8-K
Southern Co (SO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported) | July 30, 2020 | |||||
|---|---|---|---|---|---|---|
| Commission<br><br>File Number | Registrant,<br><br>State of Incorporation,<br><br>Address and Telephone Number | I.R.S. Employer<br><br>Identification No. | ||||
| --- | --- | --- | 1-3526 | The Southern Company | 58-0690070 | |
| --- | --- | --- |
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia
30308
(404) 506-5000
| 1-3164 | Alabama Power Company | 63-0004250 |
|---|
(An Alabama Corporation)
600 North 18th Street
Birmingham, Alabama
35203
(205) 257-1000
| 1-6468 | Georgia Power Company | 58-0257110 |
|---|
(A Georgia Corporation)
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia
30308
(404) 506-6526
| 001-11229 | Mississippi Power Company | 64-0205820 |
|---|
(A Mississippi Corporation)
2992 West Beach Boulevard
Gulfport, Mississippi
39501
(228) 864-1211
| 001-37803 | Southern Power Company | 58-2598670 |
|---|
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia
30308
(404) 506-5000
| 1-14174 | Southern Company Gas | 58-2210952 |
|---|
(A Georgia Corporation)
Ten Peachtree Place, N.E.
Atlanta, Georgia
30309
(404) 584-4000
The names and addresses of the registrants have not changed since the last report.
This combined Form 8-K is furnished separately by six registrants: The Southern Company, Alabama Power Company, Georgia Power Company, Mississippi Power Company, Southern Power Company and Southern Company Gas. Information contained herein relating to each registrant is furnished by each registrant solely on its own behalf. Each registrant makes no representation as to information relating to the other registrants.
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Registrant | Title of each class | Trading<br><br>Symbol(s) | Name of each exchange<br><br>on which registered |
|---|---|---|---|
| The Southern Company | Common Stock, par value $5 per share | SO | New York Stock Exchange |
| The Southern Company | Series 2015A 6.25% Junior <br>Subordinated Notes due 2075 | SOJA | New York Stock Exchange |
| The Southern Company | Series 2016A 5.25% Junior <br>Subordinated Notes due 2076 | SOJB | New York Stock Exchange |
| The Southern Company | Series 2017B 5.25% Junior <br>Subordinated Notes due 2077 | SOJC | New York Stock Exchange |
| The Southern Company | 2019 Series A Corporate Units | SOLN | New York Stock Exchange |
| The Southern Company | Series 2020A 4.95% Junior Subordinated Notes due 2080 | SOJD | New York Stock Exchange |
| Alabama Power Company | 5.00% Series Class A Preferred Stock | ALP PR Q | New York Stock Exchange |
| Georgia Power Company | Series 2017A 5.00% Junior <br>Subordinated Notes due 2077 | GPJA | New York Stock Exchange |
| Southern Power Company | Series 2016A 1.000% Senior Notes due 2022 | SO/22B | New York Stock Exchange |
| Southern Power Company | Series 2016B 1.850% Senior Notes due 2026 | SO/26A | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). (Response applicable to each registrant)
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition |
|---|
The information in this Current Report on Form 8-K, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibits attached hereto, shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
On July 30, 2020, The Southern Company (“Southern Company”) issued a press release regarding its earnings for the three-month and six-month periods ended June 30, 2020. A copy of this release is being furnished as Exhibit 99.01 to this Current Report on Form 8-K. In addition, certain additional information regarding the financial results for the three-month and six-month periods ended June 30, 2020 is being furnished as Exhibits 99.02 through 99.07 to this Current Report on Form 8-K.
