Southern Company reports fourth-quarter and full-year 2019 earnings
ATLANTA, Feb. 20, 2020 /PRNewswire/ -- Southern Company today reported fourth-quarter 2019 earnings of $440 million, or 42 cents per share, compared with $278 million, or 27 cents per share, in the fourth quarter of 2018. Southern Company also reported full-year 2019 earnings of $4.74 billion, or $4.53 per share, compared with earnings of $2.23 billion, or $2.18 per share, in 2018.
Excluding the items described in the "Net Income - Excluding Items" table below, Southern Company earned $283 million, or 27 cents per share, during the fourth quarter of 2019, compared with $256 million, or 25 cents per share, during the fourth quarter of 2018. For the full year 2019, excluding these items, Southern Company earned $3.25 billion, or $3.11 per share, compared with earnings of $3.13 billion, or $3.07 per share, in 2018.
Non-GAAP Financial Measures Three Months Ended December Year-to-Date December
Net Income - Excluding Items (in millions) 2019 2018 2019 2018
Net Income - As Reported $440 $278 $4,739 $2,226
Less:
Acquisition, Disposition, and Integration Impacts 39 (58) 2,516 35
Tax Impact 48 11 (1,081) (294)
Estimated Loss on Plants Under Construction (11) 6 (27) (1,102)
Tax Impact (4) 94 376
Wholesale Gas Services 136 (41) 215 42
Tax Impact (34) 14 (52) (4)
Asset Impairment (16) (108)
Tax Impact (1) 26
Litigation Settlement 24
Tax Impact (6)
Earnings Guidance Comparability Item:
Adoption of Tax Reform (4) 27
Net Income - Excluding Items $283 $256 $3,250 $3,128
Average Shares Outstanding - (in millions) 1,052 1,034 1,046 1,020
Basic Earnings Per Share - Excluding Items $0.27 $0.25 $3.11 $3.07
NOTE: For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package.
Earnings drivers for the full year 2019 were positively influenced by higher earnings at our state-regulated utilities, more than offsetting the impact of divested entities on earnings. The increases reflect the continued impacts of tax reform, including related changes in capital structure, as well as continued investment at our state-regulated utilities, along with customer growth, offset by declines in customer usage.
"By all accounts, 2019 was an outstanding year for Southern Company, as we performed well across a broad range of metrics," said Chairman, President and CEO Thomas A. Fanning. "Operational performance at our state-regulated utilities was superb, with record generation and transmission reliability. Nicor Gas reliably delivered natural gas to customers in Illinois during unprecedented cold temperatures. We continued to decarbonize our generation fleet and we saw constructive outcomes in several key regulatory proceedings."
"At Georgia Power's Plant Vogtle, we accomplished all major 2019 milestones associated with the construction of new nuclear units 3 and 4," added Fanning. "We have refined our aggressive site work plan for the project, which will serve as a tool to drive improved productivity to achieve the regulatory-approved in-service dates of November 2021 for Unit 3 and November 2022 for Unit 4."
Fourth quarter 2019 operating revenues were $4.91 billion, compared with $5.34 billion for the fourth quarter of 2018, a decrease of 7.9 percent. Operating revenues for the full year 2019 were $21.42 billion, compared with $23.50 billion in 2018, a decrease of 8.8 percent. These decreases reflect the dispositions of Gulf Power and other assets.
