GEORGIA POWER COGPJA
GEORGIA POWER CO Leases Disclosure
LEASES
Lessee
The Registrants recognize leases with a term of greater than 12 months on the balance sheet as lease obligations, representing the discounted future fixed payments due, along with ROU assets that will be amortized over the term of each lease.
As lessee, the Registrants lease certain electric generating units (including renewable energy facilities), real estate/land, communication towers, railcars, and other equipment and vehicles. The major categories of lease obligations are as follows:
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| (in millions) | ||||||||||||||||||||
| At December 31, 2025 | ||||||||||||||||||||
Electric generating units(*) | $ | 1,064 | $ | 53 | $ | 1,793 | $ | — | $ | — | $ | — | ||||||||
| Real estate/land | 931 | 3 | 37 | 1 | 541 | 111 | ||||||||||||||
| Communication towers | 134 | 3 | 5 | — | — | 20 | ||||||||||||||
| Railcars | 74 | 39 | 26 | 9 | — | — | ||||||||||||||
| Other | 49 | 6 | 3 | 19 | — | — | ||||||||||||||
| Total | $ | 2,252 | $ | 104 | $ | 1,864 | $ | 29 | $ | 541 | $ | 131 | ||||||||
| At December 31, 2024 | ||||||||||||||||||||
Electric generating units(*) | $ | 672 | $ | 56 | $ | 1,509 | $ | — | $ | — | $ | — | ||||||||
| Real estate/land | 834 | 3 | 45 | 2 | 540 | 20 | ||||||||||||||
| Communication towers | 118 | 2 | 4 | — | — | 21 | ||||||||||||||
| Railcars | 64 | 31 | 29 | 4 | — | — | ||||||||||||||
| Other | 52 | 2 | 2 | 16 | — | — | ||||||||||||||
| Total | $ | 1,740 | $ | 94 | $ | 1,589 | $ | 22 | $ | 540 | $ | 41 | ||||||||
(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.
Real estate/land leases primarily consist of commercial real estate leases at Southern Company, Georgia Power, and Southern Company Gas and various land leases primarily associated with renewable energy facilities at Southern Power. The commercial
real estate leases have remaining terms of up to 18 years while the land leases have remaining terms of up to 41 years, including renewal periods.
Communication towers are leased for the installation of equipment to provide cellular phone service to customers and to support the automated meter infrastructure programs at the traditional electric operating companies and Nicor Gas. Communication tower leases have remaining terms of up to 15 years.
Renewal options exist in many of the leases. The expected term used in calculating the lease obligation generally reflects only the noncancelable period of the lease unless it is considered reasonably certain that the lease will be extended. Land leases associated with renewable energy facilities at Southern Power and communication tower leases for automated meter infrastructure at Nicor Gas include renewal periods reasonably certain of exercise resulting in an expected lease term at least equal to the expected life of the renewable energy facilities and the automated meter infrastructure, respectively.
Contracts that Contain a Lease
While not specifically structured as a lease, some of the PPAs at Alabama Power and Georgia Power are deemed to represent a lease of the underlying electric generating units when the terms of the PPA convey the right to control the use of the underlying assets. Amounts recorded for leases of electric generating units are generally based on the amount of scheduled capacity payments due over the remaining term of the PPA, which varies between and 22 years. Georgia Power has several PPAs with Southern Power that Georgia Power accounts for as leases with a lease obligation of $782 million and $893 million at December 31, 2025 and 2024, respectively. The amount paid for energy under these affiliate PPAs reflects a price that would be paid in an arm's-length transaction as reviewed and approved by both the Georgia PSC and the FERC. Amounts related to the affiliate PPAs are eliminated in consolidation for Southern Company.
Short-term Leases
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Registrants generally recognize lease expense for these leases on a straight-line basis over the lease term.
Residual Value Guarantees
Residual value guarantees existed primarily in railcar leases at Alabama Power and Georgia Power. The remaining railcar leases containing residual value guarantees expired in 2023 for Alabama Power and in June 2024 for Georgia Power. The amounts probable of being paid under those guarantees were included in the lease payments, and all such amounts were immaterial at December 31, 2024.