Use of Non-GAAP Financial Measures
Exhibits 99.01, 99.02, 99.03 and 99.04 to this Current Report on Form 8-K include earnings and earnings per share in accordance with generally accepted accounting principles (“GAAP”) for the three-month and six-month periods ended June 30, 2020 and 2019. These exhibits also include earnings and earnings per share (1) for the three-month and six-month periods ended June 30, 2020 and 2019, excluding (a) acquisition and disposition impacts, (b) charges, associated legal expenses, and tax impacts related to plants under construction, and (c) earnings from the Wholesale Gas Services business and (2) for the three-month and six-month periods ended June 30, 2020, excluding an impairment charge associated with a leveraged lease investment. The attached exhibits include additional information regarding these excluded items, as well as reconciliations of each non-GAAP financial measure to the most comparable financial measure under GAAP. Southern Company believes the presentation of earnings and earnings per share, excluding these items, is useful to investors because it provides investors
1
with additional information to evaluate the performance of Southern Company’s ongoing business activities. Southern Company management also uses earnings and earnings per share, excluding the effect of these items, to evaluate the performance of Southern Company’s ongoing business activities. The presentation of this additional information is not meant to be considered a substitute for financial measures prepared in accordance with GAAP.
Exhibits
The exhibits hereto contain business segment information for Alabama Power Company, Georgia Power Company, Mississippi Power Company, Southern Power Company and Southern Company Gas. Accordingly, this report is also being furnished on behalf of each such registrant.
The following exhibits relate to the three-month and six-month periods ended June 30, 2020:
| Exhibit 99.01 | Press Release. |
|---|---|
| Exhibit 99.02 | Financial Highlights. |
| Exhibit 99.03 | Significant Factors Impacting EPS. |
| Exhibit 99.04 | EPS Earnings Analysis. |
| Exhibit 99.05 | Consolidated Earnings. |
| Exhibit 99.06 | Kilowatt-Hour Sales and Customers. |
| Exhibit 99.07 | Financial Overview. |
| Exhibit 104 | Cover Page Interactive Data File – The cover page iXBRL tags are embedded within the inline XBRL document. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: July 30, 2020 | THE SOUTHERN COMPANY | |
|---|---|---|
| By | /s/Ann P. Daiss | |
| Ann P. Daiss<br><br>Comptroller | ||
| ALABAMA POWER COMPANY<br><br>GEORGIA POWER COMPANY<br><br>MISSISSIPPI POWER COMPANY<br><br>SOUTHERN POWER COMPANY<br><br>SOUTHERN COMPANY GAS | ||
| By | /s/Melissa K. Caen | |
| Melissa K. Caen<br><br>Assistant Secretary |
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Exhibit
| Exhibit 99.01 | ||
|---|---|---|
| News | ||
| Media Contact: | Southern Company Media Relations | |
| 404-506-5333 or 1-866-506-5333 | ||
| www.southerncompany.com | ||
| Investor Relations Contact: | ||
| Scott Gammill | ||
| 404-506-0901 | ||
| sagammil@southernco.com | ||
| July 30, 2020 |
Southern Company reports second-quarter 2020 earnings
ATLANTA - Southern Company today reported second-quarter 2020 earnings of $612 million, or 58 cents per share, compared with $899 million, or 86 cents per share, in the second quarter of 2019. For the six months ended June 30, 2020, Southern Company reported earnings of $1.48 billion, or $1.40 per share, compared with earnings of $2.98 billion, or $2.86 per share, for the same period in 2019.
Excluding the items described in the “Net Income - Excluding Items” table below, Southern Company earned $822 million, or 78 cents per share, during the second quarter of 2020, compared with $833 million, or 80 cents per share, during the second quarter of 2019. For the six months ended June 30, 2020, excluding these items, Southern Company earned $1.65 billion, or $1.56 per share, compared with $1.56 billion, or $1.50 per share, for the same period in 2019.
