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SO · SOUTHERN CO

50 filings

10-Q

SO 10-Q Quarterly Reports

SOUTHERN CO - 50 quarterly reports

Filing record · 2016–202610-K1110-Q328-K206

SO filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 206 current reports (8-K) between 2016 and 2026.

  1. FY2018 annual report10-K · Feb ’19Feb ’19
  2. Leadership change8-K · Oct ’21Oct ’21
  3. Leadership change8-K · Jul ’25Jul ’25
  1. 2026-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2026

    Southern Company (SO) reported solid financial results for the six months ended June 30, 2026. Total operating revenues increased to $15.37 billion from $14.75 billion in the prior year period, driven by growth across its electric utilities and natural gas segments. Consolidated net income attributable to Southern Company rose to $2.53 billion, or $2.24 per diluted share, from $2.21 billion, or $2.01 per diluted share, in the same period last year. This performance reflects a combination of increased retail and wholesale electric revenues, higher natural gas revenues due to base rate adjustments, and improved contributions from equity method investments. The company also saw favorable impacts from decreased income taxes and lower interest expense in the current period. Operationally, the company is investing significantly in its infrastructure, with property additions totaling $6.64 billion in the first half of 2026, reflecting ongoing capital expenditure programs across its subsidiaries to enhance reliability and meet future demand. The company's balance sheet remains robust, with total assets increasing to $162.03 billion. Southern Company maintains a strong liquidity position with significant unused committed credit facilities, providing ample flexibility to fund ongoing operations and capital investments.

    Jul 30, 2026
  2. 2026-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2026

    Southern Company (SO) reported a net income of $1.36 billion for the first quarter of 2026, a slight increase from $1.33 billion in the same period of 2025, resulting in diluted earnings per share of $1.20 for Q1 2026 compared to $1.21 in Q1 2025. The company experienced an increase in total operating revenues to $8.40 billion from $7.78 billion year-over-year, driven by higher natural gas revenues and wholesale electric revenues. While fuel costs and purchased power expenses increased, they were largely offset by corresponding revenue adjustments. Significant capital expenditures were noted, particularly at Georgia Power for construction projects, and Southern Power continued development on wind repowering and natural gas facility upgrades.

    Apr 30, 2026
  3. 2025-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2025

    Southern Company (SO) reported solid financial results for the nine months ended September 30, 2025, with consolidated net income attributable to Southern Company increasing to $3.93 billion from $3.87 billion in the prior year period. This growth was driven by higher retail electric revenues across its operating companies, particularly at Georgia Power and Alabama Power, fueled by rate increases and improved sales volumes, including strong demand from industrial sectors like data centers. Operationally, the company has seen increased capital expenditures, notably at Georgia Power for infrastructure and generation projects totaling approximately $16.7 billion. Southern Company Gas also reported increased revenues and has been investing in infrastructure improvements. Southern Power's performance was impacted by accelerated depreciation on wind repowering projects, leading to lower net income for that segment, although overall operating revenues showed growth. The company has actively managed its financing, issuing new debt and repurchasing existing notes, while maintaining substantial unused credit facilities.

    Oct 30, 2025
  4. 2025-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2025

    Southern Company (SO) reported a decrease in consolidated net income attributable to Southern Company for the second quarter of 2025, falling to $880 million ($0.79 per diluted share) from $1.2 billion ($1.09 per diluted share) in the same period of 2024. Year-to-date, net income attributable to Southern Company was $2.21 billion ($2.00 per diluted share), down from $2.33 billion ($2.12 per diluted share) in the first half of 2024. This decline was primarily driven by higher non-fuel operations and maintenance expenses, increased depreciation and amortization, higher interest expenses, and increased income taxes across its segments. Despite the dip in net income, total operating revenues for the consolidated entity saw an increase, reaching $6.97 billion for the quarter, up from $6.46 billion in the prior year's second quarter. This revenue growth was supported by higher retail electric revenues, driven by rate increases and sales growth, particularly in the commercial and industrial sectors, as well as increased natural gas revenues due to base rate adjustments and higher commodity prices. Southern Power's revenues also saw an increase, largely from higher energy revenues related to increased natural gas prices. The company's significant capital expenditures continue, with a substantial portion allocated to construction programs across its subsidiaries to support future load growth and infrastructure upgrades.

    Jul 31, 2025
  5. 2025-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2025

    Southern Company (SO) reported a strong first quarter for 2025, with consolidated net income attributable to Southern Company rising by 18.2% to $1.334 billion, or $1.21 per diluted share, compared to $1.129 billion, or $1.03 per diluted share, in the first quarter of 2024. This growth was primarily driven by a significant increase in retail electric revenues, largely due to favorable rates and pricing adjustments, along with positive weather impacts. Wholesale electric revenues also saw a substantial increase of 30.3%, bolstered by higher energy revenues reflecting increased prices and volumes, particularly from natural gas and solar power purchase agreements (PPAs) at Southern Power. The company's operating expenses saw an increase, notably in fuel and purchased power, as well as other operations and maintenance expenses. However, the positive revenue performance, especially from rate increases and the inclusion of Plant Vogtle Unit 4 in Georgia Power's retail rates, more than compensated for these increased costs. Southern Company's financial position remains solid, supported by robust operating cash flows and substantial credit facilities, enabling continued investment in its construction programs.

    May 1, 2025
  6. 2024-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2024

    Southern Company (SO) reported a solid third quarter and first nine months of 2024, with consolidated net income attributable to Southern Company increasing to $1.535 billion ($1.40 per share) for the quarter and $3.867 billion ($3.53 per share) year-to-date, compared to $1.422 billion ($1.30 per share) and $3.121 billion ($2.86 per share) respectively in the prior year periods. This growth was primarily driven by increased retail electric revenues due to rate adjustments and the inclusion of Plant Vogtle Units 3 & 4 in Georgia Power's rate base, as well as favorable weather conditions in certain periods and increased other revenues. While total operating revenues saw a slight increase year-over-year, driven by the electric utility segments, the natural gas segment experienced a slight decrease. The company also reported increased interest expenses and other operating expenses, but these were effectively managed through revenue growth. Southern Company also made significant progress on its strategic initiatives, including the acquisition of the Lindsay Hill Generating Station by Alabama Power and continued construction on renewable energy projects by Southern Power, demonstrating a commitment to both regulated growth and future energy needs.

