ATLANTA, Feb. 21, 2018 /PRNewswire/ -- Southern
Company today reported fourth-quarter 2017 earnings of $496 million, or 49
cents per share, compared with earnings of $197 million, or 20
cents per share, in the fourth quarter of 2016.
Southern Company also reported full-year 2017 earnings of
$842 million, or 84 cents per share, compared with earnings of
$2.45 billion, or $2.57 per share, in 2016.
Excluding the items described in the "Net Income – Excluding
Items" table below, Southern Company earned $509 million, or 51
cents per share, during the fourth quarter of 2017, compared
with $295 million, or 30 cents per share, during the fourth quarter of
2016. For the full-year 2017, excluding these items, Southern
Company earned $3.02 billion, or
$3.02 per share, compared with
earnings of $2.76 billion, or
$2.90 per share, in 2016.
Non-GAAP Financial
Measures
|
Three Months Ended
December
|
|
Year-to-Date
December
|
Net Income -
Excluding Items (in millions)
|
2017
|
2016
|
|
2017
|
2016
|
Net Income - As
Reported
|
$496
|
$197
|
|
$842
|
$2,448
|
Estimated Loss on
Kemper IGCC
|
211
|
206
|
|
3,366
|
428
|
Tax
Impact
|
(25)
|
(79)
|
|
(975)
|
(164)
|
Loss on Plant Scherer
Unit 3
|
-
|
-
|
|
33
|
-
|
Tax
Impact
|
-
|
-
|
|
(13)
|
-
|
Acquisition and
Integration Costs
|
16
|
12
|
|
35
|
120
|
Tax
Impact
|
10
|
(4)
|
|
12
|
(38)
|
Wholesale Gas
Services
|
105
|
(15)
|
|
57
|
4
|
Tax
Impact
|
(20)
|
4
|
|
-
|
(4)
|
Earnings Guidance
Comparability Items:
|
|
|
|
|
|
Equity Return Related
to Kemper IGCC
Schedule Extension
|
-
|
(22)
|
|
(47)
|
(29)
|
Tax
Impact
|
-
|
(4)
|
|
(9)
|
(5)
|
Tax Reform
|
(284)
|
-
|
|
(284)
|
-
|
Net Income –
Excluding Items
|
$509
|
$295
|
|
$3,017
|
$2,760
|
Average Shares Outstanding – (in
millions)
|
1,007
|
986
|
|
1,000
|
951
|
Basic Earnings Per
Share – Excluding Items
|
$0.51
|
$0.30
|
|
$3.02
|
$2.90
|
|
NOTE: For more
information regarding these non-GAAP adjustments, see the footnotes
accompanying the Financial Highlights page of the earnings
package.
|
Earnings for the fourth quarter and full year 2017 were
positively influenced by retail revenue effects and lower
operations and maintenance costs at Southern Company's traditional
electric operating companies, and results from Southern Company
Gas, partially offset by increased share issuances. Full year 2017
earnings were further negatively influenced by milder weather and
lower customer usage.
"2017 was an eventful year for Southern Company, highlighted by
the continued operational excellence of our premier state-regulated
electric and gas utilities," said Chairman, President and CEO
Thomas A. Fanning. "We experienced a
banner year for electric generation, transmission and distribution,
including timely responses to catastrophic weather events in our
service footprint. In addition, during its first full year as a
part of Southern Company, Southern Company Gas continued to deliver
as expected in support of our customer-focused business model."
Fourth quarter 2017 operating revenues were $5.63 billion, compared with $5.18 billion for the fourth quarter of 2016, an
increase of 8.6 percent. Operating revenues for the full year 2017
were $23.03 billion, compared with
$19.90 billion in 2016, a 15.8
percent increase. Southern Company Gas accounted for
$2.27 billion of the increase in
operating revenues for the full year 2017.
Southern Company's fourth quarter earnings slides with
supplemental financial information, including its earnings guidance
for 2018, are available at http://investor.southerncompany.com.
Southern Company's financial analyst call will begin at
1 p.m. Eastern Time today, during
which Fanning and Chief Financial Officer Art P. Beattie will discuss earnings and provide
a general business update. Investors, media and the public may
listen to a live webcast of the call and view associated slides at
http://investor.southerncompany.com/webcasts. A replay of the
webcast will be available on the site for 12 months.
About Southern Company
Southern Company (NYSE: SO) is America's premier energy company,
with 46,000 megawatts of generating capacity and 1,500 billion
cubic feet of combined natural gas consumption and throughput
volume serving 9 million electric and gas utility customers through
its subsidiaries. The company provides clean, safe, reliable and
affordable energy through electric utilities in four states,
natural gas distribution utilities in seven states, a competitive
generation company serving wholesale customers across America and a
nationally recognized provider of customized energy solutions, as
well as fiber optics and wireless communications. Southern Company
brands are known for excellent customer service, high reliability
and affordable prices that are below the national average. Through
an industry-leading commitment to innovation, Southern Company and
its subsidiaries are inventing America's energy future by
developing the full portfolio of energy resources, including
carbon-free nuclear, advanced carbon capture technologies, natural
gas, renewables, energy efficiency and storage
technology. Southern Company has been named by the U.S.