| Non-GAAP Financial Measures | Three Months Ended June | Year-to-Date June | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Income - Excluding Items (in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||
| Net Income - As Reported | $ | 612 | $ | 899 | $ | 1,480 | $ | 2,982 | ||||
| Less: | ||||||||||||
| Acquisition and Disposition Impacts | — | (18 | ) | 38 | 2,481 | |||||||
| Tax Impact | — | 67 | (16 | ) | (1,122 | ) | ||||||
| Estimated Loss on Plants Under Construction | (152 | ) | (8 | ) | (155 | ) | (13 | ) | ||||
| Tax Impact | 39 | 2 | 40 | 3 | ||||||||
| Wholesale Gas Services | (31 | ) | 29 | — | 93 | |||||||
| Tax Impact | 8 | (6 | ) | — | (23 | ) | ||||||
| Asset Impairment | (154 | ) | — | (154 | ) | — | ||||||
| Tax Impact | 80 | — | 80 | — | ||||||||
| Net Income - Excluding Items | $ | 822 | $ | 833 | $ | 1,647 | $ | 1,563 | ||||
| Average Shares Outstanding - (in millions) | 1,058 | 1,044 | 1,057 | 1,041 | ||||||||
| Basic Earnings Per Share - Excluding Items | $ | 0.78 | $ | 0.80 | $ | 1.56 | $ | 1.50 |
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 second quarter 2020 were negatively impacted by a decline in sales from demand reduction related to the COVID-19 pandemic and mild weather, largely offset by diligent cost control and constructive state regulatory actions completed in 2019 at the company’s utilities.
“Despite the challenges of the COVID-19 pandemic, Southern Company and its subsidiaries have never taken a day off,” said Chairman, President and CEO Thomas A. Fanning. “Our electric and gas utilities have continued to provide clean, safe, reliable and affordable energy to customers while operating under appropriate health and safety protocols,” added Fanning. “Whether it’s our response to major storms in the Southeast or working within our communities to promote racial justice, we continue to deliver results, including continued progress on new nuclear construction.”
Second-quarter 2020 operating revenues were $4.62 billion, compared with $5.10 billion for the second quarter of 2019, a decrease of 9.4 percent. For the six months ended June 30, 2020, operating revenues were $9.64 billion, compared with $10.51 billion for the corresponding period in 2019, a decrease of 8.3 percent. These decreases were primarily due to lower fuel costs, milder weather and a sales decline from COVID-19 demand reduction.
Southern Company’s second-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. 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.
Exhibit
| Exhibit 99.02 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Page 1 | ||||||||||||
| Southern Company | ||||||||||||
| Financial Highlights | ||||||||||||
| (In Millions of Dollars Except Earnings Per Share) | ||||||||||||
| Three Months Ended<br>June | Year-to-Date<br>June | |||||||||||
| Net Income–As Reported (See Notes) | 2020 | 2019 | 2020 | 2019 | ||||||||
| Traditional Electric Operating Companies | $ | 645 | $ | 782 | $ | 1,287 | $ | 1,346 | ||||
| Southern Power | 63 | 174 | 138 | 230 | ||||||||
| Southern Company Gas | 71 | 106 | 346 | 376 | ||||||||
| Total | 779 | 1,062 | 1,771 | 1,952 | ||||||||
| Parent Company and Other | (167 | ) | (163 | ) | (291 | ) | 1,030 | |||||
| Net Income–As Reported | $ | 612 | $ | 899 | $ | 1,480 | $ | 2,982 | ||||
| Basic Earnings Per Share^1^ | $ | 0.58 | $ | 0.86 | $ | 1.40 | $ | 2.86 | ||||
| Average Shares Outstanding (in millions) | 1,058 | 1,044 | 1,057 | 1,041 | ||||||||