    Oct 31, 2024
  7. 2024-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2024

    Southern Company (SO) reported a strong second quarter and first half of 2024, driven by robust growth in retail electric revenues and improved performance across its utility segments. Total operating revenues increased to $6.46 billion for the quarter and $13.11 billion year-to-date, with significant contributions from higher retail electric revenues due to rate increases and favorable weather patterns. Net income attributable to Southern Company surged to $1.2 billion ($1.10 per diluted share) for the quarter and $2.3 billion ($2.12 per diluted share) year-to-date, marking substantial year-over-year improvements. This growth was supported by effective cost management, including lower operations and maintenance expenses and a notable credit related to Plant Vogtle completion costs. The company also demonstrated solid cash flow generation, with operating cash flow increasing significantly year-over-year. Southern Company's balance sheet remains solid, with ample liquidity through its bank credit arrangements, positioning it well for ongoing capital investments and operational needs.

    Aug 1, 2024
  8. 2024-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2024

    Southern Company (SO) reported strong financial performance for the first quarter of 2024, with consolidated net income attributable to Southern Company increasing by 31% to $1.13 billion, or $1.03 per diluted share, compared to $862 million, or $0.79 per diluted share, in the first quarter of 2023. This growth was driven by higher retail electric revenues, primarily due to rate adjustments and increased sales volume, as well as colder weather conditions impacting natural gas demand and revenues. The company's integrated operations across electric and gas utilities contributed to this performance, with significant contributions from Georgia Power and the natural gas distribution segment. Operationally, the company saw an increase in total operating revenues to $6.65 billion from $6.48 billion in the prior year period. While fuel and purchased power expenses decreased due to lower commodity prices and volumes, other operations and maintenance expenses and interest expenses saw an increase, largely attributable to investments in plant in service and higher interest rates. The company continues to manage its capital expenditures and financing activities effectively, with a strong focus on major construction projects like Plant Vogtle, which recently achieved initial criticality for Unit 4 and was placed in service on April 29, 2024, further impacting revenue streams from May 2024 onwards.

    May 2, 2024
  9. 2023-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2023

    Southern Company (SO) reported its third-quarter 2023 financial results, showing a slight decrease in net income attributable to common shareholders compared to the same period in the prior year. This was primarily driven by higher costs associated with the construction and start-up of Plant Vogtle Units 3 and 4, increased depreciation and amortization expenses, and higher interest expenses. These headwinds were partially offset by stronger retail electric revenues, particularly at Georgia Power and Alabama Power, due to warmer weather and favorable rate adjustments, as well as lower non-fuel operations and maintenance costs and reduced income tax expenses. For the first nine months of 2023, Southern Company's net income also saw a decline, largely impacted by the same factors that affected the third quarter, alongside milder weather in the early part of the year. Despite these pressures, the company's operating segments, including its regulated utilities and Southern Power, continue to generate substantial operating cash flows. Southern Company has also been active in managing its capital structure, issuing new debt while also repaying existing obligations. The company's long-term outlook remains focused on its ongoing construction projects, regulatory filings, and disciplined capital allocation to support its utility operations and growth initiatives.

    Nov 2, 2023
  10. 2023-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2023

    Southern Company (SO) reported a decrease in earnings for the second quarter and first half of 2023 compared to the same periods in 2022. This decline was primarily driven by lower retail and wholesale electric revenues, impacted by milder weather and lower fuel costs, as well as higher interest expenses. Despite these headwinds, the company saw increased revenues in natural gas operations due to rate increases and infrastructure investments, along with growth in other revenue streams like transmission and distributed infrastructure projects. The company made significant progress on its construction projects, particularly with Plant Vogtle Unit 3 reaching commercial operation and Unit 4 nearing its in-service date. However, the company continues to navigate complex legal and regulatory matters, including ongoing disputes related to Plant Vogtle's cost-sharing and tender provisions, which could lead to further charges. Financially, Southern Company and its subsidiaries actively managed their debt, issuing new senior notes and repaying existing ones. The company maintained substantial unused committed credit facilities, indicating continued access to liquidity. Overall, while facing some revenue pressures, SO demonstrated operational progress in key projects and maintained a solid financial footing.

    Aug 3, 2023
  11. 2023-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2023

    Southern Company (SO) reported its first quarter 2023 results, showing a decrease in consolidated net income attributable to Southern Company to $0.9 billion ($0.79 per share) from $1.0 billion ($0.97 per share) in the prior year period. This decline was primarily driven by higher depreciation and amortization expenses, lower retail electric revenues due to milder weather and a decrease in customer usage, and increased interest expenses. These factors were partially offset by rate increases and higher other revenues across its segments. The company is actively managing its capital expenditures and financing activities, including issuing convertible senior notes and maintaining strong credit facilities to support its ongoing construction programs, notably the progress at Plant Vogtle Units 3 and 4. The company's operational performance saw mixed results across its segments. While natural gas revenues and associated costs declined due to lower natural gas prices, this was largely offset by regulatory mechanisms that align recovered costs with expenses. Southern Power demonstrated increased net income due to a gain on the sale of spare parts and higher income from tax equity partnerships. Management remains focused on executing its growth strategy, managing costs, and navigating regulatory and economic conditions, including persistent inflation and rising interest rates, to maintain financial stability and deliver shareholder value.

    Apr 27, 2023
  12. 2022-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2022

    Southern Company (SO) reported a strong third quarter and year-to-date performance for 2022, driven by increased operating revenues across its electric and gas segments. Total operating revenues for the quarter rose to $8.4 billion, a significant increase from $6.2 billion in the prior year, and year-to-date revenues reached $22.2 billion, up from $17.3 billion in 2021. This growth was largely attributed to higher retail electric revenues, driven by rate increases and sales growth, as well as higher natural gas revenues due to rate adjustments and infrastructure investments. Net income attributable to Southern Company also saw a substantial increase, reaching $1.5 billion for the quarter and $3.6 billion year-to-date, up from $1.1 billion and $2.6 billion, respectively, in the prior year. This improvement was bolstered by reduced charges related to the Plant Vogtle construction project and favorable regulatory outcomes. Despite these positive financial results, investors should note the ongoing complexities and potential risks associated with the Plant Vogtle Units 3 and 4 construction. While Unit 3 is nearing completion and projected for service in early 2023, and Unit 4 in late 2023, there remain cost-sharing disputes with other Vogtle owners and potential for further schedule delays and cost increases. Southern Company's balance sheet reflects increased property, plant, and equipment and higher debt levels, largely due to ongoing capital investments across its subsidiaries. The company maintains significant unused credit facilities, indicating strong liquidity. Overall, Southern Company demonstrated robust operational and financial performance in the period, benefiting from higher energy prices and regulatory recoveries, while managing significant capital expenditure programs and ongoing project development. The company's focus remains on integrating new projects and navigating regulatory environments to ensure continued recovery of investments.