Department of Defense and G.I. Jobs magazine as a top military
employer, recognized among the Top 50 Companies for Diversity by
DiversityInc, listed by Black Enterprise magazine as one of the 40
Best Companies for Diversity and designated a Top Employer for
Hispanics by Hispanic Network. The company has earned a National
Award of Nuclear Science and History from the National Atomic
Museum Foundation for its leadership and commitment to nuclear
development. Visit our website at www.southerncompany.com.
Southern
Company
|
Financial
Highlights
|
(In Millions of
Dollars Except Earnings Per Share)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
|
|
Year-to-Date
December
|
Net Income–As
Reported (See Notes)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Traditional
Electric Operating Companies
|
|
$
|
(191)
|
|
|
$
|
147
|
|
|
$
|
(193)
|
|
|
$
|
2,233
|
|
Southern
Power
|
|
795
|
|
|
23
|
|
|
1,071
|
|
|
338
|
|
Southern Company
Gas1
|
|
(60)
|
|
|
110
|
|
|
243
|
|
|
114
|
|
Total
|
|
544
|
|
|
280
|
|
|
1,121
|
|
|
2,685
|
|
Parent Company
and Other
|
|
(48)
|
|
|
(83)
|
|
|
(279)
|
|
|
(237)
|
|
Net
Income–As Reported
|
|
$
|
496
|
|
|
$
|
197
|
|
|
$
|
842
|
|
|
$
|
2,448
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings
Per Share2
|
|
$
|
0.49
|
|
|
$
|
0.20
|
|
|
$
|
0.84
|
|
|
$
|
2.57
|
|
|
|
|
|
|
|
|
|
|
Average Shares
Outstanding (in millions)
|
|
1,007
|
|
|
986
|
|
|
1,000
|
|
|
951
|
|
End of Period
Shares Outstanding (in millions)
|
|
|
|
|
|
1,008
|
|
|
990
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
Three Months
Ended
December
|
|
Year-to-Date
December
|
Net
Income–Excluding Items (See Notes)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
Net Income–As
Reported
|
|
$
|
496
|
|
|
$
|
197
|
|
|
$
|
842
|
|
|
$
|
2,448
|
|
Estimated Loss on
Kemper IGCC3
|
|
211
|
|
|
206
|
|
|
3,366
|
|
|
428
|
|
Tax Impact
|
|
(25)
|
|
|
(79)
|
|
|
(975)
|
|
|
(164)
|
|
Loss on Plant Scherer
Unit 34
|
|
—
|
|
|
—
|
|
|
33
|
|
|
—
|
|
Tax Impact
|
|
—
|
|
|
—
|
|
|
(13)
|
|
|
—
|
|
Acquisition and
Integration Costs5
|
|
16
|
|
|
12
|
|
|
35
|
|
|
120
|
|
Tax Impact
|
|
10
|
|
|
(4)
|
|
|
12
|
|
|
(38)
|
|
Wholesale Gas
Services6
|
|
105
|
|
|
(15)
|
|
|
57
|
|
|
4
|
|
Tax Impact
|
|
(20)
|
|
|
4
|
|
|
—
|
|
|
(4)
|
|
Earnings Guidance
Comparability Items:
|
|
|
|
|
|
|
|
|
Equity Return Related
to Kemper IGCC
Schedule
Extension7
|
|
—
|
|
|
(22)
|
|
|
(47)
|
|
|
(29)
|
|
Tax Impact
|
|
—
|
|
|
(4)
|
|
|
(9)
|
|
|
(5)
|
|
Tax
Reform8
|
|
(284)
|
|
|
—
|
|
|
(284)
|
|
|
—
|
|
Net
Income–Excluding Items
|
|
$
|
509
|
|
|
$
|
295
|
|
|
$
|
3,017
|
|
|
$
|
2,760
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings
Per Share–Excluding Items
|
|
$
|
0.51
|
|
|
$
|
0.30
|
|
|
$
|
3.02
|
|
|
$
|
2.90
|
|
|
|
|
|
|
|
|
|
|
-See Notes on the
following page.