Southern Company's fourth 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 Andrew W. Evans will discuss earnings and provide a general business update, including earnings guidance for 2020. 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 a leading energy company serving 9 million customers through its subsidiaries. The company provides clean, safe, reliable and affordable energy through electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company serving wholesale customers across America, a leading distributed energy infrastructure company, a fiber optics network and telecommunications services. Southern Company brands are known for excellent customer service, high reliability and affordable prices below the national average. For more than a century, we have been building the future of energy and developing the full portfolio of energy resources, including carbon-free nuclear, advanced carbon capture technologies, natural gas, renewables, energy efficiency and storage technology. Through an industry-leading commitment to innovation and a low-carbon future, Southern Company and its subsidiaries develop the customized energy solutions our customers and communities require to drive growth and prosperity. Our uncompromising values ensure we put the needs of those we serve at the center of everything we do and govern our business to the benefit of our world. Our corporate culture and hiring practices have been recognized nationally by the U.S. Department of Defense, G.I. Jobs magazine, DiversityInc, Black Enterprise, Forbes and the Women's Choice Award. To learn more, visit 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 expected schedule for completion of Plant Vogtle units 3 and 4. 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, 2019 and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle Units 3 and 4, which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale, and including changes in labor costs, availability and productivity; challenges with management of contractors or vendors; subcontractor performance; adverse weather conditions; shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor; contractor or supplier delay; delays due to judicial or regulatory action; nonperformance under construction, operating, or other agreements; operational readiness, including specialized operator training and required site safety programs; engineering or design problems; design and other licensing-based compliance matters, including, for nuclear units, the timely submittal by Southern Nuclear of the Inspections, Tests, Analyses, and Acceptance Criteria documentation for each unit and the related reviews and approvals by the U.S. Nuclear Regulatory Commission ("NRC") necessary to support NRC authorization to load fuel; challenges with start-up activities, including major equipment failure, system integration or regional transmission upgrades; and/or operational performance; the ability to overcome or mitigate the current challenges at Plant Vogtle Units 3 and 4 that could impact the cost and schedule for the project; legal proceedings and regulatory approvals and actions related to construction projects, such as Plant Vogtle Units 3 and 4 and pipeline projects, including Public Service Commission approvals and Federal Energy Regulatory Commission and NRC actions; under certain specified circumstances, a decision by holders of more than 10% of the ownership interests of Plant Vogtle Units 3 and 4 not to proceed with construction and the ability of other Vogtle owners to tender a portion of their ownership interests to Georgia Power following certain construction cost increases; in the event Georgia Power becomes obligated to provide funding to Municipal Electric Authority of Georgia ("MEAG") with respect to the portion of MEAG's ownership interest in Plant Vogtle Units 3 and 4 involving Jacksonville Electric Authority, any inability of Georgia Power to receive repayment of such funding; the ability to construct facilities in accordance with the requirements of permits and licenses (including satisfaction of 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; the inherent risks involved in operating and constructing nuclear generating facilities; the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due and to perform as required; 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; catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events or other similar occurrences; and 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. 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
Year-to-Date
December December
Net Income-As Reported (See Notes) 2019 2018 2019 2018
Traditional Electric Operating Companies $
210 $
407 $
2,929 $
2,117
Southern Power 23 (48) 339 187
Southern Company Gas 238 78 585 372
Total 471 437 3,853 2,676
Parent Company and Other (31) (159) 886 (450)
Net Income-As Reported $
440 $
278 $
4,739 $
2,226
Basic Earnings Per Share(1) $
0.42 $
0.27 $
4.53 $
2.18
Average Shares Outstanding (in millions) 1,052 1,034 1,046 1,020
End of Period Shares Outstanding (in millions) 1,053 1,034
Non-GAAP Financial Measures Three Months Ended
Year-to-Date
December December
Net Income-Excluding Items (See Notes) 2019 2018 2019 2018
Net Income-As Reported $
440 $
278 $
4,739 $
2,226
Less:
Acquisition, Disposition, and Integration Impacts(2) 39 (58) 2,516 35
Tax Impact 48 11 (1,081) (294)
Estimated Loss on Plants Under Construction(3) (11) 6 (27) (1,102)
Tax Impact (4) 94 376
Wholesale Gas Services4 136 (41) 215 42
Tax Impact (34) 14 (52) (4)
Asset Impairment5 (16) (108)
Tax Impact (1) 26
Litigation Settlement6 24
Tax Impact (6)
Earnings Guidance Comparability Item:
Adoption of Tax Reform6 (4) 27
Net Income-Excluding Items $
283 $
256 $
3,250 $
3,128
Basic Earnings Per Share-Excluding Items $
0.27 $
0.25 $
3.11 $
3.07
Southern Company
Financial Highlights
Notes
---
(1) Dilutive impacts are immaterial ($0.03 or less per share) in all periods. Diluted earnings per share was $0.42
and $4.50 for the three and twelve months ended December 31 2019, respectively, and $0.27 and $2.17 for the
three and twelve months ended December 31, 2018, respectively.
