RETIREMENT BENEFITS

Southern Company has a defined benefit, trusteed, pension plan covering substantially all employees. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2014. Southern Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, Southern Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional operating companies fund related other postretirement trusts to the extent required by their respective regulatory commissions.

See Note 2 to the financial statements of Southern Company, Alabama Power, Georgia Power, Gulf Power, and Mississippi Power in Item 8 of the Form 10-K for additional information.

Components of the net periodic benefit costs for the three and six months ended June 30, 2014 and 2013 were as follows:



Pension Plans	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Three Months Ended June 30, 2014
Service cost	$	54		$	12		$	15		$	1		$	2
Interest cost	108			26			38			5			5
Expected return on plan assets	(162		)	(42		)	(56		)	(7		)	(7		)
Amortization:
Prior service costs	7			2			2			1			1
Net (gain)/loss	27			8			10			1			1
Net cost	$	34		$	6		$	9		$	1		$	2
Six Months Ended June 30, 2014
Service cost	$	107		$	24		$	31		$	4		$	5
Interest cost	217			52			76			10			10
Expected return on plan assets	(323		)	(84		)	(113		)	(14		)	(14		)
Amortization:
Prior service costs	13			3			5			1			1
Net (gain)/loss	55			16			20			2			2
Net cost	$	69		$	11		$	19		$	3		$	4
Three Months Ended June 30, 2013
Service cost	$	58		$	14		$	18		$	2		$	2
Interest cost	97			23			35			5			4
Expected return on plan assets	(150		)	(39		)	(53		)	(7		)	(6		)
Amortization:
Prior service costs	6			1			2			1			—
Net (gain)/loss	50			13			18			2			3
Net cost	$	61		$	12		$	20		$	3		$	3
Six Months Ended June 30, 2013
Service cost	$	116		$	27		$	35		$	5		$	5
Interest cost	194			46			69			9			9
Expected return on plan assets	(301		)	(78		)	(106		)	(13		)	(13		)
Amortization:
Prior service costs	13			3			5			1			—
Net (gain)/loss	100			26			37			4			5
Net cost	$	122		$	24		$	40		$	6		$	6



Postretirement Benefits	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Three Months Ended June 30, 2014
Service cost	$	6		$	2		$	1		$	1		$	1
Interest cost	20			5			9			1			1
Expected return on plan assets	(15		)	(7		)	(7		)	(1		)	(1		)
Amortization:
Prior service costs	1			1			—			—			—
Net (gain)/loss	—			—			1			—			—
Net cost	$	12		$	1		$	4		$	1		$	1
Six Months Ended June 30, 2014
Service cost	$	11		$	3		$	3		$	1		$	1
Interest cost	40			10			17			2			2
Expected return on plan assets	(30		)	(13		)	(13		)	(1		)	(1		)
Amortization:
Prior service costs	2			2			—			—			—
Net (gain)/loss	1			—			1			—			—
Net cost	$	24		$	2		$	8		$	2		$	2
Three Months Ended June 30, 2013
Service cost	$	6		$	1		$	1		$	1		$	1
Interest cost	18			4			8			—			1
Expected return on plan assets	(14		)	(6		)	(6		)	—			(1		)
Amortization:
Transition obligation	1			—			1			—			—
Prior service costs	1			1			—			—			—
Net (gain)/loss	3			1			2			—			—
Net cost	$	15		$	1		$	6		$	1		$	1
Six Months Ended June 30, 2013
Service cost	$	12		$	3		$	3		$	1		$	1
Interest cost	37			9			16			1			2
Expected return on plan assets	(28		)	(12		)	(12		)	—			(1		)
Amortization:
Transition obligation	2			—			2			—			—
Prior service costs	2			2			—			—			—
Net (gain)/loss	6			1			4			—			—
Net cost	$	31		$	3		$	13		$	2		$	2