|
Southern
Company
|
Financial
Highlights
|
Notes
|
|
|
|
|
|
|
|
|
- For comparative
purposes, Net Income - Excluding Items and Basic Earnings Per Share
- Excluding Items in prior year periods do not reflect any
adjustments to exclude (1) Southern Company Gas earnings, net of
acquisition and integration costs and Wholesale Gas Services ($0.10
and $0.15 per share for the three and twelve months ended December
31, 2016, respectively), (2) acquisition debt financing costs
related to the acquisition of Southern Company Gas ($0.04 and $0.11
per share for the three and twelve months ended December 31, 2016,
respectively), and (3) the impact of additional shares of common
stock issued to finance a portion of the purchase price for the 50%
interest in Southern Natural Gas Company, L.L.C. ($0.01 and $0.03
per share for the three and twelve months ended December 31, 2016,
respectively). These items were not contemplated in Southern
Company's February 2016 guidance and, therefore, were previously
excluded in the periods through December 31, 2016.
|
|
(1) On July 1, 2016,
Southern Company completed the acquisition of Southern Company
Gas.
|
|
(2) For the three and
twelve months ended December 31, 2017 and 2016, dilution does not
change basic earnings per share by more than 2 cents and is not
material.
|
|
(3) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
charges related to Mississippi Power Company's integrated coal
gasification combined cycle facility construction project in Kemper
County, Mississippi (Kemper IGCC) which significantly impacted the
presentation of earnings and earnings per share. These charges for
the three and twelve months ended December 31, 2017 include $4
million of related legal expenses, recorded as operations and
maintenance expenses. Additional cancellation costs of
approximately $50 million to $100 million pretax are expected to
occur in future periods.
|
|
(4) Earnings for the
twelve months ended December 31, 2017 include a $32.5 million
write-down ($20 million after tax) of Gulf Power Company's
ownership of Plant Scherer Unit 3 as a result of the retail rate
case settlement approved by the Florida Public Service Commission
on April 4, 2017. Further charges are not expected to
occur.
|
|
(5) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
costs related to the acquisition and integration of Southern
Company Gas and earnings for the three and twelve months ended
December 31, 2017 include costs related to the pending dispositions
of Elizabethtown Gas and Elkton Gas. Further costs are expected to
continue to occur in connection with integration activities and
closing the dispositions; however, the amount and duration of such
expenditures is uncertain.
|
|
(6) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
the Wholesale Gas Services business of Southern Company Gas.
Presenting earnings and earnings per share excluding Wholesale Gas
Services provides investors with an additional measure of operating
performance that excludes the volatility resulting from
mark-to-market and lower of weighted average cost or current market
price accounting adjustments.
|
|
(7) Earnings for the
twelve months ended December 31, 2017 and the three and twelve
months ended December 31, 2016 include additional allowance for
funds used during construction (AFUDC) equity as a result of
extending the schedule for the Kemper IGCC construction project.
AFUDC equity ceased in connection with the project's suspension in
June 2017. Southern Company's 2017 earnings guidance, initially
presented in October 2016, assumed construction would be complete
and AFUDC equity would cease by November 30, 2016. Southern
Company's 2016 earnings guidance, initially presented in February
2016, assumed construction would be complete and AFUDC equity would
cease by August 31, 2016. As a result, Southern Company believes
presentation of earnings per share excluding AFUDC equity
subsequent to August 31, 2016 provides investors with information
comparable to guidance. Management also uses such measures to
evaluate Southern Company's performance.
|
|
(8) Earnings for the
three and twelve months ended December 31, 2017 include the net tax
benefit as a result of federal tax reform legislation, which was
signed into law on December 22, 2017. Southern Company's 2017
earnings guidance, initially presented in October 2016, assumed no
changes to tax laws. As a result, Southern Company believes
presentation of earnings per share excluding this net tax benefit
provides investors with information comparable to guidance.
Management also uses such measures to evaluate Southern Company's
performance. The impact of federal tax reform legislation ($21
million) on the Wholesale Gas Services business of Southern Company
Gas is included in the adjustment above for Wholesale Gas
Services.
