Good afternoon. My name is Pema, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southern Company Third Quarter 2020 Earnings Call. All lines have been muted to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded... I would now like to turn the conference over to Mr. Scott Gammill, Investor Relations Director. Please go ahead, sir.

Thank you, Pema. Good afternoon and welcome to Southern Company’s third quarter 2020 earnings call. Joining me today are Tom Fanning, Chairman, President, and Chief Executive Officer of Southern Company; and Drew Evans, Chief Financial Officer. Let me remind you, we’ll be making forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements... I’ll turn the call over to Tom Fanning.

Thanks, Scott. Good afternoon. And thank you all for joining us. As you can see from the materials we released this morning, we reported strong adjusted results for the third quarter, ahead of the estimate provided on our last conference call. COVID-19 related demand impacts have moderated from the levels we experienced earlier this year... Let's turn now to an update on plant Vogel Units 3 and 4. Now we continue to utilize an aggressive site work plan for Unit 4 as a tool to provide margin to its regulatory approved in-service date of November 2022 with a current targeted in-service date of June 2022. From a cost perspective, Georgia Power share of the total project capital cost forecast is unchanged at $8.5 billion... We expect that all Unit 3 ITAAC and ICNs will be submitted and reviewed in a timely fashion to support Unit 3 fuel load.

Thanks, Tom, and good afternoon, everyone. I hope you all are well. As Tom mentioned, we had a very strong quarter. Third quarter adjusted EPS was $1.02 per share... Despite these headwinds, we have substantially mitigated both weather and COVID-19 impacts throughout 2020, allowing us to exceed our estimates on an adjusted basis in each of the first three quarters.

Thanks Drew. Adding to your comments and reinforcing the notion that Southern is the industry leader in research and development... will require an influx of advanced technology. So it's essential that we leverage collaboration to find and advance those next generation and transformational solutions. In closing, earlier today Georgia Power announced that Paul Bowers plans to retire concurrent with Unit 3 fuel load, expected in April 2021 after a remarkable 42 year career with Southern Company... So, we've already made some progress. In the days ahead, I know that we will continue our excellent track record of restoring service quickly and providing not only electricity, but hope to the communities we serve.

Absolutely. Our first question comes from the line of Julien Dumoulin-Smith with Bank of America. Please go ahead, sir.

Hey, good afternoon. This is Richie here for Julien. How are you doing?

Hey, Richie. Glad to have you as well.

All right. Thanks. I was just curious if you can provide a little bit of color comparing the timeline for the hot functional testing... but I'm just curious if you can provide a little context on the differences there?

Yeah, well, honestly, I think the 77 days I think appeared in a magazine article... So, let me just finish it with the folks that were there in China are on site here, and they have been constructive and endorse our plan as we put it forward.

Got it. That's very helpful. Appreciate the clarifying remarks there. And then just maybe turning over to Unit 4, I know you guys have indicated here that targeting June 2020, but in VCN 23, it looks like it's just slightly slipping behind the November schedule in terms of percentage complete per month.

Yeah, thanks Richie and in fact, it's really not off track, it's by plan. If you recall, when we went back to the onset of the COVID virus at the site...

Sort of, an odd concept and you probably shouldn't use the idea of reduced complexity when you're referring to a nuclear site. But I think it is completely fair to say that, as we move through Unit 3 construction, and move the principal focus to Unit 4, that will absolutely see improvements in -- in productivity over time.

Got it. That's very helpful. And then just one more if I can slip it in. I guess, in terms of the operational data points for Unit 3 between now hot functional testing, I know, there's some subcontractor work left to be done, but anything that we should be focusing on here in the next couple of months?

Yeah. I think there's kind of three things that I'm very mindful of right now. In terms of actual construction, I feel pretty good about that... It's a whole lot of myths that are involved in making sure we can get the hot functional test effectively. Those are the three things, like it's the same again, the paper, electrical and subcontractor performance.

All right. Perfect. Thanks very much.

You bet. Thank you.