Lease and Nonlease Components
For all asset categories, with the exception of electric generating units, gas pipelines, and real estate leases, the Registrants combine lease payments and any nonlease components, such as asset maintenance, for purposes of calculating the lease obligation and the ROU asset.
Balance sheet amounts recorded for operating and finance leases were as follows:
Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| (in millions) | ||||||||||||||||||||
| At December 31, 2025 | ||||||||||||||||||||
| Operating Leases | ||||||||||||||||||||
| $ | 1,358 | $ | 86 | $ | 1,120 | $ | 9 | $ | 479 | $ | 85 | |||||||||
| $ | 197 | $ | 14 | $ | 170 | $ | 4 | $ | 31 | $ | 8 | |||||||||
| 1,287 | 78 | 960 | 6 | 510 | 123 | |||||||||||||||
Total operating lease obligations(*) | $ | 1,484 | $ | 92 | $ | 1,130 | $ | 10 | $ | 541 | $ | 131 | ||||||||
| Finance Leases | ||||||||||||||||||||
| $ | 742 | $ | 12 | $ | 710 | $ | 18 | $ | — | $ | — | |||||||||
| $ | 16 | $ | 3 | $ | 29 | $ | 1 | $ | — | $ | — | |||||||||
| 752 | 9 | 705 | 18 | — | — | |||||||||||||||
| Total finance lease obligations | $ | 768 | $ | 12 | $ | 734 | $ | 19 | $ | — | $ | — | ||||||||
| At December 31, 2024 | ||||||||||||||||||||
| Operating Leases | ||||||||||||||||||||
| $ | 1,386 | $ | 84 | $ | 1,331 | $ | 8 | $ | 484 | $ | 38 | |||||||||
| $ | 200 | $ | 14 | $ | 169 | $ | 4 | $ | 29 | $ | 11 | |||||||||
| 1,253 | 76 | 1,159 | 4 | 511 | 30 | |||||||||||||||
Total operating lease obligations(*) | $ | 1,453 | $ | 90 | $ | 1,328 | $ | 8 | $ | 540 | $ | 41 | ||||||||
| Finance Leases | ||||||||||||||||||||
| $ | 254 | $ | 4 | $ | 227 | $ | 14 | $ | — | $ | — | |||||||||
| $ | 9 | $ | 1 | $ | 20 | $ | 1 | $ | — | $ | — | |||||||||
| 278 | 3 | 241 | 13 | — | — | |||||||||||||||
| Total finance lease obligations | $ | 287 | $ | 4 | $ | 261 | $ | 14 | $ | — | $ | — | ||||||||
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $486 million, $53 million, and $1.1 billion, respectively, at December 31, 2025 and $567 million, $55 million, and $1.3 billion, respectively, at December 31, 2024.
If not presented separately on the Registrants' balance sheets, amounts related to leases are presented as follows: operating lease ROU assets, net are included in "other deferred charges and assets"; operating lease obligations are included in "other current liabilities" and "other deferred credits and liabilities," as applicable; finance lease ROU assets, net are included in "plant in service"; and finance lease obligations are included in "securities due within one year" and "long-term debt," as applicable.
