ATLANTA, May 2, 2018 /PRNewswire/ -- Southern Company
today reported first-quarter 2018 earnings of $938 million, or 93
cents per share, compared with earnings of $658 million, or 66
cents per share, in the first quarter of 2017.
Excluding the items described in the "Net Income – Excluding
Items" table below, Southern Company earned $893 million, or 88
cents per share, during the first quarter of 2018, compared
with $652 million, or 66 cents per share, during the first quarter of
2017.
Non-GAAP Financial
Measures
|
|
|
|
Three Months Ended
March
|
Net Income -
Excluding Items (in millions)
|
|
|
|
2018
|
2017
|
Net Income - As
Reported
|
|
|
|
$938
|
$658
|
Estimated Loss on
Kemper IGCC
|
|
|
|
44
|
108
|
Tax
Impact
|
|
|
|
(11)
|
(41)
|
Loss on Plant Scherer
Unit 3
|
|
|
|
-
|
33
|
Tax
Impact
|
|
|
|
-
|
(13)
|
Acquisition,
Integration, and Disposition Costs
|
|
|
|
62
|
4
|
Tax
Impact
|
|
|
|
(5)
|
(1)
|
Wholesale Gas
Services
|
|
|
|
(139)
|
(114)
|
Tax
Impact
|
|
|
|
35
|
46
|
|
|
|
|
|
|
Earnings Guidance
Comparability Items:
|
|
|
|
|
|
Equity Return Related
to Kemper IGCC
Schedule Extension
|
|
|
|
-
|
(23)
|
Tax
Impact
|
|
|
|
-
|
(5)
|
Adoption of Tax
Reform
|
|
|
|
(31)
|
-
|
Net Income –
Excluding Items
|
|
|
|
$893
|
$652
|
Average Shares
Outstanding – (in
millions)
|
|
|
|
1,011
|
993
|
Basic Earnings Per
Share – Excluding Items
|
|
|
|
$0.88
|
$0.66
|
|
|
|
|
|
|
NOTE: For more
information regarding these non-GAAP adjustments, see the footnotes
accompanying the Financial Highlights page of the earnings
package.
|
Earnings drivers year-over-year for the first quarter of 2018
were positively influenced by revenue effects primarily driven by
weather at our state-regulated electric utilities and by
infrastructure investments at Southern Company Gas, as well as the
optimization of Southern Power's state tax positions. These impacts
were partially offset by increased depreciation and
amortization.
"Each of our major business units had a tremendous start to the
year," said Chairman, President and CEO Thomas A. Fanning. "Our premier, state-regulated
electric and gas utilities, as well as our other businesses, have
performed exceptionally well and are on track to deliver on their
targets for 2018."
First quarter 2018 operating revenues were $6.37 billion, compared with $5.77 billion for the first quarter of 2017, an
increase of 10.4 percent.
Southern Company's first quarter earnings slides with
supplemental financial information 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 customers through its subsidiaries. The
company provides clean, safe, reliable and affordable energy
through electric operating companies in four states, natural gas
distribution companies 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 creating new products and services for the benefit
of customers. We are building the future of energy 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 and the number one Company for Progress
by DiversityInc, and designated as one of America's Best Employers
by Forbes magazine. Visit our website at
www.southerncompany.com.
Cautionary Note Regarding Forward-Looking
Statements:
Certain information contained in this
release is forward-looking information based on current
expectations and plans that involve risks and uncertainties.
