01—Abstract
Summary
Summary of the 10-K filed February 20, 2019. Cited figures are marked; the original filing is the authoritative source.
Southern Company (SO) reported its 2018 annual results, highlighting a significant increase in consolidated net income to $2.2 billiona, largely driven by the absence of major charges incurred in 2017 related to the Kemper IGCC project.
However, this was partially offset by a $1.1 billionb charge in 2018 for the ongoing Plant Vogtle Units 3 & 4 construction. The company also completed several significant divestitures in 2018, including the sale of Gulf Power for approximately $5.8 billion and the sale of three natural gas distribution utilities by Southern Company Gas for approximately $2.3 billion. Southern Power also divested non-controlling interests in its solar and wind facilities, generating approximately $2.4 billion in proceeds.
These strategic moves indicate a focus on portfolio optimization and debt reduction. The company continues to navigate a complex regulatory environment, with significant capital expenditures planned for construction programs, including the ongoing Plant Vogtle nuclear project, and compliance with environmental regulations.
02—Key points
Key Highlights
- Southern Company reported consolidated net income of $2.2 billion for 2018, a substantial increase from $842 million in 2017, largely due to the absence of significant Kemper IGCC charges from the prior year.
- The company incurred a $1.1 billion pre-tax charge in 2018 related to the ongoing construction of Plant Vogtle Units 3 and 4, impacting profitability.
- Significant divestitures occurred in 2018, including the sale of Gulf Power for $5.8 billion and the sale of three natural gas distribution utilities by Southern Company Gas for approximately $2.3 billion.
- Southern Power completed the sale of non-controlling interests in its solar and wind facilities, generating approximately $2.4 billion in proceeds.
- The company is undertaking substantial construction programs, with projected capital expenditures totaling $8.0 billion for 2019, including significant investment in Plant Vogtle Units 3 and 4.
- Environmental compliance remains a key focus, with substantial capital expenditures planned for ash pond closure and monitoring, as well as ongoing efforts to meet air and water quality regulations.
- The company paid dividends per share of common stock of $2.38 in 2018, reflecting a consistent dividend payout history.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 20, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $23.50B$23.03B | +2.0% |
| Operating Expenses | $19.30B$20.70B | −6.7% |
| Operating Income | $4.19B$2.33B | +79.6% |
| Net Income | $2.23B$926.00M | +140.4% |
| EPS (Basic) | $2.18$0.84 | +159.5% |
| EPS (Diluted) | $2.17$0.84 | +158.3% |
| Shares Outstanding (Basic) | 1.02B1.00B | +2.0% |
| Shares Outstanding (Diluted) | 1.02B1.01B | +1.7% |
05—Questions
Frequently Asked Questions
What was Southern Company's net income for 2018?
Southern Company reported consolidated net income of $2.2 billion for the year ended December 31, 2018.
What were the major divestitures completed by Southern Company in 2018?
In 2018, Southern Company completed the sale of Gulf Power for approximately $5.8 billion and Southern Company Gas sold three of its natural gas distribution utilities for approximately $2.3 billion. Southern Power also sold non-controlling interests in its solar and wind facilities for approximately $2.4 billion.
What is the status of the Plant Vogtle Units 3 and 4 construction project?
Construction continues on Plant Vogtle Units 3 and 4, with expected in-service dates of November 2021 for Unit 3 and November 2022 for Unit 4. Georgia Power recorded a $1.1 billion pre-tax charge in Q2 2018 to reflect revised cost estimates and ongoing uncertainties regarding future rate recovery.
How did the Tax Reform Legislation impact Southern Company?
The Tax Reform Legislation, which reduced the federal corporate income tax rate to 21%, provided tax benefits to Southern Company. For 2018, Southern Company recorded lower federal income tax expense and benefits from the flowback of excess deferred income taxes. Several subsidiaries also implemented regulatory mechanisms to mitigate impacts on credit metrics.
06—Continue