Lease costs for 2025, 2024, and 2023, which includes both amounts recognized as operations and maintenance expense and amounts capitalized as part of the cost of another asset, were as follows:
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| (in millions) | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
| Lease cost | ||||||||||||||||||||
Operating lease cost(*) | $ | 271 | $ | 19 | $ | 248 | $ | 5 | $ | 34 | $ | 21 | ||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of ROU assets | 13 | 1 | 22 | 1 | — | — | ||||||||||||||
| Interest on lease obligations | 11 | — | 12 | — | — | — | ||||||||||||||
| Total finance lease cost | 24 | 1 | 34 | 1 | — | — | ||||||||||||||
| Short-term lease costs | 45 | 22 | 15 | — | — | — | ||||||||||||||
| Variable lease cost | 52 | — | 79 | — | 6 | — | ||||||||||||||
| Total lease cost | $ | 392 | $ | 42 | $ | 376 | $ | 6 | $ | 40 | $ | 21 | ||||||||
| 2024 | ||||||||||||||||||||
| Lease cost | ||||||||||||||||||||
Operating lease cost(*) | $ | 248 | $ | 19 | $ | 190 | $ | 4 | $ | 27 | $ | 12 | ||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of ROU assets | 20 | 2 | 23 | 1 | — | — | ||||||||||||||
| Interest on lease obligations | 15 | — | 15 | 1 | — | — | ||||||||||||||
| Total finance lease cost | 35 | 2 | 38 | 2 | — | — | ||||||||||||||
| Short-term lease costs | 37 | 15 | 15 | — | — | — | ||||||||||||||
| Variable lease cost | 48 | (1) | 77 | — | 4 | — | ||||||||||||||
| Total lease cost | $ | 368 | $ | 35 | $ | 320 | $ | 6 | $ | 31 | $ | 12 | ||||||||
| 2023 | ||||||||||||||||||||
| Lease cost | ||||||||||||||||||||
Operating lease cost(*) | $ | 252 | $ | 16 | $ | 192 | $ | 5 | $ | 34 | $ | 12 | ||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of ROU assets | 24 | 2 | 19 | 1 | — | — | ||||||||||||||
| Interest on lease obligations | 14 | — | 17 | — | — | — | ||||||||||||||
| Total finance lease cost | 38 | 2 | 36 | 1 | — | — | ||||||||||||||
| Short-term lease costs | 40 | 16 | 16 | — | — | — | ||||||||||||||
| Variable lease cost | 47 | — | 74 | — | 4 | — | ||||||||||||||
| Total lease cost | $ | 377 | $ | 34 | $ | 318 | $ | 6 | $ | 38 | $ | 12 | ||||||||
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $113 million, $5 million, and $222 million, respectively, in 2025, $108 million, $5 million, and $168 million, respectively, in 2024, and $112 million, $4 million, and $174 million, respectively, in 2023.
Georgia Power has variable lease payments that are based on the amount of energy produced by certain renewable generating facilities subject to PPAs, including $49 million, $45 million, and $42 million in 2025, 2024, and 2023, respectively, from finance leases which are included in purchased power on Georgia Power's statements of income, of which $23 million, $22 million, and $21 million was included in purchased power, affiliates in 2025, 2024, and 2023, respectively.
Other information with respect to cash and noncash activities related to leases, as well as weighted-average lease terms and discount rates, is as follows:
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| (in millions) | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
| Other information | ||||||||||||||||||||
| Cash paid for amounts included in the measurements of lease obligations: | ||||||||||||||||||||
| Operating cash flows from operating leases | $ | 270 | $ | 19 | $ | 257 | $ | 4 | $ | 33 | $ | 13 | ||||||||
| Operating cash flows from finance leases | 11 | — | 17 | — | — | — | ||||||||||||||
| Financing cash flows from finance leases | 21 | 2 | 32 | 1 | — | — | ||||||||||||||
| ROU assets obtained under operating leases | 168 | 16 | 18 | 6 | 2 | 61 | ||||||||||||||
| ROU assets obtained under finance leases | 509 | 10 | 513 | 6 | — | — | ||||||||||||||
| 2024 | ||||||||||||||||||||
| Other information | ||||||||||||||||||||
| Cash paid for amounts included in the measurements of lease obligations: | ||||||||||||||||||||