Forward-looking information includes, among other things,
statements concerning performance targets. Southern Company
cautions that there are certain factors that can cause actual
results to differ materially from the forward-looking information
that has been provided. The reader is cautioned not to put undue
reliance on this forward-looking information, which is not a
guarantee of future performance and is subject to a number of
uncertainties and other factors, many of which are outside the
control of Southern Company; accordingly, there can be no assurance
that such suggested results will be realized. The following
factors, in addition to those discussed in Southern Company's
Annual Report on Form 10-K for the year ended December 31, 2017, and subsequent securities
filings, could cause actual results to differ materially from
management expectations as suggested by such forward-looking
information: the impact of recent and future federal and state
regulatory changes, including environmental laws and regulations
governing air, water, land, and protection of other natural
resources, and also changes in tax and other laws and regulations
to which Southern Company and its subsidiaries are subject, as well
as changes in application of existing laws and regulations; the
uncertainty surrounding the federal tax reform legislation,
including implementing regulations and Internal Revenue Service
interpretations, actions that may be taken in response by
regulatory authorities, and its impact, if any, on the credit
ratings of Southern Company and its subsidiaries; current and
future litigation or regulatory investigations, proceedings, or
inquiries; the effects, extent, and timing of the entry of
additional competition in the markets in which Southern Company's
subsidiaries operate; variations in demand for electricity and
natural gas, including those relating to weather, the general
economy, population and business growth (and declines), the effects
of energy conservation and efficiency measures, including from the
development and deployment of alternative energy sources such as
self-generation and distributed generation technologies, and any
potential economic impacts resulting from federal fiscal decisions;
available sources and costs of natural gas and other fuels; limits
on pipeline capacity; transmission constraints; effects of
inflation; the ability to control costs and avoid cost overruns
during the development, construction, and operation of facilities,
which include the development and construction of generating
facilities with designs that have not been previously constructed,
including changes in labor costs and productivity, adverse weather
conditions, shortages, increased costs or inconsistent quality of
equipment, materials, and labor, including any changes related to
imposition of import tariffs, contractor or supplier delay,
non-performance under construction, operating, or other agreements,
operational readiness, including specialized operator training and
required site safety programs, unforeseen engineering or design
problems, start-up activities (including major equipment failure
and system integration), and/or operational performance; the
ability to construct facilities in accordance with the requirements
of permits and licenses (including satisfaction of U.S. Nuclear
Regulatory Commission ("NRC") requirements), to satisfy any
environmental performance standards and the requirements of tax
credits and other incentives, and to integrate facilities into the
Southern Company system upon completion of construction; investment
performance of the Southern Company system's employee and retiree
benefit plans and nuclear decommissioning trust funds; advances in
technology; ongoing renewable energy partnerships and development
agreements; state and federal rate regulations and the impact of
pending and future rate cases and negotiations, including rate
actions relating to fuel and other cost recovery mechanisms; the
ability to successfully operate the electric utilities' generating,
transmission, and distribution facilities and Southern Company Gas'
natural gas distribution and storage facilities and the successful
performance of necessary corporate functions; legal proceedings and
regulatory approvals and actions related to Plant Vogtle Units 3
and 4, including Georgia Public Service Commission approvals and
NRC actions; if certain adverse events were to occur, a decision by
more than 10% of the owners of Plant Vogtle Units 3 and 4 not to
proceed with construction upon the occurrence of certain adverse
events; litigation related to the Kemper County energy facility;
the inherent risks involved in operating and constructing nuclear
generating facilities, including environmental, health, regulatory,
natural disaster, terrorism, and financial risks; the inherent
risks involved in transporting and storing natural gas; the
performance of projects undertaken by the non-utility businesses
and the success of efforts to invest in and develop new
opportunities; internal restructuring or other restructuring
options that may be pursued; potential business strategies,
including acquisitions or dispositions of assets or businesses,
including the proposed disposition by a wholly-owned subsidiary of
Southern Company Gas of Elizabethtown Gas and Elkton Gas, the
proposed disposition by Southern Company Gas of Pivotal Home
Solutions, and the potential sale of a 33% equity interest in
substantially all of Southern Power's solar assets, which cannot be
assured to be completed or beneficial to Southern Company or its
subsidiaries; the possibility that the anticipated benefits from
the acquisition of Southern Company Gas cannot be fully realized or
may take longer to realize than expected and the possibility that
costs related to the integration of Southern Company and Southern
Company Gas will be greater than expected; the ability of
counterparties of Southern Company and its subsidiaries to make
payments as and when due and to perform as required; the ability to
obtain new short- and long-term contracts with wholesale customers;
the direct or indirect effect on the Southern Company system's
business resulting from cyber intrusion or physical attack and the
threat of physical attacks; interest rate fluctuations and
financial market conditions and the results of financing efforts;
changes in Southern Company's and any of its subsidiaries' credit
ratings, including impacts on interest rates, access to capital
markets, and collateral requirements; the impacts of any sovereign
financial issues, including impacts on interest rates, access to
capital markets, impacts on foreign currency exchange rates,
counterparty performance, and the economy in general, as well as
potential impacts on the benefits of the U.S. Department of Energy
loan guarantees; the ability of Southern Company's electric
utilities to obtain additional generating capacity (or sell excess
generating capacity) at competitive prices; catastrophic events
such as fires, earthquakes, explosions, floods, tornadoes,
hurricanes and other storms, droughts, pandemic health events such
as influenzas, or other similar occurrences; the direct or indirect
effects on the Southern Company system's business resulting from
incidents affecting the U.S. electric grid, natural gas pipeline
infrastructure, or operation of generating or storage resources;
impairments of goodwill or long-lived assets; and the effect of
accounting pronouncements issued periodically by standard-setting
bodies. Southern Company expressly disclaims any obligation to
update any forward‐looking information.