(2) Earnings for the three months ended December 31, 2019 include: (i) a $70 million pre-tax ($102 million after-
tax)
increase for the gain on the sale of Gulf Power; (ii) a $24 million pre-tax ($17 million after-tax) impairment
charge in contemplation of the pending sale of Pivotal LNG and Atlantic Coast Pipeline; and (iii) a net $7
million pre-tax reduction to earnings (net $2 million after-tax increase to earnings) of other acquisition,
disposition, and integration impacts.
Earnings for the twelve months ended December 31, 2019
include: (i) a $2.6 billion pre-tax ($1.4 billion after-tax) gain on the sale of Gulf Power; (ii) a $23
million pre-tax ($88 million after-tax) gain on the sale of Plant Nacogdoches; and (iii) $18 million pre tax
($11 million after tax) of other acquisition, disposition, and integration impacts, partially offset by: (i) a
$58 million pre-tax ($52 million after-tax) net loss, including impairment charges, associated with the sales
of PowerSecure's utility infrastructure services and lighting businesses and (ii) a $24 million pre-tax ($17
million after-tax) impairment charge in contemplation of the pending sale of Pivotal LNG and Atlantic Coast
Pipeline. Earnings for the three months ended December 31, 2018 include: (i) a net combined $27 million pre-
tax loss (net combined $15 million after-tax loss) to reflect the final adjustments for the sales of
Elizabethtown Gas, Elkton Gas, Florida City Gas, and Pivotal Home Solutions and (ii) other acquisition,
disposition, and integration costs of $31 million pre tax ($32 million after tax). Earnings for the twelve
months ended December 31, 2018 include: (i) a net combined $249 million pre-tax gain ($93 million after-tax
loss) on the sales of Elizabethtown Gas, Elkton Gas, Florida City Gas, and Pivotal Home Solutions, including a
related impairmentcharge; (ii) a $119 million pre-tax ($89 million after-tax) impairment charge associated
with the sales of Plants Stanton and Oleander; and (iii) $95 million pre tax ($77 million after tax) of other
acquisition, disposition, and integration costs. Further impacts are expected to be recorded in 2020 in
connection with the sale of Plant Mankato and the pending sale of Pivotal LNG and Atlantic Coast Pipeline.
(3) Earnings for the three and twelve months ended December 31, 2019 and 2018 include charges, associated legal
expenses, and tax impacts related to Mississippi Power's integrated coal gasification combined cycle facility
project in Kemper County, Mississippi. Additionally, the three and twelve months ended December 31, 2018
include a $95 million credit to earnings primarily resulting from the reduction of a related state income tax
valuation allowance. Mississippi Power expects to substantially complete mine reclamation activities in 2020
and dismantlement of the abandoned gasifier-related assets and site restoration activities by 2024. The
additional pre-tax period costs associated with these activities, including related costs for compliance and
safety, asset retirement obligation accretion, and property taxes, are estimated to total $17 million in 2020,
$15 to $16 million annually in 2021through 2023, and $5 million in 2024. Earnings for the twelve months ended
December 31, 2018 also include a $1.1 billion charge ($0.8 billion after tax) for an estimated probable loss on
Georgia Power's construction of Plant Vogtle Units 3 and 4. Further charges for Georgia Power's Plant Vogtle
Units 3 and 4 may occur; however, the amount and timing of any such charges are uncertain.
(4) Earnings for the three and twelve months ended December 31, 2019 and 2018 include Wholesale Gas Services
business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides 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 twelve months ended December 31, 2019 include a pre-tax impairment charge of $91 million ($69
million after tax) associated with a natural gas storage facility and earnings for the three months ended
December 31, 2019 include an adjustment of $(1) million pre tax ($4 million after tax) of this impairment
charge. Additionally, earnings for the three and twelve months ended December 31, 2019 include a pre-tax
impairment charge of $17 million ($13 million after tax) related to a leveraged lease. Additional impairment
charges associated with other natural gas storage facilities or this leveraged lease investment may occur;
however, the amount and timing of any such charges are uncertain.