| End of Period Shares Outstanding (in millions) | 1,056 | 1,045 | ||||||||||
| Non-GAAP Financial Measures | Three Months Ended<br>June | Year-to-Date<br>June | ||||||||||
| Net Income–Excluding Items (See Notes) | 2020 | 2019 | 2020 | 2019 | ||||||||
| Net Income–As Reported | $ | 612 | $ | 899 | $ | 1,480 | $ | 2,982 | ||||
| Less: | ||||||||||||
| Acquisition and Disposition Impacts^2^ | — | (18 | ) | 38 | 2,481 | |||||||
| Tax Impact | — | 67 | (16 | ) | (1,122 | ) | ||||||
| Estimated Loss on Plants Under Construction^3^ | (152 | ) | (8 | ) | (155 | ) | (13 | ) | ||||
| Tax Impact | 39 | 2 | 40 | 3 | ||||||||
| Wholesale Gas Services^4^ | (31 | ) | 29 | — | 93 | |||||||
| Tax Impact | 8 | (6 | ) | — | (23 | ) | ||||||
| Asset Impairment^5^ | (154 | ) | — | (154 | ) | — | ||||||
| Tax Impact | 80 | — | 80 | — | ||||||||
| Net Income–Excluding Items | $ | 822 | $ | 833 | $ | 1,647 | $ | 1,563 | ||||
| Basic Earnings Per Share–Excluding Items | $ | 0.78 | $ | 0.80 | $ | 1.56 | $ | 1.50 | ||||
| -See Notes on the following page. |
| Exhibit 99.02 | |
|---|---|
| Page 2 | |
| Southern Company | |
| Financial Highlights | |
| Notes | |
| (1) | For the three and six months ended June 30, 2020 and 2019, dilution does not change basic earnings per share by more than $0.02 and is not material. |
| (2) | Earnings for the six months ended June 30, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Earnings for the three months ended June 30, 2019 primarily include a $23 million pre-tax ($88 million after-tax) gain on the sale of Southern Power Company's Plant Nacogdoches and a $32 million pre-tax and after-tax goodwill impairment charge in contemplation of the sale of the utility infrastructure services business unit of PowerSecure, Inc. Earnings for the six months ended June 30, 2019 also include a preliminary $2.5 billion pre-tax ($1.3 billion after-tax) gain on the sale of Gulf Power Company. |
| (3) | Earnings for the three and six months ended June 30, 2020 and 2019 include charges, associated legal expenses, and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Earnings for the three and six months ended June 30, 2020 also include a $149 million pre-tax ($111 million after-tax) charge for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4, which significantly impacted earnings and earnings per share. Mississippi Power Company expects to substantially complete mine reclamation activities in 2020 and dismantlement of the abandoned gasifier-related assets and site restoration activities in 2025. The additional pre-tax period and closure costs associated with these activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, are estimated to total up to $11 million for the remainder of 2020, $16 million in 2021, and $11 million to $13 million annually in 2022 through 2025. Further charges for Georgia Power Company's construction of 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 six months ended June 30, 2020 and 2019 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 three and six months ended June 30, 2020 include a pre-tax impairment charge of $154 million ($74 million after tax) related to a leveraged lease. |
Exhibit
| Exhibit 99.03 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Page 1 | ||||||||||||||
| Southern Company | ||||||||||||||
| Significant Factors Impacting EPS | ||||||||||||||