    Oct 27, 2022
  13. 2022-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2022

    Southern Company (SO) reported a significant increase in net income attributable to Southern Company for the six months ended June 30, 2022, reaching $2.14 billion, a substantial rise from $1.51 billion in the same period of 2021. This growth was largely driven by a notable reduction in after-tax charges related to the construction of Plant Vogtle Units 3 and 4, coupled with higher retail electric revenues across its operating companies, influenced by favorable rates, pricing, and warmer weather. Additionally, natural gas revenues saw a healthy increase due to rate adjustments and infrastructure investments. Despite the overall positive financial performance, the company faces ongoing challenges, particularly concerning the escalating costs and schedule uncertainties associated with Plant Vogtle Units 3 and 4. The company also experienced increased fuel and purchased power expenses due to higher commodity prices, though these are largely offset by cost recovery mechanisms. Investors should monitor the resolution of the Plant Vogtle project costs and potential regulatory changes impacting future earnings.

    Jul 28, 2022
  14. 2022-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2022

    Southern Company (SO) reported its first quarter 2022 financial results, showing a slight decrease in consolidated net income attributable to Southern Company to $1.032 billion, or $0.97 per share, down from $1.135 billion, or $1.07 per share, in the first quarter of 2021. This decline was primarily influenced by the prior year's inclusion of net income from the now-sold Sequent business and higher non-fuel operations and maintenance costs. Despite the dip in net income, total operating revenues saw a healthy increase, reaching $6.648 billion compared to $5.910 billion in the prior year's quarter, driven by higher retail electric revenues and substantial growth in natural gas revenues, reflecting increased sales volumes and higher commodity prices. Key operational drivers included improved performance across the traditional electric utilities, with Georgia Power reporting a notable increase in net income largely due to base tariff adjustments and the absence of a prior year charge related to Plant Vogtle. Southern Company Gas also demonstrated resilience, with gas distribution operations benefiting from rate increases and infrastructure investments, although overall net income was impacted by the sale of Sequent. Southern Power experienced a decrease in net income attributable to noncontrolling interests due to higher loss allocations in new partnerships, despite an overall increase in operating revenues driven by new natural gas PPAs and higher energy prices. Investors should note the ongoing significant capital expenditures, particularly for Georgia Power's Plant Vogtle Units 3 and 4, which continue to represent a substantial financial commitment and potential risk. The company's strong operating cash flows and access to credit facilities provide a solid financial foundation to manage these investments.

    Apr 28, 2022
  15. 2021-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2021

    Southern Company (SO) reported its third quarter and year-to-date results for 2021. For the nine months ended September 30, 2021, Southern Company reported a net income attributable to Southern Company of $2.6 billion, a slight decrease compared to $2.7 billion in the same period of 2020. This decrease was primarily driven by higher charges related to the construction of Plant Vogtle Units 3 and 4 at Georgia Power and increased non-fuel operations and maintenance costs, partially offset by growth in retail electric and natural gas revenues. The company's total operating revenues increased for both the quarter and the year-to-date period compared to 2020, supported by higher natural gas prices and increased customer usage following pandemic-related impacts in 2020. Financially, Southern Company's total assets grew to $127.9 billion at September 30, 2021, from $122.9 billion at December 31, 2020. Long-term debt increased to $48.8 billion from $45.1 billion, while total stockholders' equity also saw an increase to $33.2 billion from $32.2 billion. The company's liquidity remains solid with substantial unused committed credit arrangements. Key financial activities during the period included managing debt, capital expenditures for construction programs, and dividend payments.

    Nov 4, 2021
  16. 2021-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2021

    Southern Company (SO) reported mixed financial results for the six months ended June 30, 2021. While consolidated net income attributable to Southern Company increased slightly to $1.51 billion from $1.48 billion in the prior year, driven by higher retail and wholesale electric revenues, the second quarter results showed a significant decline. Consolidated net income attributable to Southern Company for the second quarter decreased to $372 million from $612 million in the prior year. This decline was primarily attributed to substantial after-tax charges related to the ongoing construction of Plant Vogtle Units 3 and 4 at Georgia Power, as well as an impairment charge at Southern Company Gas. The company's balance sheet reflects a notable increase in long-term debt, largely due to new issuances to support capital expenditures for construction programs, including Plant Vogtle. Southern Power's acquisition of the Deuel Harvest wind facility also contributed to increased property, plant, and equipment. Despite these investments and charges, Southern Company maintained a strong liquidity position with substantial unused committed credit facilities.

    Jul 29, 2021
  17. 2021-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2021

    Southern Company reported a strong first quarter of 2021, with consolidated net income attributable to Southern Company increasing by 30.8% to $1.1 billion ($1.07 per diluted share) compared to the same period in 2020. This growth was primarily driven by higher natural gas and retail electric revenues, influenced by colder weather conditions and increased volumes, although partially offset by higher natural gas costs. The company's diversified segments, including traditional electric utilities and natural gas distribution, demonstrated resilience. Key operational highlights include significant year-over-year growth in natural gas revenues (35.6%) and wholesale electric revenues (30.4%), reflecting robust demand and improved pricing. Despite ongoing challenges related to the COVID-19 pandemic impacting customer usage in some areas, the company's proactive management of regulatory matters and infrastructure investments are supporting stable financial performance. Investors should note the ongoing significant capital expenditures related to the Plant Vogtle Units 3 and 4 construction, which incurred an additional estimated loss provision, but remain a critical long-term growth driver.

