Southern Company - 5.25% NT REDEEM 01/12/2077 USD 25

Strong Q3 operating + earnings beat; 2026 outlook raised - Adjusted Q3 EPS: $1.94, up $0.34 YoY and $0.29 above the prior estimate. - Drivers: warmer weather, higher usage, customer growth, higher large commercial/industrial revenue (incl. data centers), and higher Southern Power earnings. - Offsets: higher non-fuel O&M, higher taxes (other than income), and dilution from more shares. - YTD adjusted EPS: $4.40 vs $3.76 (2025). - Q4 adjusted EPS guidance: $0.30 → implies full-year 2026 adjusted EPS $4.70 (about $0.10 above the top of original guidance range), equating to ~9% YoY adjusted earnings growth.

Demand/growth is accelerating—largest “weather-normal” gains in generations; data centers are a major tailwind - Management cites the highest weather-normal sales growth in generations: - +3.5% in Q3 and +2.7% year-to-date (Y/Y). - Commercial strength is leading: commercial sales +7.3% YoY in Q3. - Data center usage: +59% this quarter and +52% YTD, attributed to accelerating customer load ramps. - Residential: +1.3% sales in Q3 (about 15,000 new electric residential customers and ~6,000 new gas residential customers). - Industrial: robust growth across most top segments (notably primary metals, lumber, transportation).

Large-load contract momentum + “funnel” replenishment; major opportunity for additional capacity - Signed large-load contracts now total 21 GW, with +7 GW late-stage (Alabama, Georgia, Mississippi). - In Q3, Alabama Power and Georgia Power each added ~2 GW of contracted load. - Contract economics/policy emphasis: - Minimum bills decoupled from usage, with large loads paying at least full share (supports financial forecast visibility and affordability outcomes). - Base rates flat in Alabama and Georgia until at least 2029; also highlighted Georgia Power rate reduction saving a typical residential customer ~$50/year, plus ~$3B of customer benefits (~$180/year after the freeze). - Management indicated pipeline/risk-adjusted interest remains high (they referenced prospective activity figures), but they caution they probably won’t “land” the entire notional pipeline figure—they’ll manage risk.