| Three Months Ended<br>June | Year-to-Date<br>June | |||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||
| Earnings Per Share– | ||||||||||||||
| As Reported^1^(See Notes) | $ | 0.58 | $ | 0.86 | $ | (0.28 | ) | $ | 1.40 | $ | 2.86 | $ | (1.46 | ) |
| Significant Factors: | ||||||||||||||
| Traditional Electric Operating Companies | $ | (0.13 | ) | $ | (0.05 | ) | ||||||||
| Southern Power | (0.11 | ) | (0.09 | ) | ||||||||||
| Southern Company Gas | (0.03 | ) | (0.03 | ) | ||||||||||
| Parent Company and Other | — | (1.27 | ) | |||||||||||
| Increase in Shares | (0.01 | ) | (0.02 | ) | ||||||||||
| Total–As Reported | $ | (0.28 | ) | $ | (1.46 | ) | ||||||||
| Three Months Ended<br>June | Year-to-Date<br>June | |||||||||||||
| Non-GAAP Financial Measures | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||
| Earnings Per Share– | ||||||||||||||
| Excluding Items (See Notes) | $ | 0.78 | $ | 0.80 | $ | (0.02 | ) | $ | 1.56 | $ | 1.50 | $ | 0.06 | |
| Total–As Reported | $ | (0.28 | ) | $ | (1.46 | ) | ||||||||
| Less: | ||||||||||||||
| Acquisition and Disposition Impacts^2^ | (0.05 | ) | (1.28 | ) | ||||||||||
| Estimated Loss on Plants Under Construction^3^ | (0.10 | ) | (0.10 | ) | ||||||||||
| Wholesale Gas Services^4^ | (0.04 | ) | (0.07 | ) | ||||||||||
| Asset Impairment^5^ | (0.07 | ) | (0.07 | ) | ||||||||||
| Total–Excluding Items | $ | (0.02 | ) | $ | 0.06 | |||||||||
| - See Notes on the following page. |
| Exhibit 99.03 | |
|---|---|
| Page 2 | |
| Southern Company | |
| Significant Factors Impacting EPS | |
| Notes | |
| (1) | For the three and six months ended June 30, 2020 and 2019, dilution does not change basic earnings per share by more than $0.02 and is not material. |
| (2) | Earnings for the six months ended June 30, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Earnings for the three months ended June 30, 2019 primarily include a $23 million pre-tax ($88 million after-tax) gain on the sale of Southern Power Company's Plant Nacogdoches and a $32 million pre-tax and after-tax goodwill impairment charge in contemplation of the sale of the utility infrastructure services business unit of PowerSecure, Inc. Earnings for the six months ended June 30, 2019 also include a preliminary $2.5 billion pre-tax ($1.3 billion after-tax) gain on the sale of Gulf Power Company. |
| (3) | Earnings for the three and six months ended June 30, 2020 and 2019 include charges, associated legal expenses, and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Earnings for the three and six months ended June 30, 2020 also include a $149 million pre-tax ($111 million after-tax) charge for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4, which significantly impacted earnings and earnings per share. Mississippi Power Company expects to substantially complete mine reclamation activities in 2020 and dismantlement of the abandoned gasifier-related assets and site restoration activities in 2025. The additional pre-tax period and closure costs associated with these activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, are estimated to total up to $11 million for the remainder of 2020, $16 million in 2021, and $11 million to $13 million annually in 2022 through 2025. Further charges for Georgia Power Company's construction of 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 six months ended June 30, 2020 and 2019 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 three and six months ended June 30, 2020 include a pre-tax impairment charge of $154 million ($74 million after tax) related to a leveraged lease. |
