Dear Fellow Shareholders,

At Southern Company, Our Values are essential to our sustained success. Safety First. Unquestionable Trust. Superior Performance. Total Commitment. These values guide our behavior and ensure that we put the needs of those we serve at the center of all we do. Good Energy is a tangible manifestation of those guiding values.

Our Values and Good Energy are serving us well, as this is an eventful time for Southern Company. As this annual report goes to press, progress on Vogtle Unit 3, the first of two new nuclear units currently under construction at Georgia Power’s Plant Vogtle, is entering its final stages. This is a historic accomplishment that represents the culmination of years of hard work and planning.

In January of this year, my successor as president and CEO of Southern Company was announced. I am pleased to share that Chris Womack, my long-time colleague and good friend, will succeed me as president of Southern Company on March 31. Chris will then assume the role of CEO at the conclusion of our annual meeting of shareholders on May 24. I will continue to serve Southern Company as executive chairman of the board of directors.

The leadership, vision and integrity Chris has demonstrated throughout his career have uniquely prepared him to guide Southern Company into a new era. With the progress at Plant Vogtle and our continued work towards net zero emissions, the rest of the board of directors and I believe now is an ideal time to transition to new leadership. I look forward to working closely with Chris over the next few months as he assumes his new role, and to focusing on an effective transition to my new position as executive chairman of the board of directors.

Southern Company experienced another exceptional year in 2022. We reported strong adjusted* earnings for 2022 of $3.60 per share, 19 cents higher than 2021. We are encouraged that the economies within our Southeast service territories remain strong, including robust residential customer growth and economic activity.

Excel at the Fundamentals

We take great pride in the resilience of our systems, and our ability to reliably provide for the energy needs of customers, even under challenging circumstances. In 2022, our operations team, generation fleet and power delivery system performed exceedingly well. This included meeting an all-time peak load of over 41,000 megawatts in June and a winter peak of nearly 38,000 megawatts as frigid temperatures over the Christmas weekend resulted in a record December demand for electricity in our service footprint.

Our keen focus on operational excellence and business fundamentals has resulted in a variety of industry awards and recognition. J.D. Power ranked Georgia Power number one in business customer satisfaction for large utilities in the South. Nicor Gas was honored with the Midwest Energy Efficiency Alliance Award for outstanding service to customers in need. Cogent Reports named Alabama Power, Georgia Power and Mississippi Power among the most trusted business partners in the utility industry.

Achieve Success with Major Construction Projects

Last year saw significant progress at Plant Vogtle units 3 and 4. All 157 fuel assemblies were loaded to the Unit 3 reactor core in October, and the site team has turned to the testing and start-up process. Cold hydro testing for Unit 4 was completed in December and hot functional testing began this March. Component and system testing activities are steadily increasing in support of eventual fuel load at Unit 4.

Once completed, these units are expected to be reliable sources of carbon-free energy for the next 60-80 years. Moreover, once these two new units are in service and operating alongside the two existing units, Plant Vogtle will be the largest producer of carbon-free energy in the United States.

Support the Building of a National Energy Policy

We believe good public policy can be a driving force to create jobs and generate personal income that will help improve the lives of individuals and families throughout the nation. We continue to be proactively engaged in public policy dialogue and ongoing interaction with legislators and regulators to support a national energy policy that places a premium on innovation, advocating for policies that benefit both our evolving business as well as the customers we serve.

Promote Energy Innovation

Southern Company and TerraPower completed the installation of an Integrated Effects Test in Everett, WA. This was a landmark achievement in the development of the Molten Chloride Fast Reactor–a promising Generation-IV nuclear technology.

Georgia Power worked with Mitsubishi and EPRI to successfully blend hydrogen fuel with natural gas at Plant McDonough- Atkinson, paving the way for additional research on the potential long-term uses of hydrogen in conjunction with existing infrastructure for clean energy production. Southern Company joined with other Southeastern utilities to establish a coalition to pursue federal funding to develop a regional hydrogen hub in the Southeast.

Southern Company was a founding member of the Southeastern Energy Exchange Market (SEEM). SEEM facilitates sub-hourly, bilateral trading of energy and allows for the sale and purchase of power closer to the time it is consumed, lowering costs for customers and optimizing renewable energy resources.

Value and Develop Our People

Our commitment to employees is reflected in numerous accolades. We were the top-rated utility in Military Times’ Best for Vets Employers, and we were recently named the number one utility in Forbes’ 2023 ranking of America’s Best Large Employers, nearly 100 spots above our closest industry peer.

For the seventh consecutive year, we have been recognized as one of the Top 50 Companies for Diversity by DiversityInc. Some 81% of system employees participated in diversity, equity and inclusion development in 2022. Across the enterprise, employee resource groups, councils and networks bring employees together to cultivate inclusion and a healthy work environment.

I am proud of the remarkable growth and accomplishment Southern Company has experienced during my time as CEO. I take little personal credit, however, as I have been privileged to work alongside exceptional leaders and thousands of employees who make smart decisions every day.

As Chris Womack takes the reins as president and CEO later this year, I have never been more enthusiastic about the future. And even as a new generation of leaders emerges and we move boldly forward with new innovations, we remain committed to the ideals that have characterized our company for more than 100 years. The original vision and purpose of our founder, James Mitchell, is not forgotten. Customers remain at the center of all we do, and our mission continues to be bigger than our bottom line.

It has been my privilege to serve this great company and its shareholders. Thank you for your continued confidence in Southern Company.

Sincerely,

Thomas A. Fanning
March 27, 2023

*   Not a financial measure under generally accepted accounting principles. See Reconciliation of Non-GAAP Financial Metric on page 21 for additional information and specific adjustments made to this measure by year.