| Operating cash flows from operating leases | $ | 243 | $ | 19 | $ | 186 | $ | 4 | $ | 33 | $ | 12 | ||||||||
| Operating cash flows from finance leases | 15 | — | 21 | — | — | — | ||||||||||||||
| Financing cash flows from finance leases | 11 | 2 | 23 | 1 | — | — | ||||||||||||||
| ROU assets obtained under operating leases | 146 | 11 | 609 | — | 10 | 1 | ||||||||||||||
| Reassessment of ROU assets under operating leases | (7) | — | — | — | (7) | — | ||||||||||||||
| ROU assets obtained under finance leases | 1 | — | 44 | — | — | — | ||||||||||||||
| 2023 | ||||||||||||||||||||
| Other information | ||||||||||||||||||||
| Cash paid for amounts included in the measurements of lease obligations: | ||||||||||||||||||||
| Operating cash flows from operating leases | $ | 253 | $ | 17 | $ | 199 | $ | 5 | $ | 33 | $ | 12 | ||||||||
| Operating cash flows from finance leases | 15 | — | 22 | — | — | — | ||||||||||||||
| Financing cash flows from finance leases | 18 | 2 | 16 | 1 | — | — | ||||||||||||||
| ROU assets obtained under operating leases | 100 | 30 | 26 | 1 | 7 | 7 | ||||||||||||||
| ROU assets obtained under finance leases | 3 | 3 | 18 | — | — | — | ||||||||||||||
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| At December 31, 2025 | ||||||||||||||||||||
| Weighted-average remaining lease term in years: | ||||||||||||||||||||
| Operating leases | 16.0 | 9.7 | 7.0 | 4.6 | 31.4 | 10.9 | ||||||||||||||
| Finance leases | 19.8 | 3.4 | 18.1 | 10.1 | N/A | N/A | ||||||||||||||
| Weighted-average discount rate: | ||||||||||||||||||||
| Operating leases | 4.88 | % | 5.07 | % | 4.82 | % | 4.58 | % | 4.96 | % | 5.30 | % | ||||||||
| Finance leases | 5.38 | % | 4.38 | % | 5.68 | % | 3.78 | % | N/A | N/A | ||||||||||
| At December 31, 2024 | ||||||||||||||||||||
| Weighted-average remaining lease term in years: | ||||||||||||||||||||
| Operating leases | 16.4 | 10.2 | 7.9 | 4.3 | 32.3 | 6.8 | ||||||||||||||
| Finance leases | 16.0 | 2.7 | 10.1 | 10.9 | N/A | N/A | ||||||||||||||
| Weighted-average discount rate: | ||||||||||||||||||||
| Operating leases | 4.73 | % | 5.04 | % | 4.73 | % | 3.83 | % | 4.88 | % | 3.84 | % | ||||||||
| Finance leases | 4.86 | % | 4.05 | % | 5.8 | % | 2.74 | % | N/A | N/A | ||||||||||
Maturities of lease liabilities are as follows:
| At December 31, 2025 | ||||||||||||||||||||
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| (in millions) | ||||||||||||||||||||
| Maturity Analysis | ||||||||||||||||||||
| Operating leases: | ||||||||||||||||||||
| 2026 | $ | 233 | $ | 18 | $ | 221 | $ | 4 | $ | 33 | $ | 9 | ||||||||
| 2027 | 217 | 15 | 218 | 2 | 29 | 15 | ||||||||||||||
| 2028 | 202 | 11 | 216 | 2 | 30 | 16 | ||||||||||||||
| 2029 | 168 | 9 | 195 | 1 | 30 | 15 | ||||||||||||||
| 2030 | 118 | 9 | 111 | 1 | 30 | 16 | ||||||||||||||
| Thereafter | 1,294 | 56 | 378 | 1 | 954 | 110 | ||||||||||||||
| Total | 2,232 | 118 | 1,339 | 11 | 1,106 | 181 | ||||||||||||||
| Less: Present value discount | 748 | 26 | 209 | 1 | 565 | 50 | ||||||||||||||
| Operating lease obligations | $ | 1,484 | $ | 92 | $ | 1,130 | $ | 10 | $ | 541 | $ | 131 | ||||||||
| Finance leases: | ||||||||||||||||||||
| 2026 | $ | 33 | $ | 3 | $ | 47 | $ | 2 | $ | — | $ | — | ||||||||
| 2027 | 32 | 2 | 47 | 2 | — | — | ||||||||||||||
| 2028 | 44 | 2 | 59 | 2 | — | — | ||||||||||||||
| 2029 | 65 | 1 | 82 | 2 | — | — | ||||||||||||||
| 2030 | 67 | 1 | 63 | 2 | — | — | ||||||||||||||
| Thereafter | 1,130 | 6 | 985 | 14 | — | — | ||||||||||||||
| Total | 1,371 | 15 | 1,283 | 24 | — | — | ||||||||||||||
| Less: Present value discount | 603 | 3 | 549 | 5 | — | — | ||||||||||||||
| Finance lease obligations | $ | 768 | $ | 12 | $ | 734 | $ | 19 | $ | — | $ | — | ||||||||
Payments made under PPAs at Georgia Power for energy generated from certain renewable energy facilities accounted for as operating and finance leases are considered variable lease costs and are therefore not reflected in the above maturity analysis.
