Company: SOJE
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000092122-25-000084
Chunk: 70

Company: SOUTHERN CO
Filing Date: 2025-10-30
Form: 10-Q
Item: Item 1
Chunk 70
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6 6 6 Effect of convertible senior notes1 — 1 — Effect of forward sale contracts1 — — — Diluted shares1,110 1,103 1,108 1,102 For all periods presented, an immaterial number of stock-based compensation awards was excluded from the diluted EPS calculation because the awards were anti-dilutive.

(G) INCOME TAXES

See Note 10 to the financial statements in Item 8 of the Form 10-K for additional tax information.Current and Deferred Income TaxesAlabama Power, Georgia Power, and Southern Power have 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. During the first nine months of 2025, Alabama Power, Georgia Power, and Southern Power received cash of $80 million, $64 million, and $19 million, respectively, from 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.During the first nine months of 2025, pursuant to certain joint ownership agreements, Georgia Power paid $121 million to the other Vogtle Owners for advanced nuclear PTCs for Plant Vogtle Units 3 and 4. The gain was recognized in 2025 as an income tax benefit and was immaterial.Tax Credit and Net Operating Loss CarryforwardsSouthern Company's federal PTC and ITC carryforwards are expected to be fully utilized by 2031. The utilization of each Registrant's estimated federal and state tax attributes and related valuation allowances could be impacted by numerous factors, including the acquisition of additional renewable energy and battery energy storage projects, changes in taxable income projections, and potential income tax rate changes. See Notes (B) and (K) under "Georgia Power" and "Southern Power," respectively, herein for information regarding current renewable energy and battery energy storage projects.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