(6) Earnings for the twelve months ended December 31, 2018 include the settlement proceeds of Mississippi Power's
claim for lost revenue resulting from the 2010 Deepwater Horizon oil spill and earnings for the three and
twelve months ended December 31, 2018 include additional net tax benefits as a result of implementing federal
tax reform legislation.
Additional proceeds or adjustments are not expected.
Southern Company
Significant
Factors Impacting EPS
Three Months Ended
Year-to-Date
December December
2019 2018 Change 2019 2018 Change
---
Earnings Per Share-
As Reported1 (See Notes) $
0.42 $
0.27 $
0.15 $
4.53 $
2.18 $
2.35
Significant Factors:
Traditional Electric Operating Companies $
(0.19) $
0.80
Southern Power 0.07 0.15
Southern Company Gas 0.15 0.21
Parent Company and Other 0.13 1.30
Increase in Shares (0.01) (0.11)
Total-As Reported $
0.15 $
2.35
Three Months Ended
Year-to-Date
December December
Non-GAAP Financial Measures 2019 2018 Change 2019 2018 Change
---
Earnings Per Share-
Excluding Items (See Notes) $
0.27 $
0.25 $
0.02 $
3.11 $
3.07 $
0.04
Total-As Reported $
0.15 $
2.35
Less:
Acquisition, Disposition, and Integration 0.13 1.63
Impacts(2)
Estimated Loss on Plants Under Construction(3) (0.11) 0.68
Wholesale Gas Services4 0.13 0.13
Asset Impairment5 (0.02) (0.08)
Litigation Settlement6 (0.02)
Adoption of Tax Reform6 (0.03)
Total-Excluding Items $
0.02 $
0.04
Southern Company
Significant Factors Impacting EPS
Notes
---
(1) Dilutive impacts are immaterial
($0.03 or less per share) in all
periods. Diluted earnings per
share was $0.42 and $4.50 for
the three and twelve months
ended December 31 2019,
respectively, and $0.27 and
$2.17 for the three and twelve
months ended December 31, 2018,
respectively.
(2) Earnings for the three months
ended December 31, 2019 include:
(i) a $70 million pre-tax ($102
million after- tax) increase
for the gain on the sale of Gulf
Power; (ii) a $24 million pre-
tax ($17 million after-tax)
impairment charge in
contemplation of the pending
sale of Pivotal LNG and Atlantic
Coast Pipeline; and (iii) a net
$7 million pre-tax reduction to
earnings (net $2 million after-
tax increase to earnings) of
other acquisition, disposition,
and integration impacts.
Earnings for the twelve months
ended December 31, 2019 include:
(i) a $2.6 billion pre-tax
($1.4 billion after-tax) gain
on the sale of Gulf Power; (ii)
a $23 million pre-tax ($88
million after-tax) gain on the
sale of Plant Nacogdoches; and
(iii) $18 million pre tax ($11
million after tax) of other
acquisition, disposition, and
integration impacts, partially
offset by: (i) a $58 million
pre-tax ($52 million after-
tax) net loss, including
impairment charges, associated
with the sales of PowerSecure's
utility infrastructure services
and lighting businesses and (ii)
a $24 million pre-tax ($17
million after-tax) impairment
charge in contemplation of the
pending sale of Pivotal LNG and
Atlantic Coast Pipeline.
Earnings for the three months
ended December 31, 2018 include:
(i) a net combined $27 million
pre-tax loss (net combined $15
million after-tax loss) to
reflect the final adjustments
for the sales of Elizabethtown
Gas, Elkton Gas, Florida City
Gas, and Pivotal Home Solutions
and (ii) other acquisition,
disposition, and integration
costs of $31 million pre tax
($32 million after tax).
Earnings for the twelve months
ended December 31, 2018 include:
(i) a net combined $249 million
pre-tax gain ($93 million
after-tax loss) on the sales of
Elizabethtown Gas, Elkton Gas,
Florida City Gas, and Pivotal
Home Solutions, including a
related impairment charge; (ii)
a $119 million pre-tax ($89
million after-tax) impairment
charge associated with the sales
of Plants Stanton and Oleander;
and (iii) $95 million pre tax
($77 million after tax) of other
acquisition, disposition, and
integration costs. Further
impacts are expected to be
recorded in 2020 in connection
with the sale of Plant Mankato
and the pending sale of Pivotal
LNG and Atlantic Coast Pipeline.