At December 31, 2025, Georgia Power has one affiliate PPA with Southern Power that has not yet commenced and will be accounted for as a lease. The PPA has a term of 10 years and is expected to commence in 2028. The estimated total obligation associated with this PPA is $63 million.
Lessor
The Registrants are each considered lessors in various arrangements that have been determined to contain a lease due to the customer's ability to control the use of the underlying asset owned by the applicable Registrant. For the traditional electric operating companies, these arrangements consist of outdoor lighting contracts accounted for as operating leases with initial terms of up to 10 years, after which the contracts renew on a month-to-month basis at the customer's option. For Alabama Power and Georgia Power, these arrangements also include PPAs related to electric generating units accounted for as operating leases with remaining terms of one year and up to 14 years, respectively. For Mississippi Power, these arrangements also include a tolling arrangement related to an electric generating unit accounted for as a sales-type lease with a remaining term of 13 years. For Southern Power, these arrangements consist of PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 21 years and PPAs related to battery energy storage facilities accounted for as sales-type leases with remaining terms of up to 16 years. Southern Company Gas is the lessor in operating leases related to gas pipelines with remaining terms of up to 17 years. For Southern Company, these arrangements also include PPAs related to fuel cells accounted for as operating leases with remaining terms of up to eight years.
Lease income for 2025, 2024, and 2023 was as follows:
| Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | |||||||||||||||
| (in millions) | ||||||||||||||||||||
| 2025 | ||||||||||||||||||||
| Lease income - interest income on sales-type leases | $ | 23 | $ | — | $ | — | $ | 14 | $ | 9 | $ | — | ||||||||
| Lease income - operating leases | 145 | 7 | 29 | 3 | 148 | 36 | ||||||||||||||
| Variable lease income | 408 | 1 | — | — | 442 | — | ||||||||||||||
| Total lease income | $ | 576 | $ | 8 | $ | 29 | $ | 17 | $ | 599 | $ | 36 | ||||||||
| 2024 | ||||||||||||||||||||
| Lease income - interest income on sales-type leases | $ | 24 | $ | — | $ | — | $ | 15 | $ | 9 | $ | — | ||||||||
| Lease income - operating leases | 136 | 9 | 28 | 3 | 88 | 36 | ||||||||||||||
| Variable lease income | 417 | 1 | — | — | 450 | — | ||||||||||||||
| Total lease income | $ | 577 | $ | 10 | $ | 28 | $ | 18 | $ | 547 | $ | 36 | ||||||||
| 2023 | ||||||||||||||||||||
| Lease income - interest income on sales-type leases | $ | 24 | $ | — | $ | — | $ | 14 | $ | 10 | $ | — | ||||||||
| Lease income - operating leases | 164 | 35 | 29 | 2 | 85 | 37 | ||||||||||||||
| Variable lease income | 406 | 1 | — | — | 437 | — | ||||||||||||||
| Total lease income | $ | 594 | $ | 36 | $ | 29 | $ | 16 | $ | 532 | $ | 37 | ||||||||
As part of its acquisition of the Lindsay Hill Generating Station, Alabama Power assumed an existing power sales agreement under which the full output of the generating facility remains committed to a non-affiliated third party through April 2027. These revenues are included above as lease income from operating leases. See Note 15 under "Alabama Power" for additional information.
