SO · 8-K · 20260730PR000056

Operating Expense and Margin Drivers

SOUTHERN CO · 2026-07-30 · Importance 38 · Surprise 14 · In source text

Second-quarter operating expenses declined $8 million year over year to $5.201 billion, despite depreciation and amortization increasing $111 million to $1.434 billion. Non-fuel operations and maintenance expense increased $20 million to $1.705 billion, while fuel and purchased-power expense declined $34 million and natural-gas cost declined $78 million. Six-month depreciation and amortization increased $246 million to $2.854 billion, while total operating expenses increased $606 million to $11.580 billion. Second-quarter operating income increased $12 million to $1.776 billion, supported by $48 million of higher allowance for equity funds used during construction and $76 million of higher equity-method investment earnings.

Key facts

• Total operating expenses for the three months ended June 30, 2026 were $5,201 million compared with $5,209 million for the three months ended June 30, 2025. source
• Depreciation and amortization expense was $1,434 million for the three months ended June 30, 2026 and $2,854 million year-to-date June 30, 2026. source
• Non-fuel operations and maintenance expense was $1,705 million for the three months ended June 30, 2026 and $3,359 million year-to-date June 30, 2026. source
• Interest expense, net of amounts capitalized, was $796 million for the three months ended June 30, 2026 and $1,573 million year-to-date June 30, 2026. source
• Fuel and purchased power expense was $1,342 million for the three months ended June 30, 2026 and $3,076 million year-to-date June 30, 2026. source
• Southern Company reported operating income of $1,776 million for the three months ended June 30, 2026 and $3,794 million year-to-date June 30, 2026. source
• Earnings for the three and six months ended June 30, 2026 include an estimated loss of $8 million and $10 million, respectively, at Southern Company Gas related to costs associated with Nicor Gas capital investments disallowed by the Illinois Commerce Commission in November 2025. source
• Earnings for the three and six months ended June 30, 2026 include a state income tax refund of $9 million at Southern Company Gas associated with the 2018 disposition of Elizabethtown Gas, partially offset by contingency fee expenses of $2 million. source

Impact estimates