Exhibit
| Exhibit 99.04 | ||
|---|---|---|
| Page 1 | ||
| Southern Company | ||
| EPS Earnings Analysis | ||
| Description | Three Months Ended June <br>2020 vs. 2019 | Year-to-Date<br><br>June <br>2020 vs. 2019 |
| Retail Sales | $(0.09) | $(0.08) |
| Retail Revenue Impacts | 0.11 | 0.20 |
| Weather | (0.10) | (0.11) |
| Wholesale and Other Operating Revenues | 0.01 | — |
| Non-Fuel O&M | 0.05 | 0.06 |
| Depreciation and Amortization, Interest Expense, Other | (0.05) | (0.12) |
| Income Taxes | 0.05 | 0.10 |
| Total Traditional Electric Operating Companies | $(0.02) | $0.05 |
| Southern Power | (0.02) | (0.02) |
| Southern Company Gas | 0.01 | 0.04 |
| Parent and Other | 0.02 | 0.01 |
| Increase in Shares | (0.01) | (0.02) |
| Total Change in EPS (Excluding Items) | $(0.02) | $0.06 |
| Acquisition and Disposition Impacts^1^ | (0.05) | (1.28) |
| Estimated Loss on Plants Under Construction^2^ | (0.10) | (0.10) |
| Wholesale Gas Services^3^ | (0.04) | (0.07) |
| Asset Impairment^4^ | (0.07) | (0.07) |
| Total Change in EPS (As Reported) | $(0.28) | $(1.46) |
| - See Notes on the following page. |
| Exhibit 99.04 | |
|---|---|
| Page 2 | |
| Southern Company | |
| EPS Earnings Analysis | |
| Three and Six Months Ended June 2020 vs. June 2019 | |
| Notes | |
| (1) | Earnings for the six months ended June 30, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Earnings for the three months ended June 30, 2019 primarily include a $23 million pre-tax ($88 million after-tax) gain on the sale of Southern Power Company's Plant Nacogdoches and a $32 million pre-tax and after-tax goodwill impairment charge in contemplation of the sale of the utility infrastructure services business unit of PowerSecure, Inc. Earnings for the six months ended June 30, 2019 also include a preliminary $2.5 billion pre-tax ($1.3 billion after-tax) gain on the sale of Gulf Power Company. |
| (2) | Earnings for the three and six months ended June 30, 2020 and 2019 include charges, associated legal expenses, and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Earnings for the three and six months ended June 30, 2020 also include a $149 million pre-tax ($111 million after-tax) charge for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4, which significantly impacted earnings and earnings per share. Mississippi Power Company expects to substantially complete mine reclamation activities in 2020 and dismantlement of the abandoned gasifier-related assets and site restoration activities in 2025. The additional pre-tax period and closure costs associated with these activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, are estimated to total up to $11 million for the remainder of 2020, $16 million in 2021, and $11 million to $13 million annually in 2022 through 2025. Further charges for Georgia Power Company's construction of 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 six months ended June 30, 2020 and 2019 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 three and six months ended June 30, 2020 include a pre-tax impairment charge of $154 million ($74 million after tax) related to a leveraged lease. |
Exhibit
| Exhibit 99.05 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Southern Company | |||||||||||||||||
| Consolidated Earnings | |||||||||||||||||
| As Reported | |||||||||||||||||