(3) Earnings for the three and twelve
months ended December 31, 2019
and 2018 include charges,
associated legal expenses, and
tax impacts related to
Mississippi Power's integrated
coal gasification combined cycle
facility project in Kemper
County, Mississippi.
Additionally, the three and
twelve months ended December 31,
2018 include a $95 million
credit to earnings primarily
resulting from the reduction of
a related state income tax
valuation allowance. Mississippi
Power expects to substantially
complete mine reclamation
activities in 2020 and
dismantlement of the abandoned
gasifier-related assets and
site restoration activities by
2024. The additional pre-tax
period costs associated with
these activities, including
related costs for compliance and
safety, asset retirement
obligation accretion, and
property taxes, are estimated to
total $17 million in 2020, $15
to $16 million annually in 2021
through 2023, and $5 million in
2024. Earnings for the twelve
months ended December 31, 2018
also include a $1.1 billion
charge ($0.8 billion after tax)
for an estimated probable loss
on Georgia Power's construction
of Plant Vogtle Units 3 and 4.
Further charges for Georgia
Power's Plant Vogtle Units 3 and
4 may occur; however, the amount
and timing of any such charges
are uncertain.
(4) Earnings for the three and twelve
months ended December 31, 2019
and 2018 include Wholesale Gas
Services business results.
Presenting earnings and earnings
per share excluding Wholesale
Gas Services provides 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 twelve months
ended December 31, 2019 include
a pre-tax impairment charge of
$91 million ($69 million after
tax) associated with a natural
gas storage facility and
earnings for the three months
ended December 31, 2019 include
an adjustment of $(1) million
pre tax ($4 million after tax)
of this impairment charge.
Additionally, earnings for the
three and twelve months ended
December 31, 2019 include a pre-
tax impairment charge of $17
million ($13 million after tax)
related to a leveraged lease.
Additional impairment charges
associated with other natural
gas storage facilities or this
leveraged lease investment may
occur; however, the amount and
timing of any such charges are
uncertain.
(6) Earnings for the twelve months
ended December 31, 2018 include
the settlement proceeds of
Mississippi Power's claim for
lost revenue resulting from the
2010 Deepwater Horizon oil spill
and earnings for the three and
twelve months ended December 31,
2018 include additional net tax
benefits as a result of
implementing federal tax reform
legislation. Additional proceeds
or adjustments are not expected.
Southern Company
EPS Earnings Analysis
Description Three Months Ended
Year-to-Date
December
2019 vs. 2018
December
2019 vs. 2018
---
Retail Sales $(0.02) $(0.12)
Retail Revenue Impacts 0.11 0.44
Weather (0.03) 0.02
Wholesale and Other Operating Revenues 0.01 0.07
Non-Fuel O&M (0.11) (0.14)
Interest Expense, Depreciation and Amortization, Other (0.03)
Income Taxes 0.04 0.14
Gulf Power Earnings (0.01) (0.16)
Total Traditional Electric Operating Companies $(0.01) $0.22
---
Southern Power (0.02) (0.12)
Southern Company Gas 0.03 0.04
Parent and Other 0.02 (0.02)
Increase in Shares (0.08)
Total Change in EPS (Excluding Items) $0.02 $0.04
---
Acquisition, Disposition, and Integration Impacts(1) 0.13 1.63
Estimated Loss on Plants Under Construction(2) (0.11) 0.68
Wholesale Gas Services(3) 0.13 0.13
Asset Impairment4 (0.02) (0.08)
Litigation Settlement5 (0.02)
Adoption of Tax Reform5 (0.03)
Total Change in EPS (As Reported) $0.15 $2.35
---
Southern Company
EPS Earnings Analysis
Three and Twelve Months Ended
December 2019 vs. December
2018
Notes
---
(1) Earnings for the three months
ended December 31, 2019
include: (i) a $70 million
pre-tax ($102 million
after- tax) increase for
the gain on the sale of Gulf
Power; (ii) a $24 million
pre-tax ($17 million after-
tax) impairment charge in
contemplation of the pending
sale of Pivotal LNG and
Atlantic Coast Pipeline; and
(iii) a net $7 million pre-
tax reduction to earnings
(net $2 million after-tax
increase to earnings) of
other acquisition,
disposition, and integration
impacts. Earnings for the
twelve months ended December
31, 2019 include: (i) a $2.6
billion pre-tax ($1.4
billion after-tax) gain on
the sale of Gulf Power; (ii)
a $23 million pre-tax ($88
million after-tax) gain on
the sale of Plant
Nacogdoches; and (iii) $18
million pre tax ($11 million
after tax) of other
acquisition, disposition,
and integration impacts,
partially offset by: (i) a
$58 million pre-tax ($52
million after-tax) net
loss, including impairment
charges, associated with the
sales of PowerSecure's
utility infrastructure
services and lighting
businesses and (ii) a $24
million pre-tax ($17
million after-tax)
impairment charge in
contemplation of the pending
sale of Pivotal LNG and
Atlantic Coast Pipeline.