    Apr 29, 2021
  18. 2020-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2020

    Southern Company's (SO) third-quarter 2020 results show a slight decrease in net income attributable to common shareholders, primarily due to milder weather impacting retail electric revenues and higher depreciation expenses, partially offset by lower income taxes and the absence of prior year impairment charges. For the nine months ended September 30, 2020, net income saw a significant decrease compared to the prior year, largely driven by the substantial gain on the sale of Gulf Power recorded in the first quarter of 2019. The company's core utilities, Alabama Power, Georgia Power, and Mississippi Power, experienced mixed results, with Georgia Power recording a notable charge related to the ongoing construction of Plant Vogtle Units 3 and 4. Southern Power continues its strategy of developing renewable energy projects, completing the acquisition of the Beech Ridge II wind facility and advancing construction on other wind and battery storage projects. Southern Company Gas reported improved net income year-over-year, benefiting from base rate increases and infrastructure investments, though wholesale gas services faced headwinds from lower commercial activity and derivative losses. Southern Company managed its liquidity effectively amidst the COVID-19 pandemic, with temporary measures to support customers being implemented. The company's significant capital expenditures are largely directed towards construction programs, including the ongoing development of Plant Vogtle. While the company is navigating economic disruptions from the pandemic, its regulated nature and cost recovery mechanisms provide some stability. Investors should monitor the progress and cost management of the Plant Vogtle project, as well as the evolving impact of the COVID-19 pandemic on customer demand and operational costs.

    Oct 29, 2020
  19. 2020-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2020

    Southern Company (SO) reported a decline in net income for the first six months of 2020 compared to the same period in 2019. This decrease was primarily driven by a significant gain on the sale of Gulf Power in the prior year, coupled with the impact of the COVID-19 pandemic on retail electric revenues. Despite a decrease in total operating revenues, the company demonstrated resilience through cost containment measures and favorable regulatory adjustments. Notably, Georgia Power recorded a substantial charge related to the ongoing construction of Plant Vogtle Units 3 and 4, reflecting revised cost forecasts and the impact of COVID-19 on project productivity. Operationally, Southern Company experienced mixed results across its segments. While retail electric revenues saw a decline due to milder weather and lower customer usage impacted by the pandemic, wholesale electric and natural gas revenues also decreased, influenced by lower commodity prices and reduced demand. The company continues to manage its financial position through disciplined capital deployment and remains focused on long-term growth strategies, particularly in renewable energy through Southern Power and infrastructure improvements in its gas distribution segment.

    Jul 30, 2020
  20. 2020-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2020

    Southern Company (SO) reported a significant decrease in consolidated net income attributable to Southern Company for the first quarter of 2020, down to $0.87 billion from $2.08 billion in the prior year period. This decline was primarily driven by the $2.5 billion gain on the sale of Gulf Power recognized in the first quarter of 2019. Excluding this one-time item, core operating performance showed mixed results across segments, with lower natural gas revenues due to price and volume decreases, partly offset by a slight increase in retail electric revenues driven by rate changes and customer growth. The company's operating expenses, particularly fuel and purchased power, saw a notable decrease due to lower energy prices and volumes. However, depreciation and amortization expenses increased, primarily at Georgia Power due to regulatory asset amortization and higher depreciation rates. The company continues to manage its debt and liquidity, with increased short-term borrowings and cash on hand as a precautionary measure amidst the COVID-19 pandemic's economic impacts. Georgia Power's Plant Vogtle construction remains a significant capital undertaking, with efforts underway to mitigate COVID-19 impacts on schedule and budget.

    Apr 30, 2020
  21. 2019-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2019

    Southern Company's Q3 2019 10-Q shows a quarter and year-to-date period dominated by the January 1, 2019 sale of Gulf Power to NextEra Energy (about $5.8 billion cash, less $1.3 billion of assumed debt), which produced a preliminary pre-tax gain of $2.5 billion ($1.3 billion after tax). As a result, year-to-date net income attributable to Southern Company rose to $4.3 billion ($4.12 per share) from $1.9 billion ($1.92 per share) a year earlier, though this headline growth is distorted by the one-time gain and by the prior-year $1.1 billion pre-tax Plant Vogtle Units 3 and 4 charge. Third-quarter net income was $1.3 billion ($1.26 per share), up 13% from $1.2 billion, helped by Alabama Power bill-credit timing, warmer weather and higher commercial and industrial pricing at Georgia Power. Underlying demand remains soft: weather-adjusted residential and commercial KWH sales fell year over year, and retail electric revenues dropped 6.5% year to date. The main risks are Plant Vogtle Units 3 and 4 and the regulatory and legal matters around them. Expected in-service dates remain November 2021 (Unit 3) and November 2022 (Unit 4), with total project cost forecast at $8.4 billion for Georgia Power's share, and the Georgia Court of Appeals issued an adverse-to-Georgia Power opinion on a procedural question. Other pressures include the Kemper County investigation, the Mississippi Power abandonment and CO2 pipeline decision, the pending Plant Mankato sale (which the Minnesota commission denied), and the ACE Rule and ash pond (CCR) closure costs, including about $312 million in new Alabama Power ARO increases. Management is growing capacity, with Alabama Power seeking a CCN for roughly 2,400 MW of need and a $1.1 billion investment program, and Georgia Power's 2019 base rate case requests $560 million for 2020, with a final order expected in December 2019. Balance sheet and liquidity look stable. Southern Company ended the quarter with $2.9 billion of cash and $3.9 billion of notes payable and current maturities, and it issued $1.725 billion of equity units in August 2019. Operating cash flow was $4.9 billion year to date, down $0.7 billion, with the decline attributed to timing of vendor payments and the disposition impacts. Book value per share was $26.23 against a market price of $61.77, a market-to-book ratio of 235%.

    Oct 30, 2019
  22. 2019-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2019

    Southern Company's Q2 2019 10-Q shows a quarter reshaped by the January 1, 2019 sale of Gulf Power to NextEra Energy (aggregate cash price about $5.8 billion, less $1.3 billion of assumed debt) and a sharp swing from the prior-year Plant Vogtle Units 3 and 4 charge. Consolidated net income attributable to Southern Company was $899 million ($0.86 per share) for the second quarter 2019, versus a net loss of $154 million in the second quarter 2018. Year-to-date net income was $2.98 billion ($2.86 per share), boosted by a preliminary $2.5 billion pre-tax ($1.3 billion after tax) gain on the Gulf Power sale. Underlying operating trends were softer: retail electric revenues fell 9.4% year-to-date, driven largely by the Gulf Power disposition, and weather-adjusted residential and commercial KWH sales declined. Operating cash flow dropped to $2.5 billion year-to-date from $3.3 billion, reflecting the disposition and timing of vendor payments. The key forward-looking items are Plant Vogtle Units 3 and 4, where the total project capital cost forecast was confirmed at $8.4 billion with in-service dates of November 2021 (Unit 3) and November 2022 (Unit 4), and rate-case activity. Georgia Power filed a base rate case seeking increases of $563 million, $145 million, and $234 million over 2020 to 2022, and Atlanta Gas Light and Nicor Gas have pending cases. Other risks include a June 2019 ARO increase of about $308 million at Alabama Power tied to coal ash closures, a pending Mankato sale to Northern States Power, and an ongoing Kemper County investigation by the Department of Justice that could have a material impact. Financially, the company remains leveraged and relies on short-term funding: current liabilities exceeded current assets by $2.6 billion, notes payable totaled $1.4 billion, and approximately $3.1 billion of long-term debt matures through June 2020. Book value was $25.73 per share against a $55.28 market price, a market-to-book ratio of about 215%. Investors should watch whether the Vogtle schedule holds, how the rate cases resolve, and whether the proceeds from asset sales are redeployed or used to reduce debt.