|
Southern
Company
|
Significant
Factors Impacting EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
|
|
Year-to-Date
December
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Earnings Per
Share–
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported1 (See Notes)
|
|
$
|
0.49
|
|
|
$
|
0.20
|
|
|
$
|
0.29
|
|
|
$
|
0.84
|
|
|
$
|
2.57
|
|
|
$
|
(1.73)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Factors:
|
|
|
|
|
|
|
|
|
|
|
|
|
Traditional
Electric Operating Companies
|
|
|
|
|
|
$
|
(0.34)
|
|
|
|
|
|
|
$
|
(2.55)
|
|
Southern
Power
|
|
|
|
|
|
0.78
|
|
|
|
|
|
|
0.77
|
|
Southern Company
Gas2
|
|
|
|
|
|
(0.17)
|
|
|
|
|
|
|
0.13
|
|
Parent Company and
Other
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
(0.04)
|
|
Increase in
Shares
|
|
|
|
|
|
(0.01)
|
|
|
|
|
|
|
(0.04)
|
|
Total–As
Reported
|
|
|
|
|
|
$
|
0.29
|
|
|
|
|
|
|
$
|
(1.73)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
|
|
Year-to-Date
December
|
Non-GAAP Financial
Measures
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Earnings Per
Share–
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Items
(See Notes)
|
|
$
|
0.51
|
|
|
$
|
0.30
|
|
|
$
|
0.21
|
|
|
$
|
3.02
|
|
|
$
|
2.90
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total–As
Reported
|
|
|
|
|
|
$
|
0.29
|
|
|
|
|
|
|
$
|
(1.73)
|
|
Kemper IGCC
Impacts3
|
|
|
|
|
|
0.09
|
|
|
|
|
|
|
2.09
|
|
Loss on Plant Scherer
Unit 34
|
|
|
|
|
|
—
|
|
|
|
|
|
|
0.02
|
|
Acquisition and
Integration Costs5
|
|
|
|
|
|
0.02
|
|
|
|
|
|
|
(0.04)
|
|
Wholesale Gas
Services6
|
|
|
|
|
|
0.09
|
|
|
|
|
|
|
0.06
|
|
Tax
Reform7
|
|
|
|
|
|
(0.28)
|
|
|
|
|
|
|
(0.28)
|
|
Total–Excluding Items
|
|
|
|
|
|
$
|
0.21
|
|
|
|
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- See Notes on the
following page.
|
Southern
Company
|
Significant
Factors Impacting EPS
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
- For comparative
purposes, Net Income - Excluding Items and Basic Earnings Per Share
- Excluding Items in prior year periods do not reflect any
adjustments to exclude (1) Southern Company Gas earnings, net of
acquisition and integration costs and Wholesale Gas Services ($0.10
and $0.15 per share for the three and twelve months ended December
31, 2016, respectively), (2) acquisition debt financing costs
related to the acquisition of Southern Company Gas ($0.04 and $0.11
per share for the three and twelve months ended December 31, 2016,
respectively), and (3) the impact of additional shares of common
stock issued to finance a portion of the purchase price for the 50%
interest in Southern Natural Gas Company, L.L.C. ($0.01 and $0.03
per share for the three and twelve months ended December 31, 2016,
respectively). These items were not contemplated in Southern
Company's February 2016 guidance and, therefore, were previously
excluded in the periods through December 31, 2016.
|
|
(1) For the three and
twelve months ended December 31, 2017 and 2016, dilution does not
change basic earnings per share by more than 2 cents and is not
material.
|
|
(2) On July 1, 2016,
Southern Company completed the acquisition of Southern Company
Gas.
|
|
(3) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
charges related to Mississippi Power Company's integrated coal
gasification combined cycle facility construction project in Kemper
County, Mississippi (Kemper IGCC) which significantly impacted the
presentation of earnings and earnings per share. These charges for
the three and twelve months ended December 31, 2017 include $4
million of related legal expenses, recorded as operations and
maintenance expenses. Additional cancellation costs of
approximately $50 million to $100 million pretax are expected to
occur in future periods.
Earnings for the twelve months ended December 31, 2017 and the
three and twelve months ended December 31, 2016 include additional
allowance for funds used during construction (AFUDC) equity as a
result of extending the schedule for the Kemper IGCC construction
project. AFUDC equity ceased in connection with the project's
suspension in June 2017. Southern Company's 2017 earnings guidance,
initially presented in October 2016, assumed construction would be
complete and AFUDC equity would cease by November 30, 2016.
Southern Company's 2016 earnings guidance, initially presented in
February 2016, assumed construction would be complete and AFUDC
equity would cease by August 31, 2016. As a result, Southern
Company believes presentation of earnings per share excluding AFUDC
equity subsequent to August 31, 2016 provides investors with
information comparable to guidance. Management also uses such
measures to evaluate Southern Company's performance.
|
|
(4) Earnings for the
twelve months ended December 31, 2017 include a $32.5 million
write-down ($20 million after tax) of Gulf Power Company's
ownership of Plant Scherer Unit 3 as a result of the retail rate
case settlement approved by the Florida Public Service Commission
on April 4, 2017. Further charges are not expected to
occur.
|
|
(5) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
costs related to the acquisition and integration of Southern
Company Gas and earnings for the three and twelve months ended
December 31, 2017 include costs related to the pending dispositions
of Elizabethtown Gas and Elkton Gas. Further costs are expected to
continue to occur in connection with integration activities and
closing the dispositions; however, the amount and duration of such
expenditures is uncertain.
|
|
(6) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
the Wholesale Gas Services business of Southern Company Gas.