Southern
Company
|
Financial
Highlights
|
(In Millions of
Dollars Except Earnings Per Share)
|
|
|
|
|
|
|
|
Three Months
Ended
March
|
Net Income–As
Reported (See Notes)
|
|
2018
|
|
2017
|
|
|
|
|
|
Traditional
Electric Operating Companies
|
|
$
|
612
|
|
|
$
|
432
|
|
Southern
Power
|
|
121
|
|
|
70
|
|
Southern
Company Gas
|
|
279
|
|
|
239
|
|
Total
|
|
1,012
|
|
|
741
|
|
Parent Company
and Other
|
|
(74)
|
|
|
(83)
|
|
Net
Income–As Reported
|
|
$
|
938
|
|
|
$
|
658
|
|
|
|
|
|
|
Basic Earnings
Per Share1
|
|
$
|
0.93
|
|
|
$
|
0.66
|
|
|
|
|
|
|
Average Shares
Outstanding (in millions)
|
|
1,011
|
|
|
993
|
|
End of Period
Shares Outstanding (in millions)
|
|
1,012
|
|
|
995
|
|
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
Three Months
Ended
March
|
Net
Income–Excluding Items (See Notes)
|
|
2018
|
|
2017
|
|
|
|
|
|
Net Income–As
Reported
|
|
$
|
938
|
|
|
$
|
658
|
|
Estimated Loss on
Kemper IGCC2
|
|
44
|
|
|
108
|
|
Tax Impact
|
|
(11)
|
|
|
(41)
|
|
Loss on Plant Scherer
Unit 33
|
|
—
|
|
|
33
|
|
Tax Impact
|
|
—
|
|
|
(13)
|
|
Acquisition,
Integration, and Disposition Costs4
|
|
62
|
|
|
4
|
|
Tax Impact
|
|
(5)
|
|
|
(1)
|
|
Wholesale Gas
Services5
|
|
(139)
|
|
|
(114)
|
|
Tax Impact
|
|
35
|
|
|
46
|
|
Earnings Guidance
Comparability Items:
|
|
|
|
|
Equity Return Related
to Kemper IGCC Schedule Extension6
|
|
—
|
|
|
(23)
|
|
Tax Impact
|
|
—
|
|
|
(5)
|
|
Adoption of Tax
Reform7
|
|
(31)
|
|
|
—
|
|
Net
Income–Excluding Items
|
|
$
|
893
|
|
|
$
|
652
|
|
|
|
|
|
|
Basic Earnings
Per Share–Excluding Items
|
|
$
|
0.88
|
|
|
$
|
0.66
|
|
|
|
|
|
|
-See Notes on the
following page.
|
|
Southern
Company
|
Financial
Highlights
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
(1) For the three
months ended March 31, 2018 and 2017, dilution does not change
basic earnings per share by more than 1 cent and is not
material.
|
|
(2) Earnings for the
three months ended March 31, 2018 and 2017 include charges related
to Mississippi Power Company's integrated coal gasification
combined cycle facility project in Kemper County, Mississippi
(Kemper IGCC) that significantly impacted the presentation of
earnings and earnings per share. Additional pre-tax cancellation
costs of up to $50 million are expected to occur during the
remainder of 2018 and 2019.
|
|
|
|
|
|
|
|
|
|
(3) Earnings for the
three months ended March 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 its 2017 retail
rate case settlement. Further charges are not expected to
occur.