Thank you for your question. Continuing on. Our next question comes from the line of Shar Pourreza with Guggenheim Partners. Please go ahead.

Hello, Shar.

Good morning. How are you guys doing?

Fantastic. How are you?

You sound like you're recovering fully. So that's good.

Yeah.

Absolutely.

Just a couple of quick questions here. So, you know, the cost contingency in this schedule cost margin came down to 18% from 20%... So just maybe, for us trying to assess if you're kind of on track or not over the next several months as we're trying to monitor the contingencies?

Yeah, I mean, look I think we'll get there in terms of everything we know about cost right now...

Yeah. There is the – that's a kind of schedule breaking, right?...

Got it. Perfect. Thank you for that. Just maybe just shifting from Vogel per second, just looking at the backdrop, obviously, you've narrowed your forecasts of load impact and the impact on revenues for the year, just maybe, how are you sort of thinking about the recovery into 2021 across the territory?

Yeah. So look, I guess in COVID here, we gave the estimate of 2.5% to 5% load reductions, I'm guessing now, revenue reduction... So that's kind of my expectation. Drew?

Yeah. The only nuance, I'd say is, we came out of the recovery a little bit – or came out of the pandemic from its depths a little bit faster than we anticipated... to revenue.

Yeah. And – let me just repeat that and a year over year all down, all the segments... I just misspoke on the call and said that chemicals was flat, chemicals was the only one down.

Got it.

The rest of the answer was okay.

Got it. Thank you. Just one last one for me, if I may, just shift to annoy and just thinking about Nicor. Obviously, the policy down there is a bit of a disaster.

Yeah. So certainly supportive of anything that the governor makes as a priority within Illinois.

Got it. Terrific. Thanks, guys. Congrats.

Thank you. Appreciate it.

Thank you for your question. Our next question comes from the line of Michael Weinstein with Credit Suisse. Please go ahead.

Hello, Mike. We're glad to have you.

Hi, guys. Hey, when do you think you'll be ready to quantify that higher expected earnings growth rate that you mentioned, after Vogel's in service?

Oh, listen, I think a lot of this is baked in. Let's just kind of -- we're going to get you great detail as we historically do in our end of year earnings call... our earnings per share growth rate goes way up.

Great. And thinking ahead, after the post election environment... and are you still willing to consider additional new nuclear construction?

Hey, Michael, not under my way. I want to finish up on a CapEx comment too on the last conversation, we just have it... And so my sense is the United States will continue.

One last thing I just wanted to say on the future of CapEx, in the future financial plan... leverage whatever means necessary.

Yeah. That's kind of what I was asking... I'll leave it there. I'll see to further questions. Okay. Thank you.

I think your answer to that question though, is relatively straightforward... we also have said that we'll do a very large continent of environmental remediation.

And I want to assure everybody on the call, when we come up with growth rates... And so therefore there's probably outside.

Thank you. Continuing on, our next question comes from the line of Angie Storozynski with Seaport Global. Please proceed.

Hello Angie, how are you?

Doing great. Thank you. Well, I have two questions. One is, so post 42 years at Georgia Power... So how, how should we think about it, the ongoing support for the project, given the elections and the management change at Georgia Power?

You bet. And thanks. And that's a natural question. So thank you for asking. Look, Paul turns 65 next year... He will do a terrific job.

Okay, thank you. My second question is, so we've always told us that there's going to be some a couple of weeks of additional work between the end of cold hydro testing and the beginning of hot functional testing.

Oh, Angie, no, nothing at all. The cold hydro testing went fabulous... It gives us more time to finish with the electrical.

Got it. And now completely changing topics... Should we think about it that once Vogel three is online, that's when you're ready to entertain any types of future growth through acquisitions?

Well, now, that's a loaded question... After that, we'll have lots of opportunities to consider things. But I would argue even after Vogel, we will still maintain that discipline.

Perfect. Thank you.

Thank you. Go ahead.

And thank you. Continuing on, our next question comes from line of Sophie Karp with KeyBanc. Please go ahead.

