's coal-fired generating units are subject to increasingly stringent environmental regulations, including the EPA's Clean Power Plan 2.0 and other rules. The company also faces risks related to the availability and cost of fuel, particularly natural gas, which can impact its fuel cost recovery mechanisms and earnings. The company's nuclear generating units, including the recently completed Vogtle Units 3 and 4, are subject to risks related to operational performance, regulatory oversight, and the disposal of spent nuclear fuel. The company's capital expenditure plan of approximately $14.0 billion for 2026 through 2028 is subject to execution risks, including construction delays, cost overruns, and the ability to recover investments through regulated rates. The company also faces risks related to the creditworthiness of its wholesale customers and the potential for customer defaults.

Management Priorities

Management's message in the 10-K filing emphasizes the company's commitment to its regulated utility business model and its focus on operational excellence, customer service, and financial discipline. The filing states that the company's strategic priorities include investing in its electric and natural gas infrastructure to support reliability and growth, advancing the transition to a cleaner energy future, and maintaining a strong balance sheet. Management highlights the successful completion of the Vogtle Units 3 and 4 nuclear expansion project and the company's progress in adding renewable energy resources.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 8, Note 3 — Segment Information
  2. [2] Item 8, Note 3 — Segment Information
  3. [3] Item 8, Note 3 — Segment Information
  4. [4] Item 8, Note 3 — Segment Information
  5. [5] Item 8, Note 3 — Segment Information
  6. [6] Item 8, Note 3 — Segment Information
  7. [7] Item 8, Note 3 — Segment Information
  8. [8] Item 1, Business — Southern Company Gas
  9. [9] Item 8, Note 3 — Segment Information
  10. [10] Item 7, MD&A — Liquidity and Capital Resources
  11. [11] Item 7, MD&A — Liquidity and Capital Resources
  12. [12] Item 7, MD&A — Liquidity and Capital Resources
  13. [13] Item 7, MD&A — Liquidity and Capital Resources
  14. [14] Item 7, MD&A — Liquidity and Capital Resources
  15. [15] Item 7, MD&A — Results of Operations
  16. [16] Item 7, MD&A — Results of Operations
  17. [17] Item 8, Consolidated Statements of Income
  18. [18] Item 8, Consolidated Statements of Income
  19. [19] Item 8, Consolidated Statements of Income
  20. [20] Item 8, Consolidated Statements of Income
  21. [21] Item 8, Consolidated Statements of Income
  22. [22] Item 8, Consolidated Statements of Income
  23. [23] Item 8, Consolidated Statements of Income
  24. [24] Item 8, Consolidated Statements of Income
  25. [25] Item 8, Consolidated Statements of Income
  26. [26] Item 7, MD&A — Capital Resources and Liquidity
  27. [27] Item 1, Business — Southern Power
  28. [28] Item 7, MD&A — Georgia Power
  29. [29] Item 7, MD&A — Georgia Power
  30. [30] Item 7, MD&A — Georgia Power
  31. [31] Item 7, MD&A — Capital Resources and Liquidity
  32. [32] Item 7, MD&A — Capital Resources and Liquidity
  33. [33] Item 7, MD&A — Capital Resources and Liquidity
  34. [34] Item 8, Consolidated Statements of Income
  35. [35] Item 8, Consolidated Statements of Income
  36. [36] Item 8, Consolidated Statements of Income
  37. [37] Item 8, Consolidated Statements of Income
  38. [38] Item 8, Consolidated Statements of Income
  39. [39] Item 8, Consolidated Statements of Income
  40. [40] Item 8, Consolidated Statements of Income
  41. [41] Item 8, Consolidated Statements of Income
  42. [42] Item 8, Consolidated Statements of Income
  43. [43] Item 8, Consolidated Statements of Income
  44. [44] Item 8, Consolidated Statements of Income
  45. [45] Item 8, Consolidated Statements of Income
  46. [46] Item 8, Consolidated Statements of Cash Flows
  47. [47] Item 8, Consolidated Statements of Cash Flows
  48. [48] Item 8, Consolidated Statements of Cash Flows
  49. [49] Item 8, Consolidated Balance Sheets
  50. [50] Item 8, Consolidated Balance Sheets
  51. [51] Item 8, Note 10 — Income Taxes
  52. [52] Item 8, Note 10 — Income Taxes
  53. [53] Item 8, Note 10 — Income Taxes
  54. [54] Item 7, MD&A — Consolidated Results
  55. [55] Item 7, MD&A — Consolidated Results
  56. [56] Item 7, MD&A — Consolidated Results
  57. [57] Item 8, Note 3 — Segment Information
  58. [58] Item 8, Note 3 — Segment Information
  59. [59] Item 8, Note 3 — Segment Information
  60. [60] Item 8, Note 3 — Segment Information
  61. [61] Item 8, Note 3 — Segment Information

Analysis on 6/21/2026