    Jul 31, 2019
  23. 2019-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2019

    Southern Company's first quarter 2019 results were dominated by the January 1, 2019 completion of the sale of Gulf Power to NextEra Energy, which produced a preliminary pre-tax gain of $2.5 billion ($1.3 billion after tax). As a result, consolidated net income attributable to Southern Company rose to $2.1 billion ($2.01 per diluted... basic share) from $938 million ($0.93) a year earlier, though this reflects a one-time gain rather than improved underlying operations. Excluding the gain, results were pressured by milder weather, lower retail revenues (down 13.6% to $3.1 billion), lower wholesale and other revenues, and the Southern Company Gas dispositions, which reduced natural gas revenues and earnings contribution. Balance sheet and cash flow picture: operating cash flow fell to $744 million from $1.5 billion, mainly on timing of vendor payments. Investing cash flow was positive at $2.5 billion because of $4.4 billion in disposition proceeds, while financing cash flow was negative $3.4 billion as the company repaid short-term bank debt, retired about $2.4 billion of long-term debt, and paid $623 million in common dividends. Total assets declined to $114.1 billion. Management describes financial condition as stable, and the company repurchased or redeemed higher-cost notes during the quarter. Key forward-looking items include Plant Vogtle Units 3 and 4 (Georgia Power owns 45.7%), where the cost and schedule validation confirmed the $8.4 billion total project capital cost forecast with in-service dates of November 2021 and November 2022. Pending sales of Plant Mankato (about $650 million) and the Nacogdoches biomass facility ($460 million) are expected to close in mid-2019. Rate cases are pending at Georgia Power, Atlanta Gas Light, and Nicor Gas, and a Department of Justice investigation related to the Kemper County energy facility was disclosed on April 29, 2019, which management says could have a material impact.

    May 1, 2019
  24. 2018-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2018

    Southern Company's third-quarter 2018 10-Q shows a quarter swinging to profit on lower federal taxes, warmer weather and gains from asset sales, while the underlying utility story remains dominated by Plant Vogtle Units 3 and 4 cost overruns and the pending sale of Gulf Power. Net income attributable to Southern Company was $1.16 billion ($1.13 diluted EPS) for the quarter, up from $1.07 billion a year earlier, and $1.95 billion year-to-date versus $347 million in 2017, when the Kemper IGCC charges were recorded. Year-to-date results for 2018 are not comparable to 2017 because of the $1.1 billion pre-tax Vogtle charge in Q2 2018 and $317 million of net gains on Southern Company Gas dispositions. The balance sheet reflects a major portfolio reshaping: Southern Company Gas sold Elizabethtown Gas, Elkton Gas, Florida City Gas and Pivotal Home Solutions, Southern Power sold a 33% stake in its solar fleet for about $1.2 billion, and Gulf Power ($5.75 billion sale to NextEra, expected Q1 2019) and additional Southern Power assets are classified as held for sale. Liquidity is adequate with $1.8 billion of cash and about $8.1 billion of undrawn committed credit, though current liabilities exceed current assets by $3.6 billion, driven by $3.0 billion of maturing debt. Management describes financial condition as stable, but key risks include Vogtle cost recovery and further cost increases, the Georgia PSC appeals, Hurricane Michael repair costs of $475–$550 million combined across Georgia and Gulf Power, and ARO increases for coal ash closure. For investors, the central questions are the realized value of the asset sales relative to the cash returned to the parent, the trajectory of the Vogtle project (with an estimated $4.1 billion remaining to complete), and whether credit metrics recover after Tax Reform and the Vogtle charge, given downgrades at Georgia Power to Baa1 by Moody's and A- by Fitch.

    Nov 7, 2018
  25. 2018-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2018

    Southern Company's Q2 2018 10-Q shows a quarter dominated by a $1.1 billion pre-tax charge (about $0.8 billion after tax) at Georgia Power for an estimated probable loss on Plant Vogtle Units 3 and 4. Consolidated net loss attributable to Southern Company was $(154) million, or $(0.15) per share, versus a $(1.4) billion loss in Q2 2017 that included the Kemper IGCC charges. For the first half of 2018, net income attributable to Southern Company was $784 million ($0.77 per share), compared with a $(723) million loss a year earlier. Underlying operations were supported by weather-driven retail revenue gains and lower federal income tax expense from the Tax Reform Legislation, partly offset by the Vogtle charge, a $119 million Southern Power impairment tied to the pending Florida Plants sale, and higher interest expense. The bigger strategic story is portfolio repositioning and balance sheet stress management. Southern agreed to sell Gulf Power to NextEra Energy for $5.75 billion before debt, expected to close in the first half of 2019. Southern Company Gas completed sales of Pivotal Home Solutions and, after quarter-end, Elizabethtown Gas, Elkton Gas and Florida City Gas, with gains expected in Q3. Southern Power sold a 33% interest in its solar partnership for about $1.2 billion. Management is also de-leveraging: Alabama Power targets a roughly 55% equity ratio by 2025, and several PSCs approved capital structure adjustments to offset Tax Reform credit pressure. Key risks for investors are the Vogtle project. Holders of at least 90% of ownership interests must vote to continue construction, expected in Q3 2018, and failure could lead to cancellation with a material impact. Further cost overruns are not assured of recovery, and the Georgia PSC appeals and the leveraged lease exposure add uncertainty. Other items include the CCR-driven ARO increases of about $1.5 billion at Alabama Power and Georgia Power's ash pond liabilities, plus ongoing Kemper-related litigation.