|
|
|
|
|
|
|
|
|
|
(4) Earnings for the
three months ended March 31, 2018 and 2017 include costs related to
the acquisition and integration of Southern Company Gas and
earnings for the three months ended March 31, 2018 include costs
related to the pending dispositions of Elizabethtown Gas, Elkton
Gas, and Pivotal Home Solutions. The costs associated with the
Pivotal Home Solutions transaction include a goodwill impairment
charge of $42 million. 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 months ended March 31, 2018 and 2017 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 months ended March 31, 2017 include allowance for funds used
during construction (AFUDC) equity as a result of extending the
Kemper IGCC construction schedule beyond November 30, 2016, as
assumed when Southern Company issued its 2017 guidance. As a
result, Southern Company believes presentation of earnings per
share excluding these amounts provides investors with information
comparable to guidance. Management also used such measures to
evaluate Southern Company's 2017 performance. AFUDC equity ceased
in connection with the project's suspension in June
2017.
|
|
|
|
|
|
|
|
|
|
(7) Earnings for the
three months ended March 31, 2018 include additional net tax
benefits as a result of implementing federal tax reform
legislation, which was signed into law on December 22, 2017. During
the current period, Southern Company obtained and analyzed
additional information that was not initially available or reported
as provisional amounts at December 31, 2017. Additional adjustments
are expected until Southern Company's 2017 federal income tax
return is complete and provisional estimates are actualized during
the measurement period ending December 31, 2018. Southern Company
believes presentation of earnings per share excluding these amounts
provides investors with information comparable to guidance.
Management also uses such measures to evaluate Southern Company's
performance.
|
|
|
|
|
|
|
|
|
|
|
Southern
Company
|
Significant
Factors Impacting EPS
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
|
|
|
2018
|
|
2017
|
|
Change
|
Earnings Per
Share–
|
|
|
|
|
|
|
As
Reported1 (See Notes)
|
|
$
|
0.93
|
|
|
$
|
0.66
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
Significant
Factors:
|
|
|
|
|
|
|
Traditional
Electric Operating Companies
|
|
|
|
|
|
$
|
0.18
|
|
Southern
Power
|
|
|
|
|
|
0.05
|
|
Southern Company
Gas
|
|
|
|
|
|
0.04
|
|
Parent Company and
Other
|
|
|
|
|
|
0.01
|
|
Increase in
Shares
|
|
|
|
|
|
(0.01)
|
|
Total–As
Reported
|
|
|
|
|
|
$
|
0.27
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
|
Non-GAAP Financial
Measures
|
|
2018
|
|
2017
|
|
Change
|
Earnings Per
Share–
|
|
|
|
|
|
|
Excluding Items
(See Notes)
|
|
$
|
0.88
|
|
|
$
|
0.66
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
Total–As
Reported
|
|
|
|
|
|
$
|
0.27
|
|
Kemper IGCC
Impacts2
|
|
|
|
|
|
(0.02)
|
|
Loss on Plant Scherer
Unit 33
|
|
|
|
|
|
(0.02)
|
|
Acquisition,
Integration, and Disposition Costs4
|
|
|
|
|
|
0.05
|
|
Wholesale Gas
Services5
|
|
|
|
|
|
(0.03)
|
|
Adoption of Tax
Reform6
|
|
|
|
|
|
(0.03)
|
|
Total–Excluding Items
|
|
|
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
- See Notes on the
following page.
|
|
Southern
Company
|
Significant
Factors Impacting EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three
months ended March 31, 2018 and 2017, dilution does not change
basic earnings per share by more than 1 cent and is not
material.
|
|
(2) Earnings for the
three months ended March 31, 2018 and 2017 include charges related
to Mississippi Power Company's integrated coal gasification
combined cycle facility project in Kemper County, Mississippi
(Kemper IGCC) that significantly impacted the presentation of
earnings and earnings per share. Additional pre-tax cancellation
costs of up to $50 million are expected to occur during the
remainder of 2018 and 2019.