| (In Millions of Dollars) | |||||||||||||||||
| Three Months Ended<br>June | Year-to-Date<br>June | ||||||||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||
| Income Account- | |||||||||||||||||
| Retail Electric Revenues- | |||||||||||||||||
| Fuel | $ | 676 | $ | 919 | $ | (243 | ) | $ | 1,353 | $ | 1,723 | $ | (370 | ) | |||
| Non-Fuel | 2,506 | 2,621 | (115 | ) | 4,907 | 4,900 | 7 | ||||||||||
| Wholesale Electric Revenues | 472 | 542 | (70 | ) | 889 | 1,041 | (152 | ) | |||||||||
| Other Electric Revenues | 168 | 161 | 7 | 320 | 331 | (11 | ) | ||||||||||
| Natural Gas Revenues | 636 | 689 | (53 | ) | 1,885 | 2,163 | (278 | ) | |||||||||
| Other Revenues | 162 | 166 | (4 | ) | 284 | 352 | (68 | ) | |||||||||
| Total Revenues | 4,620 | 5,098 | (478 | ) | 9,638 | 10,510 | (872 | ) | |||||||||
| Fuel and Purchased Power | 821 | 1,115 | (294 | ) | 1,638 | 2,135 | (497 | ) | |||||||||
| Cost of Natural Gas | 144 | 191 | (47 | ) | 583 | 877 | (294 | ) | |||||||||
| Cost of Other Sales | 74 | 84 | (10 | ) | 129 | 203 | (74 | ) | |||||||||
| Non-Fuel O&M | 1,203 | 1,320 | (117 | ) | 2,498 | 2,634 | (136 | ) | |||||||||
| Depreciation and Amortization | 873 | 755 | 118 | 1,730 | 1,506 | 224 | |||||||||||
| Taxes Other Than Income Taxes | 298 | 299 | (1 | ) | 629 | 628 | 1 | ||||||||||
| Estimated Loss on Plant Vogtle Units 3 and 4 | 149 | — | 149 | 149 | — | 149 | |||||||||||
| (Gain) Loss on Dispositions, net | — | (8 | ) | 8 | (39 | ) | (2,506 | ) | 2,467 | ||||||||
| Total Operating Expenses | 3,562 | 3,756 | (194 | ) | 7,317 | 5,477 | 1,840 | ||||||||||
| Operating Income | 1,058 | 1,342 | (284 | ) | 2,321 | 5,033 | (2,712 | ) | |||||||||
| Allowance for Equity Funds Used During Construction | 35 | 31 | 4 | 68 | 63 | 5 | |||||||||||
| Earnings from Equity Method Investments | 30 | 33 | (3 | ) | 72 | 81 | (9 | ) | |||||||||
| Interest Expense, Net of Amounts Capitalized | 444 | 429 | 15 | 900 | 859 | 41 | |||||||||||
| Impairment of Leveraged Lease | 154 | — | 154 | 154 | — | 154 | |||||||||||
| Other Income (Expense), net | 101 | 99 | 2 | 204 | 176 | 28 | |||||||||||
| Income Taxes | 5 | 145 | (140 | ) | 150 | 1,505 | (1,355 | ) | |||||||||
| Net Income | 621 | 931 | (310 | ) | 1,461 | 2,989 | (1,528 | ) | |||||||||
| Less: | |||||||||||||||||
| Dividends on Preferred Stock of Subsidiaries | 4 | 3 | 1 | 7 | 7 | — | |||||||||||
| Net Income (Loss) Attributable to Noncontrolling Interests | 5 | 29 | (24 | ) | (26 | ) | — | (26 | ) | ||||||||
| NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY | $ | 612 | $ | 899 | $ | (287 | ) | $ | 1,480 | $ | 2,982 | $ | (1,502 | ) | |||
| Notes | |||||||||||||||||
| - Certain prior year data may have been reclassified to conform with current year presentation. |
Exhibit
| Exhibit 99.06 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Southern Company | ||||||||||||
| Kilowatt-Hour Sales and Customers | ||||||||||||
| (In Millions of KWHs) | ||||||||||||
| Three Months Ended June | Year-to-Date June | |||||||||||
| 2020 | 2019 | Change | Weather Adjusted Change | 2020 | 2019 | Change | Weather Adjusted Change | |||||
| Kilowatt-Hour Sales- | ||||||||||||
| Total Sales | 43,547 | 48,434 | (10.1 | )% | 87,811 | 93,601 | (6.2 | )% | ||||
| Total Retail Sales- | 32,460 | 36,752 | (11.7 | )% | (7.5 | )% | 66,505 | 71,117 | (6.5 | )% | (3.7 | )% |
| Residential | 10,879 | 11,520 | (5.6 | )% | 4.7 | % | 21,745 | 22,421 | (3.0 | )% | 3.8 | % |