Earnings for the three
months ended December 31,
2018 include: (i) a net
combined $27 million pre-
tax loss (net combined $15
million after-tax loss) to
reflect the final
adjustments for the sales of
Elizabethtown Gas, Elkton
Gas, Florida City Gas, and
Pivotal Home Solutions and
(ii) other acquisition,
disposition, and integration
costs of $31 million pre tax
($32 million after tax).
Earnings for the twelve
months ended December 31,
2018 include: (i) a net
combined $249 million pre-
tax gain ($93 million after-
tax loss) on the sales of
Elizabethtown Gas, Elkton
Gas, Florida City Gas, and
Pivotal Home Solutions,
including a related
impairment charge; (ii) a
$119 million pre-tax ($89
million after-tax)
impairment charge associated
with the sales of Plants
Stanton and Oleander; and
(iii) $95 million pre tax
($77 million after tax) of
other acquisition,
disposition, and integration
costs. Further impacts are
expected to be recorded in
2020 in connection with the
sale of Plant Mankato and
the pending sale of Pivotal
LNG and Atlantic Coast
Pipeline.
(2) Earnings for the three and
twelve months ended December
31, 2019 and 2018 include
charges, associated legal
expenses, and tax impacts
related to Mississippi
Power's integrated coal
gasification combined cycle
facility project in Kemper
County, Mississippi.
Additionally, the three and
twelve months ended December
31, 2018 include a $95
million credit to earnings
primarily resulting from the
reduction of a related state
income tax valuation
allowance. Mississippi Power
expects to substantially
complete mine reclamation
activities in 2020 and
dismantlement of the
abandoned gasifier-related
assets and site restoration
activities by 2024. The
additional pre-tax period
costs associated with these
activities, including
related costs for compliance
and safety, asset retirement
obligation accretion, and
property taxes, are
estimated to total $17
million in 2020, $15 to $16
million annually in 2021
through 2023, and $5 million
in 2024. Earnings for the
twelve months ended December
31, 2018 also include a $1.1
billion charge ($0.8 billion
after tax) for an estimated
probable loss on Georgia
Power's construction of
Plant Vogtle Units 3 and 4.
Further charges for Georgia
Power's Plant Vogtle Units 3
and 4 may occur; however,
the amount and timing of any
such charges are uncertain.
(3) Earnings for the three and
twelve months ended December
31, 2019 and 2018 include
Wholesale Gas Services
business results. Presenting
earnings and earnings per
share excluding Wholesale
Gas Services provides 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.
(4) Earnings for the twelve
months ended December 31,
2019 include a pre-tax
impairment charge of $91
million ($69 million after
tax) associated with a
natural gas storage facility
and earnings for the three
months ended December 31,
2019 include an adjustment
of $(1) million pre tax ($4
million after tax) of this
impairment charge.
Additionally, earnings for
the three and twelve months
ended December 31, 2019
include a pre-tax
impairment charge of $17
million ($13 million after
tax) related to a leveraged
lease. Additional impairment
charges associated with
other natural gas storage
facilities or this leveraged
lease investment may occur;
however, the amount and
timing of any such charges
are uncertain.
