Southern Company - 4.95% NT REDEEM 30/01/2080 USD 25

Strong Q2 and solid 1H momentum; guidance raised/confirmed - Adjusted EPS: $1.13/share in Q2 2026, +0.21 vs. Q2 2025 and +0.13 above the prior estimate. - 1H 2026 adjusted EPS: $2.46, well above year-to-date expectations. - Full-year 2026 outlook: management now expects near or at the top of guidance ($4.50–$4.60). - Q3 2026 adjusted EPS: $1.50/share (company’s estimate). - Key drivers of outperformance: higher usage & customer growth; higher AFUDC from construction; equity method earnings; tax impacts at regulated utilities; plus contributions from Southern Company Gas and smaller businesses (e.g., PowerSecure).

Load growth/data centers are the core “engine” (surprising strength) - Weather-normal retail sales: +2.3% vs. 1H 2025; described as the highest growth through June in ~two decades. - Data center usage: +55% YoY in Q2, and +49% YTD; system-wide data center load now >1.2 GW (+500+ MW YoY). - Company expects this to accelerate as large-load contracted demand (~17 GW by mid-2030s) comes online. - Customer growth cited as significant (e.g., ~11,000 new residential customers added in the quarter; 40,000+ net electric customer adds over last 12 months).

Large-load contracting headline numbers: major new agreements - Alabama Power: three new projects/contracts totaling ~3 GW added in the quarter. - Georgia Power: signed a 25-year electric service contract for ~3.2 GW with OpenAI at a site near Savannah. - Flexible demand response: ~1 GW, expected to support reliability during peak demand. - Service timing: in phases beginning 2028. - Total contracted large-load agreements: >17 GW by mid-2030s, and an additional ~8 GW in late-stage development (including ~3 GW projected to finalize in the near term).