Company: SOJE
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000092122-25-000042
Chunk: 103

Company: SOUTHERN CO
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 1
Chunk 103
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 increase in cost of natural gas as a result of higher gas prices and higher volumes sold compared to 2024, a $14 million increase in depreciation primarily due to continued investments at the natural gas distribution utilities, and a $12 million increase related to expenses passed through to customers primarily related to bad debt and energy efficiency programs.

•Interest expense, net of amounts capitalized increased $4 million primarily due to higher average outstanding borrowings.

Gas Pipeline Investments

The gas pipeline investments segment consists primarily of joint ventures in natural gas pipeline investments including SNG and Dalton Pipeline. See Note (E) to the Condensed Financial Statements under "Southern Company Gas" herein for additional information.

Gas Marketing Services

The gas marketing services segment provides energy-related products and services to natural gas markets and participants in customer choice programs that were approved in various states to increase competition. These programs allow customers to choose their natural gas supplier while the local distribution utility continues to provide distribution and transportation services. Gas marketing services is weather sensitive and uses a variety of hedging strategies, such as weather derivative instruments and other risk management tools, to partially mitigate potential weather impacts.

In the first quarter 2025, net income was flat when compared to the corresponding period in 2024 primarily due to an increase in retail margins, largely offset by a decrease in other income.

All Other

All other includes a renewable natural gas business, AGL Services Company, and Southern Company Gas Capital, as well as various corporate operating expenses that are not allocated to the reportable segments and interest income (expense) associated with affiliate financing arrangements. See Note 15 to the financial statements in Item 8 of the Form 10-K for additional information.

FUTURE EARNINGS POTENTIAL

Each Registrant's results of operations are not necessarily indicative of its future earnings potential. The level of the Registrants' future earnings depends on numerous factors that affect the opportunities, challenges, and risks of the Registrants' primary businesses of selling electricity and/or distributing natural gas, as described further herein. The Registrants are unable to predict changes in law, regulations, regulatory guidance, legal interpretations, policy positions, and implementation actions that may result from the new presidential administration.

For the traditional electric operating companies, these factors include the ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs during a time of increasing costs, including those related to projected long-term demand growth, stringent environmental standards, including CCR rules, safety, system reliability and resiliency, fuel, restoration following major storms,