(5) Earnings for the twelve
months ended December 31,
2018 include the settlement
proceeds of Mississippi
Power's claim for lost
revenue resulting from the
2010 Deepwater Horizon oil
spill and earnings for the
three and twelve months
ended December 31, 2018
include additional net tax
benefits as a result of
implementing federal tax
reform legislation.
Additional proceeds or
adjustments are not
expected.
Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
Three Months Ended
Year-to-Date
December December
2019 2018 Change 2019 2018 Change
Income Account-
Retail Electric Revenues-
Fuel $
784 $
1,012 $
(228) $
3,591 $
4,283 $
(692)
Non-Fuel 2,164 2,297 (133) 10,493 10,939 (446)
Wholesale Electric Revenues 485 579 (94) 2,152 2,516 (364)
Other Electric Revenues 144 169 (25) 636 664 (28)
Natural Gas Revenues 1,131 1,048 83 3,792 3,854 (62)
Other Revenues 206 232 (26) 755 1,239 (484)
Total Revenues 4,914 5,337 (423) 21,419 23,495 (2,076)
Fuel and Purchased Power 977 1,334 (357) 4,438 5,608 (1,170)
Cost of Natural Gas 363 486 (123) 1,319 1,539 (220)
Cost of Other Sales 119 118 1 435 806 (371)
Non-Fuel O & M 1,712 1,672 40 5,600 5,889 (289)
Depreciation and Amortization 771 793 (22) 3,038 3,131 (93)
Taxes Other Than Income Taxes 299 325 (26) 1,230 1,315 (85)
Estimated Loss on Plants Under Construction 14 (8) 22 24 1,097 (1,073)
Impairment Charges 26 13 13 168 210 (42)
(Gain) Loss on Dispositions, net (57) 26 (83) (2,569) (291) (2,278)
Total Operating Expenses 4,224 4,759 (535) 13,683 19,304 (5,621)
Operating Income 690 578 112 7,736 4,191 3,545
Allowance for Equity Funds Used During 32 39 (7) 128 138 (10)
Construction
Earnings from Equity Method Investments 42 40 2 162 148 14
Interest Expense, Net of Amounts Capitalized 442 456 (14) 1,736 1,842 (106)
Other Income (Expense), net 13 (81) 94 252 114 138
Income Taxes (Benefit) (74) (149) 75 1,798 449 1,349
Net Income 409 269 140 4,744 2,300 2,444
Less:
Dividends on Preferred Stock of Subsidiaries 5 4 1 15 16 (1)
Net Income (Loss) Attributable to (36) (13) (23) (10) 58 (68)
Noncontrolling Interests
NET INCOME ATTRIBUTABLE TO $
440 $
278 $
162 $
4,739 $
2,226 $
2,513
SOUTHERN COMPANY
Notes
---
- Certain prior year data may have been reclassified to conform with current year presentation.
Southern Company
Kilowatt-Hour Sales
(In Millions of KWHs)
Three Months Ended December
As Reported
Adjusted(1)
2019 2018 Change Weather 2018 Change Weather
Adjusted Adjusted
Change Change
Kilowatt-Hour Sales-
Total Sales 46,185 49,539 (6.8) 46,943 (1.6)
% %
Total Retail Sales- 34,254 37,973 (9.8) (8.2) 35,529 (3.6) (2.1)
% % % %
Residential 10,738 12,475 (13.9) (9.7) 11,281 (4.8) (0.6)
%
% % %
Commercial 11,324 12,346 (8.3) (7.7) 11,510 (1.6) (1.1)
% % % %
Industrial 12,022 12,949 (7.2) (7.2) 12,542 (4.1) (4.1)
% % % %
Other 170 203 (16.3) (16.1) 196 (13.4) (13.1)
% % % %
Total Wholesale Sales 11,931 11,566 3.2 N/A 11,414 4.5
% % N/A
Year-to-Date December
As Reported
Adjusted(1)
2019 2018 Change Weather 2018 Change Weather
Adjusted Adjusted
Change Change
Kilowatt-Hour Sales-
Total Sales 196,488 212,144 (7.4) 200,353 (1.9)
% %
Total Retail Sales- 148,461 162,182 (8.5) (8.4) 151,049 (1.7) (1.8)
% % % %
Residential 48,528 54,590 (11.1) (10.7) 49,070 (1.1) (0.8)
% %
% %
Commercial 49,101 53,451 (8.1) (8.6) 49,623 (1.1) (1.6)
% % % %
Industrial 50,106 53,341 (6.1) (6.1) 51,584 (2.9) (2.9)
% % % %
Other 726 800 (9.1) (9.0) 772 (5.8) (5.7)
% % % %
Total Wholesale Sales 48,027 49,962 (3.9) N/A 49,304 (2.6)
% % N/A
Notes
---
(1) Kilowatt-hour sales comparisons to the prior year were significantly impacted by the disposition of Gulf Power
Company on January 1, 2019. These 2018 kilowatt-hour sales and changes exclude Gulf Power Company.
