The Southern Company Q4 FY2025 earnings call

• 2025 was an outstanding year with adjusted earnings at the top of guidance, driven by investment in state-regulated utilities, customer growth, and revenue sources. - Economic development activity at utilities is robust with over 120 companies locating or expanding in service territories, supporting over 21,000 jobs. - 3 electric utilities operate in vertically integrated markets, and 4 gas utilities have made significant investments in safety and modernization. - Southern Power has opportunities in natural gas generation renewal and expansion. - Smaller subsidiaries like PowerSecure and Southern Telecom have growth opportunities. - Georgia Power made filings for storm and fuel cost recoveries to lower rates for customers.

In 2025, Southern Company had strong adjusted earnings per share of $4.30, which was at the top of the 2025 guidance range, representing 6% growth from the prior year and 9% average annual growth from 2023. Weather-normalized total retail electricity sales for the year were up 1.7% compared to 2024. Georgia Power grew 2.5% from 2024, with all 3 customer classes up, including commercial sales up 17% year-over-year for the second year in a row due to large load data center customers. Residential customer growth was strong with 39,000 new electric customers and 25,000 new natural gas customers. Industrial electricity sales grew 1.4% in 2025. The 4 gas utilities (LDCs) have tripled their authorized rate base since acquisition and are active in data center markets. Southern Power has an industry-leading portfolio with over 13 gigawatts of capacity, and there are opportunities for remarketing, up-rating, and adding new generation.

2026 adjusted earnings per share guidance range is $4.50 to $4.60. 2027 initial guidance range is $4.85 to $4.95, 2028 initial range is $5.25 to $5.45. Longer term, expected 7% to 8% growth from 2028 range. Base capital investment forecast is $81 billion over next 5 years, 95% at state-regulated utilities, with potential for capital plan to grow. Projected long-term sales growth and earnings growth trajectory supported by large load contracts, capital plan, and financing plan.

Q: Nick Campanella asked about trending beyond '28 and how outcomes affect the plan.

A: Chris Womack and David Poroch discussed confidence in execution, projects, and potential upside from Southern Power.

Q: Steven Fleishman asked about 3 gigawatts in late stage.

A: David Poroch said they're near term, baked into forecast.

Q: Julien Dumoulin-Smith asked about procurement side and CapEx increase.

A: David Poroch talked about portfolio growth and rough estimate for incremental generation.

Q: Carly Davenport asked about data center legislation in Georgia.

A: Christopher Womack talked about project momentum and community benefits.

Q: Stephen D’Ambrisi asked about Southern Power opportunity and gas expansion.

A: David Poroch and Christopher Womack discussed capacity price increase and disciplined approach to gas expansion.

Q: Jeremy Tonet asked about parameters driving guidance high and low.

A: David Poroch talked about disciplined scenarios and visibility.

Q: Andrew Weisel asked about dividend growth.

A: David Poroch talked about dividend as part of value proposition.

Q: Alex asked about minimum take on contracts.

A: David Poroch and Christopher Womack talked about minimum bills and upside.

Q: Nicholas Amicucci asked about transmission and contract duration.

A: David Poroch and Christopher Womack talked about transmission opportunities and contract duration of 15 years or longer.

Q: Paul Fremont asked about gas plants, upgrades, and regulatory approval.

A: Christopher Womack and David Poroch talked about gas plants for regulated utilities, early upgrades, and regulatory review.

Q: Travis Miller asked about gas supply and battery components.

A: Christopher Womack said physical supply is secured