Lease payments received under tolling arrangements and PPAs consist of either scheduled payments or variable payments based on the amount of energy produced by the underlying electric generating units. Lease income related to PPAs is included in wholesale revenues for Alabama Power, Georgia Power, and Southern Power. Scheduled payments to be received under outdoor lighting contracts' initial terms, tolling arrangements, and PPAs accounted for as leases are presented in the following maturity analyses.
The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:
| At December 31, 2025 | |||||||||||
Southern Company | Mississippi Power | Southern Power | |||||||||
| (in millions) | |||||||||||
| 2026 | $ | 39 | $ | 23 | $ | 15 | |||||
| 2027 | 38 | 22 | 15 | ||||||||
| 2028 | 37 | 21 | 15 | ||||||||
| 2029 | 36 | 20 | 15 | ||||||||
| 2030 | 34 | 19 | 15 | ||||||||
| Thereafter | 270 | 114 | 155 | ||||||||
| Total undiscounted cash flows | $ | 454 | $ | 219 | $ | 230 | |||||
Net investment in sales-type lease(*) | 286 | 130 | 152 | ||||||||
| Difference between undiscounted cash flows and discounted cash flows | $ | 168 | $ | 89 | $ | 78 | |||||
(*)For Mississippi Power, included in other current assets ($10 million and $10 million at December 31, 2025 and 2024, respectively) and other property and investments ($120 million and $129 million at December 31, 2025 and 2024, respectively) on the balance sheets. For Southern Power, included in other current assets ($15 million and $15 million at December 31, 2025 and 2024, respectively) and net investment in sales-type leases ($137 million and $143 million at December 31, 2025 and 2024, respectively) on the balance sheets.
The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases are as follows:
| At December 31, 2025 | ||||||||||||||
| Southern Company | Alabama Power | Southern Power | Southern Company Gas | |||||||||||
| (in millions) | ||||||||||||||
| 2026 | $ | 119 | $ | 6 | $ | 148 | $ | 35 | ||||||
| 2027 | 111 | 5 | 150 | 28 | ||||||||||
| 2028 | 111 | 4 | 161 | 28 | ||||||||||
| 2029 | 116 | 4 | 164 | 28 | ||||||||||
| 2030 | 115 | 3 | 103 | 28 | ||||||||||
| Thereafter | 554 | 34 | 400 | 299 | ||||||||||
| Total | $ | 1,126 | $ | 56 | $ | 1,126 | $ | 446 | ||||||
Southern Power receives payments for renewable energy under PPAs accounted for as operating leases that are considered contingent rents and are therefore not reflected in the table above. Alabama Power and Southern Power allocate revenue to the nonlease components of PPAs based on the stand-alone selling price of capacity and energy. The undiscounted cash flows to be received under contracts accounted for as operating leases at Georgia Power and Mississippi Power are immaterial.
Southern Company Leveraged Lease
At December 31, 2025, a subsidiary of Southern Holdings had one leveraged lease agreement, which relates to energy generation, with an expected remaining term of six years. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt, related to this investment. Southern Company wrote off the related investment balance in 2020 following an evaluation of the recoverability of the lease receivable and the expected residual value of the generation assets at the end of the lease.
In June 2022, the Southern Holdings subsidiary operating the generating plant for the lessee provided notice to the lessee to terminate the related operating and maintenance agreement effective June 30, 2023. Subsequently, the lessee failed to make the semi-annual lease payment due in December 2022. As a result, the Southern Holdings subsidiary was unable to make its corresponding payment to the holders of the underlying non-recourse debt related to the generation assets. The parties to the lease entered into forbearance agreements which suspended the related contractual rights of the parties while they continued restructuring negotiations, during which the termination date for the operating and maintenance agreement was delayed until July 31, 2023. The negotiations were completed in July 2023, resulting in the Southern Holdings subsidiary agreeing to continue operating the plant for the lessee until the lessee's associated power off-take agreement ends in 2032, subject to certain terms and conditions. The restructuring had no material impact on Southern Company's financial statements. Southern Company will
continue to monitor the operational performance of the underlying assets and evaluate the ability of the lessee to continue to meet its obligations, including those associated with a future closure or retirement of the generation assets and associated properties, including the dry ash landfill.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.