Earnings for the three months ended March 31, 2017 include
allowance for funds used during construction (AFUDC) equity as a
result of extending the Kemper IGCC construction schedule beyond
November 30, 2016, as assumed when Southern Company issued its 2017
guidance. As a result, Southern Company believes presentation of
earnings per share excluding these amounts provides investors with
information comparable to guidance. Management also used such
measures to evaluate Southern Company's 2017 performance. AFUDC
equity ceased in connection with the project's suspension in June
2017.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Earnings for the
three months ended March 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 its 2017 retail
rate case settlement. Further charges are not expected to
occur.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Earnings for the
three months ended March 31, 2018 and 2017 include costs related to
the acquisition and integration of Southern Company Gas and
earnings for the three months ended March 31, 2018 include costs
related to the pending dispositions of Elizabethtown Gas, Elkton
Gas, and Pivotal Home Solutions. The costs associated with the
Pivotal Home Solutions transaction include a goodwill impairment
charge of $42 million. 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 months ended March 31, 2018 and 2017 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 months ended March 31, 2018 include additional net tax
benefits as a result of implementing federal tax reform
legislation, which was signed into law on December 22, 2017. During
the current period, Southern Company obtained and analyzed
additional information that was not initially available or reported
as provisional amounts at December 31, 2017. Additional adjustments
are expected until Southern Company's 2017 federal income tax
return is complete and provisional estimates are actualized during
the measurement period ending December 31, 2018. Southern Company
believes presentation of earnings per share excluding these amounts
provides investors with information comparable to guidance.
Management also uses such measures to evaluate Southern Company's
performance.
|
|
|
Southern
Company
|
EPS Earnings
Analysis
|
Three Months Ended
March 2018 vs. March 2017
|
|
|
Cents
|
Description
|
|
|
2¢
|
Retail
Sales
|
|
|
1¢
|
Retail Revenue
Impacts, Excluding Tax Reform Changes
|
|
|
9¢
|
Weather
|
|
|
(1)¢
|
Non-Fuel
O&M
|
|
|
(3)¢
|
Depreciation and
Amortization
|
|
|
(1)¢
|
Taxes Other Than
Income Taxes
|
|
|
1¢
|
Dividends on
Preferred and Preference Stock
|
|
|
3¢
|
Impacts of Tax Reform
(Ongoing Basis), Net of Amounts to be Returned to
Customers
|
|
|
1¢
|
Income Taxes,
Excluding Tax Reform
|
|
|
12¢
|
Total Traditional
Electric Operating Companies
|
|
|
5¢
|
Southern
Power
|
|
|
6¢
|
Southern Company
Gas
|
|
|
(1)¢
|
Increase in
Shares
|
|
|
22¢
|
Total Change in
EPS (Excluding Items)
|
|
|
2¢
|
Kemper IGCC
Impacts1
|
|
|
2¢
|
Loss on Plant Scherer
Unit 32
|
|
|
(5)¢
|
Acquisition,
Integration, and Disposition Costs3
|
|
|
3¢
|
Wholesale Gas
Services4
|
|
|
3¢
|
Adoption of Tax
Reform5
|
|
|
27¢
|
Total Change in
EPS (As Reported)
|
|
|
- See Notes on the
following page.
|
|
Southern
Company
|
EPS Earnings
Analysis
|
Three Months Ended
March 2018 vs. March 2017
|
Notes
|
|
(1) Earnings for the
three months ended March 31, 2018 and 2017 include charges related
to Mississippi Power Company's integrated coal gasification
combined cycle facility project in Kemper County, Mississippi
(Kemper IGCC) that significantly impacted the presentation of
earnings and earnings per share. Additional pre-tax cancellation
costs of up to $50 million are expected to occur during the
remainder of 2018 and 2019.
Earnings for the three months ended March 31, 2017 include
allowance for funds used during construction (AFUDC) equity as a
result of extending the Kemper IGCC construction schedule beyond
November 30, 2016, as assumed when Southern Company issued its 2017
guidance. As a result, Southern Company believes presentation of
earnings per share excluding these amounts provides investors with
information comparable to guidance. Management also used such
measures to evaluate Southern Company's 2017 performance. AFUDC
equity ceased in connection with the project's suspension in June
2017.
|
|
(2) Earnings for the
three months ended March 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 its 2017 retail
rate case settlement. Further charges are not expected to
occur.
|
|
(3) Earnings for the
three months ended March 31, 2018 and 2017 include costs related to
the acquisition and integration of Southern Company Gas and
earnings for the three months ended March 31, 2018 include costs
related to the pending dispositions of Elizabethtown Gas, Elkton
Gas, and Pivotal Home Solutions. The costs associated with the
Pivotal Home Solutions transaction include a goodwill impairment
charge of $42 million. 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.
