Summary
Southern Company (SO) has filed its 2000 Annual Report on Form 10-K, detailing its operations and financial condition as of December 31, 2000. The report highlights a period of strong performance for its integrated Southeast utilities, driven by customer growth and increased energy sales, particularly in the residential and commercial sectors. The company is strategically positioning itself for evolving industry dynamics, including deregulation and competition, by investing in new businesses and expanding its wholesale energy operations through a new subsidiary, Southern Power Company (SPC). A significant event noted is the planned spin-off of Mirant Corporation (formerly Southern Energy, Inc.), which is reflected as discontinued operations in the financial statements. Management expresses confidence in the company's financial stability and its commitment to dividend growth, while acknowledging the potential impacts of regulatory changes, litigation, and evolving market conditions.
Key Highlights
- 1Record earnings for 2000, with adjusted earnings per share of $2.13, up from $1.90 in 1999, driven by growth in Southeast operations and competitive energy supply businesses.
- 2Mirant Corporation (formerly Southern Energy, Inc.) is classified as discontinued operations, with the spin-off to Southern Company stockholders approved and scheduled for April 2, 2001.
- 3Construction program budgeted at $2.9 billion for 2001, $2.6 billion for 2002, and $1.7 billion for 2003, including significant investments in wholesale generating capacity for Southern Power Company.
- 4Integrated Southeast Utilities experienced strong revenue growth, with retail base revenues up due to customer growth and positive weather impacts.
- 5The company is actively adapting to industry changes by evaluating strategic options including business combinations, acquisitions, and new ventures.
- 6Southern Company is expanding its market-based energy business by forming Southern Power Company (SPC) to own, manage, and finance wholesale generating assets, aiming for over 7,500 megawatts dedicated to wholesale by 2005.
- 7The company continues to manage market risks through derivative transactions and maintains strong financial condition, with a commitment to dividend growth.