Second Quarter 2026 Financial Statement

‌CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

SOUTHERN NATURAL GAS COMPANY, L.L.C.

As of June 30, 2026 and December 31, 2025 and

For the Three and Six Months Ended June 30, 2026 and 2025

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

1. ‌General

   We are a Delaware limited liability company, originally formed in 1935 as a corporation. When we refer to "us," "we," "our," "the Company," or "SNG," we are describing Southern Natural Gas Company, L.L.C and its consolidated subsidiary.

   The Members' interests in us are as follows:

   • 50.0% - Kinder Morgan SNG Operator, LLC, an indirect subsidiary of Kinder Morgan, Inc.; and

   • 50.0% - Evergreen Enterprise Holdings, LLC, an indirect subsidiary of The Southern Company.

     Our operations are regulated by the Federal Energy Regulatory Commission (FERC) under the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978 and the Energy Policy Act of 2005. The FERC approves tariffs that establish rates, cost recovery mechanisms and other terms and conditions of service to our customers.

     Our primary business consists of the interstate transportation and storage of natural gas. Our natural gas pipeline system consists of approximately 6,830 miles of pipeline with a design capacity of approximately 4.4 billion cubic feet (Bcf) per day for natural gas. This pipeline system extends from supply basins in Louisiana, Mississippi, and Alabama to market areas in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, and Tennessee, including the metropolitan areas of Atlanta and Birmingham. We also own and operate 100% of the Muldon storage facility in Monroe County, Mississippi and own a 50% interest in Bear Creek Storage Company, L.L.C. (Bear Creek) in Bienville Parish, Louisiana. Bear Creek is a joint venture equally owned by us and Tennessee Gas Pipeline Company, L.L.C., an affiliate. Our interest in Bear Creek and the Muldon storage facility provide a combined working natural gas storage capacity of approximately 66 Bcf and peak withdrawal capacity of approximately 1.2 Bcf per day.

     Basis of Presentation

     General

     We have prepared our accompanying unaudited consolidated financial statements in accordance with accounting principles contained in the Financial Accounting Standards Board's (FASB) Accounting Standards Codification, the single source of United States Generally Accepted Accounting Principles.

     Our accompanying unaudited consolidated financial statements reflect normal adjustments that are, in the opinion of our management, necessary for a fair presentation of our financial results for the interim periods and certain amounts from prior periods have been reclassified to conform to the current presentation. All material intercompany transactions and balances have been eliminated. Interim results are not necessarily indicative of results for a full year; accordingly, you should read these unaudited consolidated financial statements in conjunction with our audited consolidated financial statements and related notes for the year ended December 31, 2025.

     Management has evaluated subsequent events through August 14, 2026, the date these financial statements were available to be issued.

2. ‌Debt

   The following table summarizes the net carrying value of our outstanding unsecured debt:

   June 30, December 31, 2026 2025 (In millions)

   7.35% Notes due February 2031	$ 153	$ 153
   8.00% Notes due March 2032	258	258
   5.45% Senior Notes due August 2035	300	300
   4.80% Senior Notes due March 2047	500	500
   	1,211	1,211
   Less: Unamortized premium, net and debt issuance costs	(2)	(1)
   Total long-term debt	$ 1,213	$ 1,212

   Our notes are redeemable in whole or in part, at our option at any time, at a price equal to 100% of the principal amount of the notes plus accrued interest to the redemption date plus a make-whole premium.

   Credit Facility and Debt Covenants

   As of June 30, 2026, we had no borrowings outstanding under our $75 million unsecured credit facility due May 2030. For the six months ended June 30, 2026 and 2025, we were in compliance with our debt-related covenants.

   Fair Value of Financial Instruments

   The carrying value and estimated fair value of our outstanding debt balances are disclosed below:

   June 30, 2026 December 31, 2025 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (In millions)

   Total debt $ 1,213 $ 1,189 $ 1,212 $ 1,216

   We used Level 2 input values to measure the estimated fair value of our outstanding debt balance as of both June 30, 2026 and December 31, 2025.

3. ‌Related Party Transactions

   Affiliate Balances and Activities

   The following table summarizes our balance sheet affiliate balances not presented separately on our accompanying Consolidated Balance Sheets:

   June 30, December 31, 2026 2025 (In millions)

   Natural gas imbalance receivable(a)	$ - $	2
   Natural gas imbalance payable(b)	1	-

   1. Included in "Other current assets" on our accompanying Consolidated Balance Sheets.

   2. Included in "Other current liabilities" on our accompanying Consolidated Balance Sheets.

   The following table shows revenues and costs from our affiliates:

   Three Months Ended June 30, Six Months Ended June 30,

   	2026	2025	2026	2025
   (In millions)
   Revenues	$ 56	$ 54	$ 117	$ 108
   Operations and maintenance	26	25	57	52
   General and administrative and other costs	8	9	16	16
   Capitalized costs	3	4	5	7

   Subsequent Events

   Subsequent to June 30, 2026 and through the issuance of this report, we made a cash distribution to and received a cash contribution from our Members totaling $46 million and $43 million, respectively.