Presenting earnings and earnings per share excluding Wholesale Gas
Services provides investors with an additional measure of operating
performance that excludes the volatility resulting from
mark-to-market and lower of weighted average cost or current market
price accounting adjustments.
|
|
(7) Earnings for the
three and twelve months ended December 31, 2017 include the net tax
benefit as a result of federal tax reform legislation, which was
signed into law on December 22, 2017. Southern Company's 2017
earnings guidance, initially presented in October 2016, assumed no
changes to tax laws. As a result, Southern Company believes
presentation of earnings per share excluding this net tax benefit
provides investors with information comparable to guidance.
Management also uses such measures to evaluate Southern Company's
performance. The impact of federal tax reform legislation ($21
million) on the Wholesale Gas Services business of Southern Company
Gas is included in the adjustment above for Wholesale Gas
Services.
|
Southern
Company
|
EPS Earnings
Analysis
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Three Months
Ended
December
2017 vs. 2016
|
|
Year-to-Date
December
2017 vs. 2016
|
|
|
|
|
|
Retail
Sales
|
|
$
|
0.02
|
|
$
|
(0.04)
|
|
|
|
|
|
Retail Revenue
Impacts
|
|
0.09
|
|
0.32
|
|
|
|
|
|
Weather
|
|
0.04
|
|
(0.18)
|
|
|
|
|
|
Wholesale
Operations
|
|
—
|
|
(0.01)
|
|
|
|
|
|
Other Operating
Revenues
|
|
0.01
|
|
—
|
|
|
|
|
|
Non-Fuel
O&M
|
|
0.04
|
|
0.15
|
|
|
|
|
|
Purchased Power
Capacity Expense
|
|
—
|
|
0.01
|
|
|
|
|
|
Depreciation and
Amortization
|
|
(0.02)
|
|
(0.05)
|
|
|
|
|
|
Taxes Other Than
Income Taxes
|
|
(0.01)
|
|
—
|
|
|
|
|
|
Other Income and
Deductions
|
|
(0.02)
|
|
(0.08)
|
|
|
|
|
|
Income
Taxes
|
|
(0.01)
|
|
(0.03)
|
|
|
|
|
|
Total Traditional
Electric Operating Companies
|
|
$
|
0.14
|
|
$
|
0.09
|
|
|
|
|
|
Southern
Power
|
|
0.04
|
|
—
|
|
|
|
|
|
Southern Company
Gas1
|
|
0.04
|
|
0.31
|
|
|
|
|
|
Parent and
Other
|
|
—
|
|
(0.12)
|
|
|
|
|
|
Increase in
Shares
|
|
(0.01)
|
|
(0.16)
|
|
|
|
|
|
Total Change in
EPS (Excluding Items)
|
|
$
|
0.21
|
|
$
|
0.12
|
|
|
|
|
|
Kemper IGCC
Impacts2
|
|
(0.09)
|
|
(2.09)
|
|
|
|
|
|
Loss on Plant Scherer
Unit 33
|
|
—
|
|
(0.02)
|
|
|
|
|
|
Acquisition and
Integration Costs4
|
|
(0.02)
|
|
0.04
|
|
|
|
|
|
Wholesale Gas
Services5
|
|
(0.09)
|
|
(0.06)
|
|
|
|
|
|
Tax
Reform6
|
|
0.28
|
|
0.28
|
|
|
|
|
|
Total Change in
EPS (As Reported)
|
|
$
|
0.29
|
|
$
|
(1.73)
|
|
|
|
|
|
- See Notes on the
following page.
|
Southern
Company
|
EPS Earnings
Analysis
|
Three and Twelve
Months Ended December 2017 vs. December 2016
|
Notes
|
- For comparative
purposes, Net Income - Excluding Items and Basic Earnings Per Share
- Excluding Items in prior year periods do not reflect any
adjustments to exclude (1) Southern Company Gas earnings, net of
acquisition and integration costs and Wholesale Gas Services ($0.10
and $0.15 per share for the three and twelve months ended December
31, 2016, respectively), (2) acquisition debt financing costs
related to the acquisition of Southern Company Gas ($0.04 and $0.11
per share for the three and twelve months ended December 31, 2016,
respectively), and (3) the impact of additional shares of common
stock issued to finance a portion of the purchase price for the 50%
interest in Southern Natural Gas Company, L.L.C. ($0.01 and $0.03
per share for the three and twelve months ended December 31, 2016,
respectively). These items were not contemplated in Southern
Company's February 2016 guidance and, therefore, were previously
excluded in the periods through December 31, 2016.
|
|
(1) On July 1, 2016,
Southern Company completed the acquisition of Southern Company
Gas.
|
|
(2) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
charges related to Mississippi Power Company's integrated coal
gasification combined cycle facility construction project in Kemper
County, Mississippi (Kemper IGCC) which significantly impacted the
presentation of earnings and earnings per share. These charges for
the three and twelve months ended December 31, 2017 include $4
million of related legal expenses, recorded as operations and
maintenance expenses. Additional cancellation costs of
approximately $50 million to $100 million pretax are expected to
occur in future periods.