    Aug 8, 2018
  26. 2018-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2018

    Southern Company's first-quarter 2018 10-Q shows a sharp rebound in earnings: consolidated net income attributable to Southern Company rose to $938 million ($0.93 per diluted-basic share, $0.92 diluted) from $658 million ($0.66) a year earlier, a 42.6% increase. The gain was driven mainly by a lower federal income tax rate under the Tax Reform Legislation, a $50 million net state tax benefit from reorganizing Southern Power's solar entities, and colder weather that lifted retail electric and wholesale revenues. These benefits were partly offset by regulatory refunds and liabilities tied to tax reform, a $42 million goodwill impairment at Southern Company Gas, and a $44 million Kemper IGCC closure charge. The balance sheet and financing picture remains a key watch item. Total assets were $111.6 billion, and current liabilities exceeded current assets by $4.1 billion, driven by $3.2 billion of debt due within a year and $4.3 billion of notes payable. Operating cash flow improved to $1.5 billion from $0.9 billion, while capital spending of roughly $1.8 billion pushed net investing outflows to $2.0 billion. Management describes financial condition as stable, but Fitch downgraded Southern Company's senior unsecured rating to BBB+ in February 2018, and collateral exposure and credit-metric pressure from tax reform remain flagged risks. Growth and strategic initiatives are also significant. Plant Vogtle Units 3 and 4 remain the largest construction project, with in-service targets of November 2021 and November 2022 and a Georgia Power cost forecast of $7.3 billion net of Toshiba settlement proceeds. Southern Company Gas agreed to sell Elizabethtown Gas and Elkton Gas for $1.7 billion and Pivotal Home Solutions for about $365 million, with completion expected in 2018. Ongoing litigation tied to the Kemper County energy facility, including a securities class action and shareholder derivative suits, continues, though a portion of the securities claims was dismissed in March 2018.

    May 2, 2018
  27. 2017-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2017

    Southern Company's Q3 2017 10-Q shows a sharp deterioration in reported earnings driven almost entirely by the Kemper IGCC. Consolidated net income attributable to Southern Company was $347 million ($0.35 per diluted share) for the first nine months of 2017, down from $2.25 billion ($2.38 per diluted share) a year earlier, after Mississippi Power took pre-tax charges of $3.2 billion for estimated probable losses on the Kemper IGCC. The company stopped operations on the gasifier portion of the plant in June 2017 because cost recovery for those assets is no longer considered probable. Excluding Kemper, the underlying business was more stable: Southern Company Gas contributed $299 million of additional net income year over year (reflecting a full nine months after the July 2016 Merger), and Southern Power and the traditional electric utilities saw mixed results from weather, solar investment tax credits, and rate increases. Balance sheet and liquidity are the key watch items. Long-term debt rose to about $44 billion (about $47 billion including amounts due within one year), current liabilities exceeded current assets by $3.4 billion, and total common equity fell to $24.1 billion as retained earnings declined. Operating cash flow was solid at $5.3 billion year to date. Management describes financial condition as stable and notes ample committed bank credit ($8.1 billion of unused facilities across the system). Forward-looking uncertainties are substantial. Plant Vogtle Units 3 and 4 face higher costs and schedule extensions after the EPC Contractor's bankruptcy, with Georgia Power estimating about $1.41 billion of additional cost, and the Georgia PSC decision is due by February 2018. Toshiba's guarantee obligations of $3.68 billion carry collection risk given Toshiba's going-concern doubts. The Mississippi PSC is expected to rule on a Kemper settlement in January 2018, and an SEC investigation, securities class actions, and shareholder derivative suits remain pending. Potential federal tax reform could also materially affect the company.

    Nov 1, 2017
  28. 2017-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2017

    Southern Company's Q2 2017 10-Q is dominated by a large non-cash charge tied to the Kemper IGCC plant at Mississippi Power. The company reported a consolidated net loss attributable to Southern Company of $(1.38) billion, or $(1.38) per share, for the second quarter of 2017, compared with net income of $623 million ($0.67 per share) a year earlier. Year-to-date, the net loss was $(723) million versus net income of $1.1 billion in 2016. The swing was driven by $3.0 billion of pre-tax Kemper charges in the quarter, including a $2.8 billion write-off of the gasification portions of the plant after the Mississippi PSC signaled it would not allow further rate increases for the project and Mississippi Power moved to suspend gasifier start-up. Partly offsetting this, Southern Company Gas (acquired July 1, 2016) contributed $288 million of year-to-date net income, and Southern Power and the regulated utilities showed modest growth. The balance sheet and liquidity picture is more stressed. Total common stockholders' equity fell to $23.4 billion from $24.8 billion at year-end, and the book value per share was $23.38 against a June 30 market price of $47.88. Current liabilities exceeded current assets by $3.9 billion, reflecting $3.3 billion of notes payable and $3.0 billion of debt maturing within a year. Long-term debt rose to $43.9 billion. Operating cash flow of $2.7 billion for the first half was up $0.6 billion, but investing outflows of $4.9 billion were heavy. Mississippi Power now relies on Southern Company for financial support, and its financial statements presume a going-concern basis based on that anticipated support. The Plant Vogtle Units 3 and 4 nuclear project, where Georgia Power is the largest owner at 45.7%, is a second major risk. The EPC contractor (Westinghouse) filed for Chapter 11 in March 2017. A June 2017 settlement lets the owners collect $3.68 billion in Toshiba guarantee obligations (Georgia Power's share about $1.7 billion), but Toshiba's going-concern doubts make collection uncertain. Preliminary estimates imply $1.0 to $1.7 billion of additional net capital costs for Georgia Power, with a final assessment due in the August 2017 VCM filing. Investors should weigh the Kemper write-off, the Vogtle uncertainty, and the rising leverage against the company's core regulated earnings base.

    Aug 2, 2017
  29. 2017-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2017

    Southern Company's first-quarter 2017 10-Q shows a company in transition: the Southern Company Gas merger (closed July 1, 2016) now consolidates a large natural gas business, lifting revenue to $5.77 billion from $3.99 billion and net income attributable to Southern Company to $658 million ($0.66 per diluted share) from $489 million ($0.53). Much of the increase reflects Southern Company Gas earnings ($239 million), offset by higher interest expense ($416 million, up 69%) tied to merger and growth-related debt, and a $108 million pre-tax charge for Kemper IGCC cost overruns. The most material risk for investors is Plant Vogtle Units 3 and 4. Westinghouse and WECTEC filed for Chapter 11 on March 29, 2017, and Georgia Power and the other Vogtle Owners now believe the Contractor's forecast in-service dates (December 2019 and September 2020) are not achievable. Management states the bankruptcy is expected to have a material impact on construction cost, schedule, and cost recovery, and that Toshiba's guarantee may be insufficient. Kemper IGCC remains a separate overhang, with Mississippi Power facing a June 3, 2017 rate case filing, a cumulative $2.87 billion of cost-cap charges, and an SEC investigation. Liquidity is adequate but leverage and credit pressure rose: current liabilities exceeded current assets by $3.9 billion, mainly from $3.3 billion of debt due within a year, and S&P moved the outlook to negative and Moody's downgraded Mississippi Power to Ba1. Cash from operations was $897 million, and the company ended the quarter with $1.1 billion of cash and $8.3 billion of unused committed credit.