4. ‌Revenue Recognition

   Disaggregation of Revenues

   The following table presents our revenues disaggregated by revenue source and type of revenue for each revenue source:

   Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In millions)

   Revenues from contracts with customers

Services

Revenue Allocated to Remaining Performance Obligations

The following table presents the estimated revenue related to unsatisfied performance obligations representing fixed consideration primarily attributable to service contracts with take-or-pay fees that we expect to recognize in future periods:

Estimated revenue as of June 30, 2026 $ 294 $ 554 $ 1,705

Based on the practical expedients we elected to apply, the amounts presented in the table above exclude remaining performance obligations for variable consideration related to contracts with index-based pricing or variable volume attributes in which such variable consideration is allocated entirely to a wholly unsatisfied performance obligation.

1. ‌Litigation, Environmental, Regulatory, and Commitments

   Legal Proceedings

   We are party to various legal, regulatory and other matters arising from the day-to-day operations of our businesses or certain predecessor operations that may result in claims against the Company. Although no assurance can be given, we believe,

   based on our experiences to date and taking into account accrued liabilities and insurance, that the ultimate resolution of such items will not have a material adverse impact to our financial position, cash flows, or operating results. We believe we have numerous and substantial defenses to the matters to which we are a party and intend to vigorously defend the Company. When we determine a loss is probable of occurring and is reasonably estimable, we accrue an undiscounted liability for such contingencies based on our best estimate using information available at that time. If the estimated loss is a range of potential outcomes and there is no better estimate within the range, we accrue the amount at the low end of the range. We disclose contingencies where an adverse outcome may be material or, in the judgment of management, we conclude the matter should otherwise be disclosed.

   Environmental Matters

   We are subject to environmental cleanup and enforcement actions from time to time. In particular, the Comprehensive Environmental Response, Compensation and Liability Act generally imposes joint and several liability for cleanup and enforcement costs on current and predecessor owners and operators of a site, among others, without regard to fault or the legality of the original conduct, subject to the right of a liable party to establish a "reasonable basis" for apportionment of costs. Our operations are also subject to federal, state, and local laws and regulations relating to protection of the environment. Although we believe our operations are in substantial compliance with applicable environmental laws and regulations, risks of additional costs and liabilities are inherent in our operations, and there can be no assurance that we will not incur significant costs and liabilities. Moreover, it is possible that other developments could result in substantial costs and liabilities to us, such as increasingly stringent environmental laws, regulations, and enforcement policies under the terms of authority of those laws, and claims for damages to property or persons resulting from our operations. Although it is not possible to predict the ultimate outcomes, we believe that the resolution of the environmental matters set forth in this note, and other matters to which we and our subsidiary are a party, will not have a material adverse effect on our financial position, cash flows, or operating results.

   Regulatory Matters

   South System Expansion 4 Project (SSE4)

   Following the participation in the FERC pre-filing review process for the SSE4, we filed on June 30, 2025, an application with the FERC requesting authority to construct and operate the SSE4 project, which is designed to increase SNG's South Mainline capacity by approximately 1.3 Bcf per day. SSE4 will be completed in two phases and is almost entirely comprised of brownfield looping and horsepower compression additions on the SNG and our affiliate's Elba Express pipeline systems. Our portion of the estimated project cost is approximately $3,333 million and we expect to place the first phase of the project in service in the fourth quarter of 2028 and the second phase in the fourth quarter of 2029.

   On November 5, 2025, we were informed that the Federal Permitting Improvement Steering Committee, established by Title 41 of the Fixing America's Surface Transportation Act (FAST-41), has added the SSE4 to the FAST-41 program, which aims to streamline federal reviews for large infrastructure projects. The FERC will lead the federal permitting for the SSE4 Project under FAST-41. A permitting timetable for the SSE4 Project was posted to the FAST-41 dashboard in January 2026 and is updated periodically. Consistent with the posted permitting timetable, the FERC issued the final Environmental Impact Statement on June 26, 2026. The FERC order approving the project was issued on July 31, 2026. Construction may commence as early as October 2026, pending receipt of the remaining federal permits.

   Commitments

   As of June 30, 2026, we had capital commitments of approximately $436 million. We have other planned capital and investment projects that are discretionary in nature, with no substantial contractual capital commitments made in advance of the actual expenditures.

2. ‌Recent Accounting Pronouncements Accounting Standards Updates (ASU) ASU No. 2024-03

On November 4, 2024, the FASB issued ASU No. 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)." This ASU improves financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This ASU will be effective for annual periods beginning after December 15, 2026, for interim reporting periods beginning after December 15, 2027, and early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

ASU No. 2025-06

On September 18, 2025, the FASB issued ASU No. 2025-06, "Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software." This ASU modernizes the accounting guidance for the costs to develop software for internal use by removing outdated stage-based cost capitalization rules and replacing them with a probability-based cost-capitalization framework that aligns better with current software development methods. This ASU will be effective for annual periods beginning after December 15, 2027, for interim reporting periods beginning within those annual periods, and early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's financial statements.

ASU No. 2026-02

On May 19, 2026, the FASB issued ASU No. 2026-02, "Environmental Credits and Environmental Credit Obligations (Topic 818)." This ASU establishes guidance on the recognition, measurement, presentation, and disclosure of environmental credits and compliance obligations that may be settled by using environmental credits. US GAAP did not previously address how to account for these items. The ASU will be effective for annual periods beginning after December 15, 2027, for interim reporting periods beginning within those annual periods, and early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's financial statements.