| Commercial | 10,531 | 12,386 | (15.0 | )% | (11.5 | )% | 21,470 | 23,372 | (8.1 | )% | (6.3 | )% |
| Industrial | 10,886 | 12,662 | (14.0 | )% | (14.0 | )% | 22,952 | 24,951 | (8.0 | )% | (8.0 | )% |
| Other | 164 | 184 | (11.3 | )% | (11.3 | )% | 338 | 373 | (9.4 | )% | (9.2 | )% |
| Total Wholesale Sales | 11,087 | 11,682 | (5.1 | )% | N/A | 21,306 | 22,484 | (5.2 | )% | N/A | ||
| (In Thousands of Customers) | ||||||||||||
| Period Ended June | ||||||||||||
| 2020 | 2019 | Change | ||||||||||
| Regulated Utility Customers- | ||||||||||||
| Total Utility Customers- | 8,580 | 8,477 | 1.2% | |||||||||
| Total Traditional Electric | 4,305 | 4,246 | 1.4% | |||||||||
| Southern Company Gas | 4,275 | 4,231 | 1.0% |
Exhibit
| Exhibit 99.07 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Southern Company | |||||||||||||
| Financial Overview | |||||||||||||
| As Reported | |||||||||||||
| (In Millions of Dollars) | |||||||||||||
| Three Months Ended<br>June | Year-to-Date<br>June | ||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||
| Southern Company^1, 2^ – | |||||||||||||
| Operating Revenues | $ | 4,620 | $ | 5,098 | (9.4 | )% | $ | 9,638 | $ | 10,510 | (8.3 | )% | |
| Earnings Before Income Taxes | 626 | 1,076 | (41.8 | )% | 1,611 | 4,494 | (64.2 | )% | |||||
| Net Income Available to Common | 612 | 899 | (31.9 | )% | 1,480 | 2,982 | (50.4 | )% | |||||
| Alabama Power – | |||||||||||||
| Operating Revenues | $ | 1,365 | $ | 1,513 | (9.8 | )% | $ | 2,716 | $ | 2,921 | (7.0 | )% | |
| Earnings Before Income Taxes | 395 | 388 | 1.8 | % | 762 | 671 | 13.6 | % | |||||
| Net Income Available to Common | 298 | 296 | 0.7 | % | 578 | 513 | 12.7 | % | |||||
| Georgia Power – | |||||||||||||
| Operating Revenues | $ | 1,928 | $ | 2,117 | (8.9 | )% | $ | 3,754 | $ | 3,951 | (5.0 | )% | |
| Earnings Before Income Taxes | 319 | 577 | (44.7 | )% | 665 | 970 | (31.4 | )% | |||||
| Net Income Available to Common | 308 | 448 | (31.3 | )% | 638 | 759 | (15.9 | )% | |||||
| Mississippi Power – | |||||||||||||
| Operating Revenues | $ | 283 | $ | 313 | (9.6 | )% | $ | 559 | $ | 600 | (6.8 | )% | |
| Earnings Before Income Taxes | 41 | 42 | (2.4 | )% | 79 | 86 | (8.1 | )% | |||||
| Net Income Available to Common | 39 | 37 | 5.4 | % | 71 | 74 | (4.1 | )% | |||||
| Southern Power^2^ – | |||||||||||||
| Operating Revenues | $ | 439 | $ | 510 | (13.9 | )% | $ | 814 | $ | 953 | (14.6 | )% | |
| Earnings Before Income Taxes | 74 | 152 | (51.3 | )% | 125 | 170 | (26.5 | )% | |||||
| Net Income Available to Common | 63 | 174 | (63.8 | )% | 138 | 230 | (40.0 | )% | |||||
| Southern Company Gas – | |||||||||||||
| Operating Revenues | $ | 636 | $ | 689 | (7.7 | )% | $ | 1,885 | $ | 2,163 | (12.9 | )% | |
| Earnings Before Income Taxes | 87 | 112 | (22.3 | )% | 441 | 459 | (3.9 | )% | |||||
| Net Income Available to Common | 71 | 106 | (33.0 | )% | 346 | 376 | (8.0 | )% | |||||
| Notes | |||||||||||||
| - See Financial Highlights pages for discussion of certain significant items occurring during the periods presented. | |||||||||||||
| (1) | Earnings comparisons to the prior year were significantly impacted by the preliminary gain associated with the sale of Gulf Power Company on January 1, 2019. | ||||||||||||
| (2) | Earnings and revenue comparisons to the prior year were significantly impacted by Southern Power Company's dispositions of Plant Nacogdoches on June 13, 2019 and Plant Mankato on January 17, 2020. |