Company: SOJE
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000092122-25-000076
Chunk: 317

Company: SOUTHERN CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 8
Chunk 317
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, as described further below:

•Operating revenues increased $136 million primarily due to higher gas cost recovery and base rate increases. Gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas.

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    Table of Contents                                Index to Financial StatementsMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS (Continued)

•Operating expenses increased $125 million primarily due to a $96 million 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 additional plant in service related to continued investments at the natural gas distribution utilities, and an $8 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 $6 million primarily due to higher average outstanding borrowings.

For year-to-date 2025, net income increased $24 million, or 6.3%, when compared to the corresponding period in 2024, as described further below:

•Operating revenues increased $242 million primarily due to higher gas cost recovery and base rate increases. Gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas.

•Operating expenses increased $218 million primarily due to a $145 million increase in cost of natural gas as a result of higher gas prices and higher volumes sold compared to 2024, a $28 million increase in depreciation primarily due to additional plant in service related to continued investments at the natural gas distribution utilities, and a $20 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 $10 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.

In the second quarter and year-to-date 2025, net income decreased $7 million and $11 million, respectively, when compared to the corresponding periods in 2024. The decreases were primarily due to lower rates at SNG.

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