Retirement Benefits

9 Months Ended

Sep. 30, 2019

The Southern Company system has a qualified defined benefit, trusteed, pension plan covering substantially all employees, with the exception of employees at PowerSecure. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2019. The Southern Company system also provides certain non-qualified defined benefits for a select group of management and highly compensated employees, which are funded on a cash basis. In addition, the Southern Company system provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional electric operating companies fund other postretirement trusts to the extent required by their respective regulatory commissions. Southern Company Gas has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses.

See Note 11 to the financial statements in Item 8 of the Form 10-K for additional information.

On each registrant's condensed statements of income, the service cost component of net periodic benefit costs is included in other operations and maintenance expenses and all other components of net periodic benefit costs are included in other income (expense), net. Components of the net periodic benefit costs for the three and nine months ended September 30, 2019 and 2018 are presented in the following tables.



Three Months Ended September 30, 2019	Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Pension Plans
Service cost	$	73		$	17		$	19		$	3		$	2		$	7
Interest cost	123			28			38			6			1			9
Expected return on plan assets	(222		)	(51		)	(73		)	(10		)	(2		)	(15		)
Amortization:
Prior service costs	1			—			—			—			—			(1		)
Regulatory asset	—			—			—			—			—			3
Net (gain)/loss	30			9			11			1			—			1
Net periodic pension cost (income)	$	5		$	3		$	(5	)	$	—		$	1		$	4
Postretirement Benefits
Service cost	$	5		$	1		$	2		$	1		$	—		$	—
Interest cost	18			4			6			—			—			2
Expected return on plan assets	(16		)	(6		)	(7		)	—			—			(1		)
Amortization:
Prior service costs	—			1			—			—			—			—
Regulatory asset	—			—			—			—			—			1
Net (gain)/loss	(1		)	—			1			—			—			—
Net periodic postretirement benefit cost	$	6		$	—		$	2		$	1		$	—		$	2



Nine Months Ended September 30, 2019	Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Pension Plans
Service cost	$	219		$	51		$	56		$	9		$	5		$	19
Interest cost	369			85			116			17			4			27
Expected return on plan assets	(664		)	(154		)	(219		)	(30		)	(7		)	(45		)
Amortization:
Prior service costs	2			1			1			—			—			(2		)
Regulatory asset	—			—			—			—			—			10
Net (gain)/loss	90			27			33			4			—			2
Net periodic pension cost (income)	$	16		$	10		$	(13	)	$	—		$	2		$	11
Postretirement Benefits
Service cost	$	14		$	3		$	4		$	1		$	—		$	1
Interest cost	52			12			19			2			—			7
Expected return on plan assets	(49		)	(19		)	(19		)	(1		)	—			(4		)
Amortization:
Prior service costs	2			3			—			—			—			—
Regulatory asset	—			—			—			—			—			4
Net (gain)/loss	(2		)	—			1			—			—			(2		)
Net periodic postretirement benefit cost	$	17		$	(1	)	$	5		$	2		$	—		$	6



Three Months Ended September 30, 2018	Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Pension Plans
Service cost	$	90		$	19		$	22		$	5		$	3		$	8
Interest cost	116			26			34			5			1			10
Expected return on plan assets	(236		)	(51		)	(74		)	(11		)	(3		)	(18		)
Amortization:
Prior service costs	1			—			1			—			—			(1		)
Regulatory asset	—			—			—			—			—			4
Net (gain)/loss	53			13			18			3			—			3
Net periodic pension cost (income)	$	24		$	7		$	1		$	2		$	1		$	6
Postretirement Benefits
Service cost	$	6		$	1		$	2		$	—		$	1		$	—
Interest cost	19			5			7			—			—			2
Expected return on plan assets	(17		)	(7		)	(6		)	—			—			(1		)
Amortization:
Prior service costs	2			1			—			—			—			—
Regulatory asset	—			—			—			—			—			2
Net (gain)/loss	3			—			2			—			—			—
Net periodic postretirement benefit cost	$	13		$	—		$	5		$	—		$	1		$	3



Nine Months Ended September 30, 2018	Southern Company			Alabama Power			Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Pension Plans
Service cost	$	269		$	58		$	65		$	13		$	7		$	24
Interest cost	348			76			104			15			4			29
Expected return on plan assets	(707		)	(155		)	(222		)	(31		)	(8		)	(53		)
Amortization:
Prior service costs	3			1			2			—			—			(2		)
Regulatory asset	—			—			—			—			—			11
Net (gain)/loss	160			40			52			8			1			9
Net periodic pension cost (income)	$	73		$	20		$	1		$	5		$	4		$	18
Postretirement Benefits
Service cost	$	18		$	4		$	5		$	1		$	1		$	1
Interest cost	56			13			21			2			—			7
Expected return on plan assets	(51		)	(20		)	(19		)	(1		)	—			(5		)
Amortization:
Prior service costs	5			3			1			—			—			—
Regulatory asset	—			—			—			—			—			5
Net (gain)/loss	10			1			6			—			—			—
Net periodic postretirement benefit cost	$	38		$	1		$	14		$	2		$	1		$	8