Company: SOJE
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000092122-25-000042
Chunk: 47

Company: SOUTHERN CO
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 1
Chunk 47
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.Current and Deferred Income TaxesIn 2024, Alabama Power, Georgia Power, and Southern Power entered into agreements with non-affiliated parties to transfer ITCs and PTCs at a discount to the generated credit value in 2024, 2025, and 2026. In the first quarter 2025, Alabama Power, Georgia Power, and Southern Power received cash of $44 million, $23 million, and $2 million, respectively, from 2024 credits transferred. The discount is recorded as a reduction in tax credits recognized in the financial statements and does not have a material impact on results of operations. The Southern Company system continues to explore the ability to efficiently monetize its tax credits through third-party transfer agreements.Effective Tax RateSouthern Company's effective tax rate is typically lower than the statutory rate due to employee stock plans' dividend deduction, non-taxable AFUDC equity at the traditional electric operating companies, flowback of excess deferred income taxes at the regulated utilities, and federal income tax benefits from ITCs and PTCs.Details of significant changes in the effective tax rate for the applicable Registrants are provided herein.Southern CompanySouthern Company's effective tax rate was 18.1% for the three months ended March 31, 2025 compared to 17.2% for the corresponding period in 2024. The effective tax rate increase was primarily due to a decrease in the flowback of certain excess deferred income taxes at Alabama Power, partially offset by an increase in the generation of advanced nuclear PTCs at Georgia Power and the flowback of excess state deferred income taxes at Georgia Power.

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    Table of Contents                                Index to Financial StatementsNOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)(UNAUDITED)

Alabama PowerAlabama Power's effective tax rate was 22.8% for the three months ended March 31, 2025 compared to 20.4% for the corresponding period in 2024. The effective tax rate increase was primarily due to a decrease in the flowback of certain excess deferred income taxes.Georgia PowerGeorgia Power's effective tax rate was 14.2% for the three months ended March 31, 2025 compared to 15.3% for the corresponding period in 2024. The effective tax rate decrease was primarily due to an increase in the generation of advanced nuclear PTCs and the flowback of excess state deferred income taxes.Mississippi PowerMississippi