Hello, Sophie. How are you doing?

Hi. Good afternoon. All right. No complaints? Hope you guys are doing well also. Congrats on a strong quarter.

Thank you.

Well, a lot has been discussed already. But maybe if you could give us a little bit more kind of color on... So what are the factors that can push it sooner or later within that range that we should maybe follow, or think about?

Yeah. Sophie if it was me, I'm just giving you my judgment on this call right now. So I laid out three risk areas... I would really focus on that one right now.

Right. So it sounds like a cold hydro test went well... could be – could potentially delay hot functional test.

Sophie, no, it went great. In fact, when we finally ran the test... is the same again, the paper, electrical and subcontractor performance. So, let me just finish it with the folks that were there in China... endorsing the plan as we put it forward.

Got it. All right. Super helpful comments. Thank you so much appreciate it.

Always good talking to you. Thank you for being on with us.

Thank you. Continuing on our next question comes from the line of Jeremy Tonet with JPMorgan. Please go ahead.

Hi, Jeremy.

Hey, thanks for having me on here.

You bet.

Just want to just want to think about, you know, kind of look into the future a little bit for the period after Vogtle’s completion here.

Yeah, so let's start with the sort of the long term plan... It's going to be a great place to do business. And I think also, when you consider the role of batteries... we are going to need some material science advances, in order to make batteries a comprehensive solution.

Got it. Yeah, that's very helpful. Thanks for that.

You bet.

And then, kind of shifting gears here. Is there anything we should be thinking about in regards to potential changes on the Georgia commission as elections approach here?

Well, it's almost impossible to answer. I mean, look, this company has been designed over the years to thrive in any kind of administration at a federal level... whatever happens, we'll be fine.

Got it. That makes sense. Thank you very much.

You bet. Thank you.

Thank you. Our next question comes from the line of Andrew Weisel with Scotiabank. Please proceed with your question.

Thank you. Quick one here in terms of coal generation, the pie chart you show is really impactful and of course, consistent with the strategy toward decarbonisation.

Yeah. The premise of your question is 100% correct... The whole rep that is one plant.

Okay. Great. That's helpful. And then…

Did I get it? You bet.

Thank you. You've answered all my questions on Vogel, COVID-19. I wonder if I could just ask one sort of long range strategic question.

Yeah. Hey, Charles. I know I catch them great for this... That is, miniaturizing make, move and sell.

Okay.

Good to hear. So all I have left here is, I just wanted to follow-up you on PowerSecure.

Yeah, we've actually put a bright young guy in charge of the confluence of Southern Power, PowerSecure and the part of Southern Company Gas it's called Sequent. Now, here is the issue... Whatever those areas of weakness for some companies are areas of strength for our offering.

Okay. So there isn’t any significant drag or anything that we should be thinking.

No.

All right. Well, power grids are picking up. So, I mean, there's a lot – I mean, microgrids are picking up. So it sounds like there could be opportunity.

Hey. Hey, Paul, I guess you’re right. They just had I think their best quarter ever.

Good to hear. Thanks so much.

You bet. Thank you.

Thank you. And that will conclude today's question and answer session, Mr. Fanning, I will turn it to you once again for your closing remarks.

Hey, thanks everybody. What a great quarter, such exciting times to have the progress at Vogel 3 and 4. And, just for everybody's benefit, I asked Paul Bowers to join us... Any thanks everybody on the call. Great stuff. We’ll talk to you soon.

Well, thanks Tom. And I'll put context and the decision associated with retirement... So with that, and as we have disclosed that concurrent to us loading fuel in unit 3, we'll make the leadership change at Georgia Power, with a great leader under Chris Womack to take the reins as we move forward.

Okay. Hey, thanks, Paul. You've been a champion your whole career here. He’s been a great friend and an awesome leader for the Power. Any thanks everybody on the call. Great stuff. We’ll talk to you soon.

Thank you. Ladies and gentlemen this concludes The Southern Company third quarter 2020 earnings call. You may now disconnect. Thank you once again. Have a great day.