Earnings for the twelve months ended December 31, 2017 and the
three and twelve months ended December 31, 2016 include additional
allowance for funds used during construction (AFUDC) equity as a
result of extending the schedule for the Kemper IGCC construction
project. AFUDC equity ceased in connection with the project's
suspension in June 2017. Southern Company's 2017 earnings guidance,
initially presented in October 2016, assumed construction would be
complete and AFUDC equity would cease by November 30, 2016.
Southern Company's 2016 earnings guidance, initially presented in
February 2016, assumed construction would be complete and AFUDC
equity would cease by August 31, 2016. As a result, Southern
Company believes presentation of earnings per share excluding AFUDC
equity subsequent to August 31, 2016 provides investors with
information comparable to guidance. Management also uses such
measures to evaluate Southern Company's performance.
|
|
(3) Earnings for the
twelve months ended December 31, 2017 include a $32.5 million
write-down ($20 million after tax) of Gulf Power Company's
ownership of Plant Scherer Unit 3 as a result of the retail rate
case settlement approved by the Florida Public Service Commission
on April 4, 2017. Further charges are not expected to
occur.
|
|
(4) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
costs related to the acquisition and integration of Southern
Company Gas and earnings for the three and twelve months ended
December 31, 2017 include costs related to the pending dispositions
of Elizabethtown Gas and Elkton Gas. Further costs are expected to
continue to occur in connection with integration activities and
closing the dispositions; however, the amount and duration of such
expenditures is uncertain.
|
|
(5) Earnings for the
three and twelve months ended December 31, 2017 and 2016 include
the Wholesale Gas Services business of Southern Company Gas.
Presenting earnings and earnings per share excluding Wholesale Gas
Services provides investors with an additional measure of operating
performance that excludes the volatility resulting from
mark-to-market and lower of weighted average cost or current market
price accounting adjustments.
|
|
(6) Earnings for the
three and twelve months ended December 31, 2017 include the net tax
benefit as a result of federal tax reform legislation, which was
signed into law on December 22, 2017. Southern Company's 2017
earnings guidance, initially presented in October 2016, assumed no
changes to tax laws. As a result, Southern Company believes
presentation of earnings per share excluding this net tax benefit
provides investors with information comparable to guidance.
Management also uses such measures to evaluate Southern Company's
performance. The impact of federal tax reform legislation ($21
million) on the Wholesale Gas Services business of Southern Company
Gas is included in the adjustment above for Wholesale Gas
Services.
|
Southern
Company
|
Consolidated
Earnings
|
As
Reported
|
(In Millions of
Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
December
|
|
Year-to-Date
December
|
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
Income
Account-
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Electric
Revenues-
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel
|
|
$
|
966
|
|
|
$
|
952
|
|
|
$
|
14
|
|
|
$
|
4,095
|
|
|
$
|
4,121
|
|
|
$
|
(26)
|
|
Non-Fuel
|
|
2,578
|
|
|
2,350
|
|
|
228
|
|
|
11,235
|
|
|
11,113
|
|
|
122
|
|
Wholesale Electric
Revenues
|
|
559
|
|
|
471
|
|
|
88
|
|
|
2,426
|
|
|
1,926
|
|
|
500
|
|
Other Electric
Revenues
|
|
171
|
|
|
169
|
|
|
2
|
|
|
681
|
|
|
698
|
|
|
(17)
|
|
Natural Gas
Revenues
|
|
1,045
|
|
|
1,078
|
|
|
(33)
|
|
|
3,791
|
|
|
1,596
|