|
|
|
(4) Earnings for the
three months ended March 31, 2018 and 2017 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.
|
|
|
(5) Earnings for the
three months ended March 31, 2018 include additional net tax
benefits as a result of implementing federal tax reform
legislation, which was signed into law on December 22, 2017. During
the current period, Southern Company obtained and analyzed
additional information that was not initially available or reported
as provisional amounts at December 31, 2017. Additional adjustments
are expected until Southern Company's 2017 federal income tax
return is complete and provisional estimates are actualized during
the measurement period ending December 31, 2018. Southern Company
believes presentation of earnings per share excluding these amounts
provides investors with information comparable to guidance.
Management also uses such measures to evaluate Southern Company's
performance.
|
Southern
Company
|
Consolidated
Earnings
|
As
Reported
|
(In Millions of
Dollars)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
|
|
|
2018
|
|
2017
|
|
Change
|
Income
Account-
|
|
|
|
|
|
|
Retail Electric
Revenues-
|
|
|
|
|
|
|
Fuel
|
|
$
|
1,027
|
|
|
$
|
928
|
|
|
$
|
99
|
|
Non-Fuel
|
|
2,541
|
|
|
2,466
|
|
|
75
|
|
Wholesale Electric
Revenues
|
|
619
|
|
|
531
|
|
|
88
|
|
Other Electric
Revenues
|
|
165
|
|
|
175
|
|
|
(10)
|
|
Natural Gas
Revenues
|
|
1,607
|
|
|
1,530
|
|
|
77
|
|
Other
Revenues
|
|
413
|
|
|
141
|
|
|
272
|
|
Total
Revenues
|
|
6,372
|
|
|
5,771
|
|
|
601
|
|
Fuel and Purchased
Power
|
|
1,368
|
|
|
1,175
|
|
|
193
|
|
Cost of Natural
Gas
|
|
720
|
|
|
719
|
|
|
1
|
|
Cost of Other
Sales
|
|
289
|
|
|
88
|
|
|
201
|
|
Non-Fuel O &
M
|
|
1,451
|
|
|
1,383
|
|
|
68
|
|
Depreciation and
Amortization
|
|
769
|
|
|
716
|
|
|
53
|
|
Taxes Other Than
Income Taxes
|
|
355
|
|
|
330
|
|
|
25
|
|
Estimated Loss on
Kemper IGCC
|
|
44
|
|
|
108
|
|
|
(64)
|
|
Total Operating
Expenses
|
|
4,996
|
|
|
4,519
|
|
|
477
|
|
Operating
Income
|
|
1,376
|
|
|
1,252
|
|
|
124
|
|
Allowance for Equity
Funds Used During Construction
|
|
30
|
|
|
57
|
|
|
(27)
|
|
Earnings from Equity
Method Investments
|
|
41
|
|
|
39
|
|
|
2
|
|
Interest Expense, Net
of Amounts Capitalized
|
|
458
|
|
|
416
|
|
|
42
|
|
Other Income
(Expense), net
|
|
60
|
|
|
48
|
|
|
12
|
|
Income
Taxes
|
|
113
|
|
|
315
|
|
|
(202)
|
|
Net
Income
|
|
936
|
|
|
665
|
|
|
271
|
|
Less:
|
|
|
|
|
|
|
Dividends on
Preferred and Preference Stock of Subsidiaries
|
|
4
|
|
|
11
|
|
|
(7)
|
|
Net Income
Attributable to Noncontrolling Interests
|
|
(6)
|
|
|
(4)
|
|
|
(2)
|
|
NET INCOME
ATTRIBUTABLE TO SOUTHERN COMPANY
|
|
$
|
938
|
|
|
$
|
658
|
|
|
$
|
280
|
|
|
|
|
|
|
|
|
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
March
|
As
Reported
|
|
2018
|
|
2017
|
|
Change
|
|
Weather
Adjusted
Change
|
Kilowatt-Hour
Sales-
|
|
|
|
|
|
|
|
|
Total
Sales
|
|
50,844
|
|
|
46,198
|
|
|
10.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total Retail
Sales-
|
|
