01—Abstract
Summary
Summary of the 10-K filed February 24, 2012. Cited figures are marked; the original filing is the authoritative source.
Southern Company (SO) reported its fiscal year 2011 results, showcasing a net income increase of $228 milliona compared to the prior year, primarily driven by Georgia Power's higher retail base revenues under its Alternative Rate Plan and the recovery of financing costs through its Nuclear Construction Cost Recovery tariff.
Southern Power also contributed with increased energy and capacity revenues. The company highlighted key performance indicators, including system customer satisfaction in the top quartile and a favorable Peak Season System Equivalent Forced Outage Rate (EFOR) for its fossil/hydro plants. Basic Earnings Per Share (EPS) for 2011 was $2.57b, an increase from $2.37 in 2010, with a targeted dividend payout ratio of approximately 70% of net income, which was achieved at 73% for 2011.
Significant construction programs are underway, notably Plant Vogtle Units 3 and 4 and the Kemper IGCC facility, which will contribute to future generation capacity. The company also faces considerable capital expenditure needs for environmental compliance with evolving regulations, such as the MATS rule, which could range from $13 billion to $18 billionc through 2021. Southern Company's financial health remains stable, supported by access to capital markets and ongoing operational efficiencies.
02—Key points
Key Highlights
- Southern Company reported a net income increase of $228 million for 2011 compared to 2010, reaching $2.214 billion after preferred dividends.
- Basic Earnings Per Share (EPS) rose to $2.57 in 2011 from $2.37 in 2010.
- Georgia Power's retail base revenues increased due to authorized rate adjustments and nuclear construction cost recovery.
- Southern Power saw increased energy and capacity revenues in its wholesale business.
- The company maintained strong customer satisfaction and system reliability in 2011.
- Significant capital investments are planned for environmental compliance and new generation resources, including Plant Vogtle Units 3 & 4 and the Kemper IGCC facility.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2011filed February 24, 2012Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $17.66B$17.46B | +1.2% |
| Operating Expenses | $13.43B$13.65B | −1.7% |
| Operating Income | $4.23B$3.80B | +11.3% |
| Net Income | $2.27B$2.04B | +11.2% |
| EPS (Basic) | $2.57$2.37 | +8.4% |
| EPS (Diluted) | $2.55$2.36 | +8.1% |
| Shares Outstanding (Basic) | 857.00M832.00M | +3.0% |
| Shares Outstanding (Diluted) | 864.00M837.00M | +3.2% |
05—Questions
Frequently Asked Questions
What was Southern Company's net income for fiscal year 2011?
Southern Company's net income after dividends on preferred and preference stock of subsidiaries was $2.214 billion for fiscal year 2011, an increase of $228 million from the prior year.
What are the major construction projects underway?
Southern Company is advancing significant construction projects, including Plant Vogtle Units 3 and 4, which are expected to reach commercial operation in 2016 and 2017, and the Kemper IGCC facility in Mississippi, which is expected to be operational in 2014.
How does Southern Company manage environmental compliance costs?
Southern Company anticipates substantial capital expenditures for environmental compliance, particularly related to the MATS rule and proposed water and coal combustion byproduct rules. These costs are estimated to range from $13 billion to $18 billion through 2021. The company's compliance strategy includes potential unit retirements, installation of additional environmental controls, and changes in fuel sources for certain units.
What is the outlook for Southern Company's dividend?
Southern Company has a history of consistent dividend payments, targeting a payout ratio of approximately 70% of net income. For 2011, the actual payout ratio was 73%, and the company declared a quarterly dividend of 47.25 cents per share in January 2012, marking the 257th consecutive quarter of a dividend equal to or higher than the previous quarter.
06—Continue