    May 3, 2017
  30. 2016-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2016

    Southern Company's Q3 2016 10-Q reflects a transformative quarter, anchored by the July 1, 2016 completion of its $8.0 billion merger with AGL Resources (now Southern Company Gas), which added natural gas distribution to the electric utility platform. Consolidated net income attributable to Southern Company rose to $1.13 billion ($1.17 per share) in Q3 from $959 million ($1.05) a year earlier, and year-to-date EPS reached $2.37 versus $2.30. Growth was driven by warmer weather, base rate increases (notably Georgia Power under the 2013 ARP), lower fuel costs, and substantially higher federal tax credit benefits at Southern Power from solar ITCs and wind PTCs. Results were partly offset by higher interest expense ($374 million in Q3 versus $218 million) and depreciation, both reflecting merger financing and new plant. Balance sheet leverage increased materially. Total assets rose to $106.4 billion from $78.3 billion at year-end 2015, long-term debt climbed to $41.6 billion from $24.7 billion, and the company issued roughly $8.5 billion of senior notes in May plus $1.6 billion in equity in August to fund the merger and the $1.4 billion investment in Southern Natural Gas. Current liabilities exceeded current assets by $0.9 billion, and Fitch and Moody's each downgraded Southern Company's ratings in May 2016 (Fitch to A-, Moody's to Baa2), a development investors should monitor. The dominant risk remains the Kemper IGCC at Mississippi Power. Cumulative pre-tax charges above the $2.88 billion cost cap total $2.63 billion, with another $88 million recorded in Q3. Management now targets a December 31, 2016 in-service date, but a gasifier 'A' outage announced November 2, 2016 makes further delays and cost increases plausible. Other items include the Georgia PSC vote on a Vogtle 3 and 4 cost settlement scheduled for December 20, 2016 (which could reduce Georgia Power revenues by about $325 million over 2016-2020), a Gulf Power rate case seeking a $106.8 million increase, an IRS notice challenging Kemper-related R&E deductions, and an SEC formal investigation concerning Kemper disclosures.

    Nov 4, 2016
  31. 2016-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2016

    Southern Company's Q2 2016 10-Q shows a company in heavy transition: a pending-then-completed merger with Southern Company Gas (closed July 1, 2016 for about $8.0 billion), a large Kemper IGCC cost overrun that continues to weigh on earnings, and a sharp rise in leverage to fund these deals. Second-quarter net income attributable to Southern Company was $612 million ($0.65 per diluted share), down from $629 million ($0.69) a year earlier, and year-to-date net income was $1.10 billion ($1.18 diluted EPS) versus $1.14 billion ($1.25). Declines were driven mainly by higher interest expense (up 63% in the quarter to $293 million, reflecting Merger-related debt), higher depreciation, and an additional $81 million pre-tax Kemper charge in Q2 ($134 million year-to-date). Partial offsets came from retail base rate increases, Southern Power's tax credits, and lower fuel costs that reduced fuel revenues and expenses. Balance sheet and liquidity changed substantially. Total assets rose to $90.9 billion from $78.3 billion, largely due to $8.0 billion of restricted cash held for the Merger, and long-term debt nearly doubled to $35.4 billion from $24.7 billion after an $8.5 billion senior note issuance in May. Common equity increased to $22.0 billion, supported by an $889 million common share offering and about $494 million from employee equity plans. Operating cash flow was steady at $2.1 billion, while investing outflows of $12.7 billion were mostly the Merger funding. Excluding restricted cash, current liabilities exceeded current assets by $1.3 billion, mostly from $2.7 billion of debt due within a year. Fitch and Moody's both downgraded Southern Company in May 2016 (Fitch to A-, Moody's to Baa2). For investors, the key watch items are the Kemper IGCC (a $6.68 billion total cost estimate against a $2.88 billion cost cap, with in-service targeted for October 31, 2016 and an SEC formal investigation plus lawsuits pending), the integration of Southern Company Gas and the credit impact of the added leverage, and Georgia Power's Plant Vogtle 3 and 4 construction and the pending Georgia PSC review of costs.

    Aug 8, 2016
  32. 2016-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2016

    Southern Company (SO) reported its first quarter 2016 results, showcasing stable financial performance across its utility operations despite ongoing challenges with the Kemper IGCC project. The company continues to invest heavily in its construction program, including major generation facilities like Plant Vogtle Units 3 & 4 and the Kemper IGCC, funded through a mix of debt and equity. Key financial highlights include a slight decrease in net income for Alabama Power due to milder weather and increased interest expense, while Georgia Power saw an increase in net income driven by base rate adjustments and lower operating expenses. Mississippi Power's net income was significantly impacted by substantial pre-tax charges related to cost overruns on the Kemper IGCC project. Southern Power demonstrated strong growth in net income, largely due to increased renewable energy sales and tax benefits. Investors should monitor the progress and cost management of the large capital projects, particularly Kemper IGCC, and the pending AGL Resources merger for potential impacts on future earnings and financial flexibility.

    May 5, 2016
  33. 2015-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2015

    Southern Company's Q3 2015 10-Q shows improved near-term earnings driven mainly by a smaller Kemper IGCC charge. Net income after preferred dividends for the quarter was $959 million ($1.05 per diluted share), up from $718 million ($0.80) a year earlier, and nine-month EPS reached $2.30 versus $1.87. The increase primarily reflects $150 million of pre-tax Kemper IGCC cost-overrun charges in Q3 2015 versus $418 million in Q3 2014, along with higher retail base rates. Revenue was roughly flat for the quarter at $5.4 billion, with lower wholesale and fuel-related revenue offset by higher retail revenue. The bigger strategic story is the pending $66-per-share cash acquisition of AGL Resources, announced August 23, 2015. Southern expects to fund roughly $8.2 billion of cash needs with about $7.0 billion of debt and $1.0 billion of equity, plus an $8.1 billion bridge loan as backstop, and plans roughly $2.0 billion of additional equity through 2019. Closing requires AGL shareholder approval (vote scheduled November 19, 2015) and multiple state and FCC approvals, with completion targeted for the second half of 2016. Credit agencies responded with negative outlooks, and S&P downgraded Southern Company and Mississippi Power in August. Mississippi Power remains the key risk. Cumulative Kemper IGCC cost-cap charges have reached $2.23 billion, the in-service date may slip past April 19, 2016 (putting $235 million of Phase II tax credits at risk of repayment), and a Mississippi Supreme Court ruling forced a $369 million Mirror CWIP refund beginning November 2015. Interim rates of about $159 million annually took effect in August, with a final Mississippi PSC order expected by December 8, 2015. Southern expects roughly $0.4 billion of additional non-recoverable spending through Kemper completion.