38,390
|
|
|
35,504
|
|
|
8.1
|
%
|
|
1.6
|
%
|
Residential
|
|
12,967
|
|
|
10,916
|
|
|
18.8
|
%
|
|
1.1
|
%
|
Commercial
|
|
12,287
|
|
|
11,768
|
|
|
4.4
|
%
|
|
1.2
|
%
|
Industrial
|
|
12,931
|
|
|
12,606
|
|
|
2.6
|
%
|
|
2.6
|
%
|
Other
|
|
205
|
|
|
214
|
|
|
(4.3)
|
%
|
|
(4.7)
|
%
|
|
|
|
|
|
|
|
|
|
Total Wholesale
Sales
|
|
12,454
|
|
|
10,694
|
|
|
16.5
|
%
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In Thousands
of Customers)
|
|
|
|
|
|
|
|
|
|
|
|
Period Ended
March
|
|
|
|
|
2018
|
|
2017
|
|
Change
|
|
|
Regulated Utility
Customers-
|
|
|
|
|
|
|
|
|
Total Utility
Customers-
|
|
9,306
|
|
|
9,226
|
|
|
0.9
|
%
|
|
|
Total Traditional
Electric
|
|
4,652
|
|
|
4,608
|
|
|
1.0
|
%
|
|
|
Southern Company
Gas
|
|
4,654
|
|
|
4,618
|
|
|
0.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Southern
Company
|
Financial
Overview
|
As
Reported
|
(In Millions of
Dollars)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March
|
|
|
2018
|
|
2017
|
|
% Change
|
Southern Company
–
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
6,372
|
|
|
$
|
5,771
|
|
|
10.4
|
%
|
Earnings Before
Income Taxes
|
|
1,049
|
|
|
980
|
|
|
7.0
|
%
|
Net Income Available
to Common
|
|
938
|
|
|
658
|
|
|
42.6
|
%
|
|
|
|
|
|
|
|
Alabama Power
–
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
1,473
|
|
|
$
|
1,382
|
|
|
6.6
|
%
|
Earnings Before
Income Taxes
|
|
311
|
|
|
304
|
|
|
2.3
|
%
|
Net Income Available
to Common
|
|
225
|
|
|
174
|
|
|
29.3
|
%
|
|
|
|
|
|
|
|
Georgia Power
–
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
1,961
|
|
|
$
|
1,832
|
|
|
7.0
|
%
|
Earnings Before
Income Taxes
|
|
445
|
|
|
420
|
|
|
6.0
|
%
|
Net Income Available
to Common
|
|
352
|
|
|
260
|
|
|
35.4
|
%
|
|
|
|
|
|
|
|
Gulf Power
–
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
348
|
|
|
$
|
350
|
|
|
(0.6)
|
%
|
Earnings Before
Income Taxes
|
|
55
|
|
|
34
|
|
|
61.8
|
%
|
Net Income Available
to Common
|
|
42
|
|
|
18
|
|
|
133.3
|
%
|
|
|
|
|
|
|
|
Mississippi Power
–
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
302
|
|
|
$
|
272
|
|
|
11.0
|
%
|
Earnings (Loss)
Before Income Taxes
|
|
(11)
|
|
|
(47)
|
|
|
N/M
|
Net Income (Loss)
Available to Common
|
|
(7)
|
|
|
(20)
|
|
|
N/M
|
|
|
|
|
|
|
|
Southern Power
–
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
509
|
|
|
$
|
450
|
|
|
13.1
|
%
|
Earnings Before
Income Taxes
|
|
16
|
|
|
14
|
|
|
14.3
|
%
|
Net Income Available
to Common
|
|
121
|
|
|
70
|
|
|
72.9
|
%
|
|
|
|
|
|
|
|
Southern Company
Gas –
|
|
|
|
|
|
|
Operating
Revenues
|
|
$
|
1,639
|
|
|
$
|
1,560
|
|
|
5.1
|
%
|
Earnings Before
Income Taxes
|
|
383
|
|
|
389
|
|
|
(1.5)
|
%
|
Net Income Available
to Common
|
|
279
|
|
|
239
|
|
|
16.7
|
%
|
|
|
|
|
|
|
|
N/M - not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- See Financial
Highlights pages for discussion of certain significant items
occurring during the periods presented.
|
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SOURCE Southern Company