Southern Company
Customers
(In Thousands of Customers)
Period Ended December
2019 2018
Change
Regulated Utility Customers-
Total Utility Customers- 8,543 8,933 (4.4)%
Total Traditional Electric(1) 4,266 4,685 (8.9)%
Southern Company Gas 4,277 4,248 0.7%
Notes
---
(1) Includes approximately 463,000 customers at December 31, 2018 related to Gulf Power Company, which was
sold on January 1, 2019.
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
Three Months Ended
Year-to-Date
December December
2019 2018 % Change 2019 2018 % Change
Southern Company(1) -
Operating Revenues $
4,914 $
5,337 (7.9) $
21,419 $
23,495 (8.8)
%
%
Earnings Before Income Taxes 335 120 179.2 6,542 2,749 138.0
%
%
Net Income Available to Common 440 278 58.3 4,739 2,226 112.9
%
%
Alabama Power -
Operating Revenues $
1,363 $
1,316 3.6 $
6,125 $
6,032 1.5
% %
Earnings Before Income Taxes 67 96 (30.2) 1,355 1,236 9.6
% %
Net Income Available to Common 88 73 20.5 1,070 930 15.1
% %
Georgia Power -
Operating Revenues $
1,703 $
1,818 (6.3) $
8,408 $
8,420 (0.1)
%
%
Earnings Before Income Taxes 128 175 (26.9) 2,192 1,007 117.7
%
%
Net Income Available to Common 122 173 (29.5) 1,720 793 116.9
%
%
Mississippi Power -
Operating Revenues $
294 $
308 (4.5) $
1,264 $
1,265 (0.1)
%
%
Earnings Before Income Taxes 3 24 (87.5) 169 134 26.1
% %
Net Income Available to Common 149 (100.0) 139 235 (40.9)
% %
Southern Power(1) -
Operating Revenues $
411 $
506 (18.8) $
1,938 $
2,205 (12.1)
% %
Earnings (Loss) Before Income Taxes (28) (14) 100.0 273 82 232.9
%
%
Net Income (Loss) Available to Common 23 (48) (147.9) 339 187 81.3
% %
Southern Company Gas(1) -
Operating Revenues $
1,131 $
1,048 7.9 $
3,792 $
3,909 (3.0)
%
%
Earnings Before Income Taxes 307 67 358.2 715 836 (14.5)
% %
Net Income Available to Common 238 78 205.1 585 372 57.3
% %
Notes
---
- See Financial Highlights pages for discussion of certain significant items occurring during the periods presented.
(1)
Financial comparisons to the prior year were significantly impacted by (i) Southern Company Gas' disposition
of: (a) Pivotal Home Solutions on June 4, 2018, (b) Elizabethtown Gas and Elkton Gas on July 1, 2018, and
(c) Florida City Gas on July 29, 2018; (ii) the disposition of Southern Power Company's ownership interest in
(a) Plants Oleander and Stanton on December 4, 2018 and (b) Plant Nacogdoches on June 13, 2019; (iii)
Southern Power Company's sale of (a) a 33% equity interest in a limited partnership indirectly owning
substantially all of its solar facilities on May 22, 2018 and (b) a noncontrolling interest in its subsidiary
owning eight operating wind facilities on December 11, 2018; and (iv) Southern Company's disposition of
Gulf Power Company on January 1, 2019.
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SOURCE Southern Company
