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

Q1 2026 earnings beat + strong underlying demand - Adjusted EPS: $1.32/share, up $0.09 YOY and $0.12 above the company’s estimate. - Drivers: customer growth + higher usage (notably data centers), plus stronger gas utility revenues and higher energy-related revenues at Southern Power; partially offset by higher financing costs and milder winter weather vs. 2025. - Q2 2026 outlook (forecast): Adjusted EPS = $1.00/share (management estimate).

Electric sales momentum is unusually strong (and is being pulled by “large load” customers) - Weather-normal retail electricity sales (all classes): +2.3% YOY in Q1—the highest first-quarter growth in recent history. - Residential: 46k net new customers added; Commercial +4.5% (weather-adjusted) with data center strength; Industrial +1.5% with particular strength in Alabama steel. - Data center usage: +42% YOY (accelerating ramp at large-load facilities), reinforcing that demand is not just new customers but also rising consumption.

Large-load contracting keeps accelerating, supporting the capital plan and rate-stability strategy - Total contracted/late-stage large load: 23 GW; in the last two months, +1.9 GW contracted with high-credit-quality hyperscalers, taking fully contracted large load to >11 GW across Alabama, Georgia, and Mississippi. - Pipeline: prospective >75 GW; management says it’s in active late-stage discussions for another ~12 GW through the mid-2030s (up +2 GW vs. last quarter). - “Upside” expectation is tied to contracted growth that is structured so customers cover incremental/full cost to serve (with collateral/minimum bills/cancellation fees), which is intended to benefit existing customers and support rate stability. - Regulatory linkage: Georgia Power started an all-source RFP for 2–6 GW of new dispatchable resources projected in-service 2032–2033; process timing implies limited near-term CapEx visibility until the process completes.