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, 2016. 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 electric 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, 2016 and 2015 were as follows:



Pension Plans	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Three Months Ended June 30, 2016
Service cost	$	62		$	15		$	18		$	3		$	3
Interest cost	101			24			34			4			5
Expected return on plan assets	(187		)	(46		)	(65		)	(8		)	(8		)
Amortization:
Prior service costs	3			—			2			1			—
Net (gain)/loss	37			10			13			1			1
Net cost	$	16		$	3		$	2		$	1		$	1
Six Months Ended June 30, 2016
Service cost	$	124		$	29		$	35		$	6		$	6
Interest cost	201			48			68			9			10
Expected return on plan assets	(374		)	(92		)	(129		)	(17		)	(17		)
Amortization:
Prior service costs	7			1			3			1			—
Net (gain)/loss	75			20			27			3			3
Net cost	$	33		$	6		$	4		$	2		$	2
Three Months Ended June 30, 2015
Service cost	$	64		$	15		$	18		$	3		$	3
Interest cost	111			27			39			5			6
Expected return on plan assets	(181		)	(44		)	(63		)	(8		)	(9		)
Amortization:
Prior service costs	7			1			2			—			1
Net (gain)/loss	54			13			19			2			2
Net cost	$	55		$	12		$	15		$	2		$	3
Six Months Ended June 30, 2015
Service cost	$	128		$	30		$	36		$	6		$	6
Interest cost	222			53			77			10			11
Expected return on plan assets	(362		)	(89		)	(126		)	(16		)	(17		)
Amortization:
Prior service costs	13			3			5			—			1
Net (gain)/loss	108			27			38			5			5
Net cost	$	109		$	24		$	30		$	5		$	6



Postretirement Benefits	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Three Months Ended June 30, 2016
Service cost	$	6		$	2		$	1		$	1		$	1
Interest cost	17			4			7			—			1
Expected return on plan assets	(14		)	(7		)	(5		)	(1		)	(1		)
Amortization:
Prior service costs	1			1			1			—			—
Net (gain)/loss	4			1			2			—			—
Net cost	$	14		$	1		$	6		$	—		$	1
Six Months Ended June 30, 2016
Service cost	$	11		$	3		$	3		$	1		$	1
Interest cost	35			9			15			1			2
Expected return on plan assets	(28		)	(13		)	(11		)	(1		)	(1		)
Amortization:
Prior service costs	3			2			1			—			—
Net (gain)/loss	7			1			4			—			—
Net cost	$	28		$	2		$	12		$	1		$	2
Three Months Ended June 30, 2015
Service cost	$	5		$	2		$	1		$	—		$	1
Interest cost	20			5			9			1			1
Expected return on plan assets	(14		)	(7		)	(6		)	(1		)	(1		)
Amortization:
Prior service costs	1			—			—			—			—
Net (gain)/loss	4			1			3			—			—
Net cost	$	16		$	1		$	7		$	—		$	1
Six Months Ended June 30, 2015
Service cost	$	11		$	3		$	3		$	—		$	1
Interest cost	39			10			17			2			2
Expected return on plan assets	(29		)	(13		)	(12		)	(1		)	(1		)
Amortization:
Prior service costs	2			1			—			—			—
Net (gain)/loss	9			1			6			—			—
Net cost	$	32		$	2		$	14		$	1		$	2