|
|
2,195
|
|
Other
Revenues
|
|
310
|
|
|
161
|
|
|
149
|
|
|
803
|
|
|
442
|
|
|
361
|
|
Total
Revenues
|
|
5,629
|
|
|
5,181
|
|
|
448
|
|
|
23,031
|
|
|
19,896
|
|
|
3,135
|
|
Fuel and Purchased
Power
|
|
1,245
|
|
|
1,196
|
|
|
49
|
|
|
5,263
|
|
|
5,111
|
|
|
152
|
|
Cost of Natural
Gas
|
|
515
|
|
|
480
|
|
|
35
|
|
|
1,601
|
|
|
613
|
|
|
988
|
|
Cost of Other
Sales
|
|
220
|
|
|
99
|
|
|
121
|
|
|
513
|
|
|
260
|
|
|
253
|
|
Non-Fuel O &
M
|
|
1,565
|
|
|
1,624
|
|
|
(59)
|
|
|
5,481
|
|
|
5,240
|
|
|
241
|
|
Depreciation and
Amortization
|
|
774
|
|
|
697
|
|
|
77
|
|
|
3,010
|
|
|
2,502
|
|
|
508
|
|
Taxes Other Than
Income Taxes
|
|
309
|
|
|
292
|
|
|
17
|
|
|
1,250
|
|
|
1,113
|
|
|
137
|
|
Estimated Loss on
Kemper IGCC
|
|
207
|
|
|
206
|
|
|
1
|
|
|
3,362
|
|
|
428
|
|
|
2,934
|
|
Total Operating
Expenses
|
|
4,835
|
|
|
4,594
|
|
|
241
|
|
|
20,480
|
|
|
15,267
|
|
|
5,213
|
|
Operating
Income
|
|
794
|
|
|
587
|
|
|
207
|
|
|
2,551
|
|
|
4,629
|
|
|
(2,078)
|
|
Allowance for Equity
Funds Used During
Construction
|
|
27
|
|
|
52
|
|
|
(25)
|
|
|
160
|
|
|
202
|
|
|
(42)
|
|
Earnings from Equity
Method Investments
|
|
6
|
|
|
31
|
|
|
(25)
|
|
|
106
|
|
|
59
|
|
|
47
|
|
Interest Expense, Net
of Amounts Capitalized
|
|
446
|
|
|
404
|
|
|
42
|
|
|
1,694
|
|
|
1,317
|
|
|
377
|
|
Other Income
(Expense), net
|
|
(56)
|
|
|
(27)
|
|
|
(29)
|
|
|
(55)
|
|
|
(93)
|
|
|
38
|
|
Income
Taxes
|
|
(175)
|
|
|
34
|
|
|
(209)
|
|
|
142
|
|
|
951
|
|
|
(809)
|
|
Net
Income
|
|
500
|
|
|
205
|
|
|
295
|
|
|
926
|
|
|
2,529
|
|
|
(1,603)
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends on
Preferred and Preference
Stock of Subsidiaries
|
|
6
|
|
|
11
|
|
|
(5)
|
|
|
38
|
|
|
45
|
|
|
(7)
|
|
Net Income
Attributable to Noncontrolling
Interests
|
|
(2)
|
|
|
(3)
|
|
|
1
|
|
|
46
|
|
|
36
|
|
|
10
|
|
NET INCOME
ATTRIBUTABLE TO
SOUTHERN COMPANY
|
|
$
|
496
|
|
|
$
|
197
|
|
|
$
|
299
|
|
|
$
|
842
|
|
|
$
|
2,448
|
|
|
$
|
(1,606)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Certain prior year
data may have been reclassified to conform with current year
presentation.
|
|
Southern
Company
|
|
Kilowatt-Hour
Sales and Customers
|
|
(In Millions of
KWHs)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December
|
|
Year-to-Date
December
|
|
As
Reported
|
|
2017
|
|
2016
|
|
Change
|
|
Weather
Adjusted
Change
|
|
2017
|
|
2016
|
|
Change
|
|
Weather
Adjusted
Change
|
|
Kilowatt-Hour
Sales-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Sales
|
|
49,915
|
|
|
45,162
|
|
|
10.5
|
%
|
|
|
|
205,541
|
|
|
197,788
|
|
|
3.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Retail
Sales-
|
|
37,705
|
|
|
36,209
|
|
|
4.1
|
%
|
|
1.4
|
%
|
|
156,507
|
|
|
160,745
|
|
|
(2.6)
|
%
|
|
(0.4)
|
%
|
|
Residential
|
|
12,034
|
|
|
11,080
|
|
|
8.6
|
%
|
|
0.8
|
%
|
|
50,536
|
|
|
53,337
|
|
|
(5.3)
|
%
|
|
(0.3)
|
%
|
|
Commercial
|
|
12,333
|
|
|
12,224
|
|
|
0.9
|
%
|
|
(0.1)
|
%
|
|
52,340
|
|
|
53,733
|
|
|
(2.6)
|
%
|
|
(0.9)
|
%
|
|
Industrial
|
|
13,130
|
|
|
12,690
|
|
|
3.5
|
%
|
|
3.5
|
%
|
|
52,785
|
|
|
52,792
|
|
|
—
|
%
|
|
—
|
%
|
|
Other
|
|
208
|
|
|
215
|
|
|
(2.9)
|
%
|
|
(3.1)
|
%
|
|
846
|
|
|
883
|
|
|
(4.0)
|
%
|
|
(3.9)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Wholesale
Sales
|
|
12,210
|
|
|
8,953
|
|
|
36.4
|
%
|
|
N/A
|
|
49,034
|
|
|
37,043
|
|
|
32.4
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands
of Customers)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended
December
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Change
|
|
|
|
Regulated Utility
Customers-
|
|
|
|
|
|
|
|
|
|
Total Utility
Customers-
|
|
|
|
|
|
9,263
|
|
|
9,179
|
|
|
0.9
|
%
|
|
|
|
Total Traditional
Electric
|
|
|
|
|
|
4,640
|
|
|
