Company: SOJE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000092122-25-000018
Chunk: 2387

Company: SOUTHERN CO
Filing Date: 2025-02-20
Form: 10-K
Item: Item 2
Chunk 2387
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 to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 

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Postretirement Benefits Plan – Fair Value of Investments Measured at Net Asset Value

As discussed in Note 5 to the consolidated financial statements, the fair value of postretirement benefits plan assets on December 31, 2024, was $71 million. Of this amount, $70 million represents the fair value of investments measured at net asset value (NAV).

We identified the assessment of the postretirement benefits plan fair value of investments measured at NAV as a critical audit matter. Subjective auditor judgment was required in the application and performance of procedures to assess the fair value of the investments measured at NAV because the determination involved the use of unobservable inputs. Additionally, specialized skills and knowledge were required to assess the fair value of the investments measured at NAV and to assess the sufficiency of audit evidence obtained. 

The primary procedures we performed to address this critical audit matter included:

•Comparing the fair values as recorded by the Company to external confirmations received directly from the third-party investment managers.

•Utilizing specialists who performed a benchmark analysis to determine the correlation of the funds and the stated benchmark; the results were used to estimate the high and low fair value range of the investments to compare to the Company's fair value.

Emphasis of Matter – Significant Transactions with Related Parties

As discussed in Note 6 to the consolidated financial statements, the Company has entered into significant transactions with related parties.

/s/ BDO USA, P.C.

We have served as the Company's auditor since 2018.

Houston, Texas

February 6, 2025

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CONSOLIDATED STATEMENTS OF INCOME

For the Years Ended December 31, 2024, 2023, and 2022

Southern Company Gas and Subsidiary Companies

202420232022(in millions)Operating Revenues:Natural gas revenues (includes revenue taxes of   $115, $133, and $162, respectively