Company: SOJE
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000092122-25-000084
Chunk: 420

Company: SOUTHERN CO
Filing Date: 2025-10-30
Form: 10-Q
Item: Item 2
Chunk 420
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 million in higher HLBV loss allocations to tax equity partners and $11 million in lower income allocations to equity partners.

Southern Company Gas

Southern Company Gas uses Heating Degree Days to measure weather and the operational effects on its business. Generally, increased Heating Degree Days results in higher demand for natural gas on Southern Company Gas' distribution system. However, Southern Company Gas has various regulatory mechanisms, such as weather and revenue normalization and straight-fixed-variable rate design, which limits positive or negative impacts to income from exposure to weather changes within typical ranges in each of its utility's respective service territory. Southern Company Gas also utilizes weather hedges to limit the negative income impacts in the event of warmer-than-normal weather in Illinois for gas distribution operations and in Illinois and Georgia for gas marketing services. Therefore, weather typically does not have a significant net income impact.

During the Heating Season, more customers are connected to the gas distribution systems and natural gas usage is higher in periods of colder weather. Southern Company Gas' base operating expenses, excluding cost of natural gas and bad debt expense, are incurred relatively evenly throughout the year. Seasonality also affects the comparison of certain balance sheet items across quarters, including receivables, unbilled revenues, natural gas for sale, and notes payable. However, these items are comparable when reviewing Southern Company Gas' annual results. Thus, Southern Company Gas' operating results for the interim periods presented are not necessarily indicative of annual results and can vary significantly from quarter to quarter as a result of seasonality.

Net Income

Third Quarter 2025 vs. Third Quarter 2024Year-to-Date 2025 vs. Year-to-Date 2024(change in millions)(% change)(change in millions)(% change)$(13)(34.2)$(6)(1.1)

Southern Company Gas' net income in the third quarter 2025 was $25 million compared to $38 million for the corresponding period in 2024. The decrease was primarily due to a $9 million decrease in net income at gas distribution operations, a $5 million increase in net loss at all other, and a $4 million decrease in net income at gas pipeline investments, partially offset by a $5 million increase in net income at gas marketing services.

For year-to-date 2025, net income was $549 million compared to $555 million for the corresponding period in 2024. The decrease was primarily due to a $15 million decrease in net income at gas pipeline investments and a $10 million decrease