4,593
|
|
|
1.0
|
%
|
|
|
|
Southern Company
Gas
|
|
|
|
|
|
4,623
|
|
|
4,586
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southern
Company
|
Financial
Overview
|
As
Reported
|
(In Millions of
Dollars)
|
|
|
|
Three Months
Ended
December
|
|
Year-to-Date
December
|
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
Southern Company
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
5,629
|
|
|
$
|
5,181
|
|
|
8.6
|
%
|
|
$
|
23,031
|
|
|
$
|
19,896
|
|
|
15.8
|
%
|
Earnings Before
Income Taxes
|
|
325
|
|
|
239
|
|
|
36.0
|
%
|
|
1,068
|
|
|
3,480
|
|
|
(69.3)
|
%
|
Net Income Available
to Common
|
|
496
|
|
|
197
|
|
|
151.8
|
%
|
|
842
|
|
|
2,448
|
|
|
(65.6)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alabama Power
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
1,433
|
|
|
$
|
1,329
|
|
|
7.8
|
%
|
|
$
|
6,039
|
|
|
$
|
5,889
|
|
|
2.5
|
%
|
Earnings Before
Income Taxes
|
|
198
|
|
|
174
|
|
|
13.8
|
%
|
|
1,434
|
|
|
1,370
|
|
|
4.7
|
%
|
Net Income Available
to Common
|
|
119
|
|
|
102
|
|
|
16.7
|
%
|
|
848
|
|
|
822
|
|
|
3.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Georgia Power
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
1,884
|
|
|
$
|
1,762
|
|
|
6.9
|
%
|
|
$
|
8,310
|
|
|
$
|
8,383
|
|
|
(0.9)
|
%
|
Earnings Before
Income Taxes
|
|
352
|
|
|
163
|
|
|
116.0
|
%
|
|
2,258
|
|
|
2,127
|
|
|
6.2
|
%
|
Net Income Available
to Common
|
|
227
|
|
|
113
|
|
|
100.9
|
%
|
|
1,414
|
|
|
1,330
|
|
|
6.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gulf Power
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
372
|
|
|
$
|
349
|
|
|
6.6
|
%
|
|
$
|
1,516
|
|
|
$
|
1,485
|
|
|
2.1
|
%
|
Earnings Before
Income Taxes
|
|
30
|
|
|
42
|
|
|
(28.6)
|
%
|
|
229
|
|
|
231
|
|
|
(0.9)
|
%
|
Net Income Available
to Common
|
|
19
|
|
|
23
|
|
|
(17.4)
|
%
|
|
135
|
|
|
131
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mississippi Power
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
271
|
|
|
$
|
277
|
|
|
(2.2)
|
%
|
|
$
|
1,187
|
|
|
$
|
1,163
|
|
|
2.1
|
%
|
Earnings (Loss)
Before Income Taxes
|
|
(202)
|
|
|
(162)
|
|
|
24.7
|
%
|
|
(3,120)
|
|
|
(152)
|
|
|
N/M
|
|
Net Income (Loss)
Available to Common
|
|
(556)
|
|
|
(89)
|
|
|
N/M
|
|
|
(2,590)
|
|
|
(50)
|
|
|
N/M
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southern Power
–
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
478
|
|
|
$
|
389
|
|
|
22.9
|
%
|
|
$
|
2,075
|
|
|
$
|
1,577
|
|
|
31.6
|
%
|
Earnings (Loss)
Before Income Taxes
|
|
(17)
|
|
|
(8)
|
|
|
112.5
|
%
|
|
178
|
|
|
179
|
|
|
(0.6)
|
%
|
Net Income Available
to Common
|
|
795
|
|
|
23
|
|
|
N/M
|
|
|
1,071
|
|
|
338
|
|
|
216.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southern Company
Gas1 –
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
1,079
|
|
|
$
|
1,109
|
|
|
(2.7)
|
%
|
|
$
|
3,920
|
|
|
$
|
1,652
|
|
|
137.3
|
%
|
Earnings Before
Income Taxes
|
|
74
|
|
|
178
|
|
|
(58.4)
|
%
|
|
610
|
|
|
190
|
|
|
221.1
|
%
|
Net Income (Loss)
Available to Common
|
|
(60)
|
|
|
110
|
|
|
(154.5)
|
%
|
|
243
|
|
|
114
|
|
|
113.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M - not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- See Financial
Highlights pages for discussion of certain significant items
occurring during the periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) On July 1, 2016,
Southern Company completed the acquisition of Southern Company Gas.
Year-to-Date December 2016 reflects financial results for Southern
Company Gas for the period July 1, 2016 through December 31,
2016.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/southern-company-reports-fourth-quarter-and-full-year-2017-earnings-300601728.html
SOURCE Southern Company