    Nov 5, 2015
  34. 2015-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2015

    Southern Company's Q2 2015 10-Q shows a modest recovery in earnings, with net income after preferred dividends of $629 million ($0.69 per diluted share) versus $611 million ($0.68) a year earlier, and year-to-date net income of $1.14 billion ($1.25 per share) versus $962 million ($1.07 diluted). Growth was driven by retail base rate increases, warmer weather, and substantially lower Kemper IGCC charges ($32 million year-to-date versus $380 million in 2014), partially offset by higher non-fuel O&M and lower wholesale revenues. Total operating revenues fell about 5% year-to-date, mainly from lower fuel cost recovery pass-throughs as natural gas and coal prices declined. The most significant investor concerns are at Mississippi Power and the Kemper IGCC. Cumulative pre-tax charges on Kemper now total $2.08 billion, the project's estimated cost of $6.23 billion exceeds the $2.88 billion cost cap, and in-service is pushed to the first half of 2016. A February 2015 Mississippi Supreme Court ruling forced termination of the Mirror CWIP rate and a refund of roughly $353 million, SMEPA terminated its 15% ownership purchase and received about $301 million (funded by a Southern Company-backed note), and Fitch cut Mississippi Power to BBB+. Mississippi Power now has about $898 million of working capital deficit, and interim rate relief hearings are set for August 6, 2015. Balance sheet and credit items also warrant attention. Current liabilities exceeded current assets by $2.1 billion, with $3.6 billion of debt due within a year, and S&P placed Southern Company and the operating companies on CreditWatch with negative implications. Southern Company's market-to-book ratio was 189%, and it also recorded roughly $700 million of incremental asset retirement obligations from the EPA's coal ash (CCR) rule, which takes effect October 2015. Georgia Power's Plant Vogtle Units 3 and 4 face an 18-month delay and litigation with the contractor seeking an estimated $714 million in additional damages.

    Aug 5, 2015
  35. 2015-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2015

    Southern Company's first quarter 2015 10-Q shows a return to profitability versus a year earlier, driven mainly by the absence of the large Kemper IGCC charge. Net income after preferred dividends rose to $508 million ($0.56 per diluted share) from $351 million ($0.39) in Q1 2014. Operating revenues fell 10% to $4.18 billion, largely because of lower fuel cost recovery revenues and milder weather, while the estimated Kemper IGCC loss shrank to $9 million from $380 million. Operating cash flow declined to $913 million from $1.10 billion, and the company ended the quarter with $1.1 billion of cash and a current liability position of $2.8 billion, mostly from $3.3 billion of debt due within one year. The main risk areas remain the Kemper IGCC and Plant Vogtle Units 3 and 4. Mississippi Power now expects the remainder of Kemper to enter service in the first half of 2016, and it does not intend to seek rate recovery or joint owner contributions for costs above the $2.88 billion cap. The Mississippi Supreme Court reversed the 2013 Mirror CWIP rate order, which could require refunds of $311 million including carrying costs. For Vogtle, Georgia Power received a Contractor forecast delaying in-service dates by 18 months, and the Georgia PSC withdrew the proposed certificate amendment until Unit 3 is complete. The Georgia PSC also said the certified cost does not cap recovery. On the balance sheet, long-term debt rose to $21.1 billion, and the company issued $550 million of Alabama Power senior notes. Management also flagged a pending EPA CCR rule that could add $525 to $575 million of asset retirement obligations in Q2 2015, and a FERC order that could put market-based rate authority at risk in certain areas.

    May 7, 2015
  36. 2014-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2014

    Southern Company's third-quarter 2014 10-Q shows earnings under heavy pressure from further cost overruns on the Kemper IGCC, a clean-coal plant being built by Mississippi Power. Consolidated net income after preferred dividends fell 15.7% in Q3 to $718 million ($0.80 per share, versus $0.97 a year earlier), driven by a $418 million pre-tax charge for estimated probable losses on Kemper. Year-to-date EPS still rose to $1.88 from $1.41, but only because the comparison period carried larger Kemper charges ($1.1 billion pre-tax in the first nine months of 2013 versus $798 million in 2014). Revenue and sales were stronger: total operating revenues rose 6.4% in Q3 and 9.8% year-to-date, supported by retail base rate increases, weather, and higher fuel cost recovery, while wholesale revenues grew strongly with new solar PPAs. The Kemper IGCC is now the central risk. The in-service date for the gasifier and gas clean-up portions moved to the first half of 2016, and the cost estimate of roughly $4.86 billion exceeds the $2.88 billion cost cap. Mississippi Power does not intend to seek rate recovery or joint-owner contributions for the overrun, and further cost increases or delays could be material. The combined-cycle portion was placed in service on natural gas on August 9, 2014. The cumulative pre-tax Kemper charge since 2013 is about $1.98 billion. Mississippi Power's current liabilities exceed current assets by roughly $1 billion, largely because securities come due within a year, and its financial condition was supported by Southern Company equity contributions. Balance-sheet and liquidity data look stable. Cash rose to $1.4 billion and operating cash flow was $4.7 billion for the nine months. Southern Company issued $750 million of senior notes and continued to fund a construction program estimated at $7.2 billion for 2014. Shareholders' equity rose to $20.6 billion, and the common book value per share was $22.07 against a market price of $43.65 at quarter-end. Environmental rule proposals (Clean Power Plan, CSAPR, SSM, and cooling water intake rules) and the Vogtle 3 and 4 nuclear construction litigation with the Contractor are longer-term items to monitor.

    Nov 6, 2014
  37. 2014-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2014

    Southern Company's second-quarter 2014 Form 10-Q shows a sharp earnings rebound versus the prior year, but the result is still heavily shaped by the troubled Kemper IGCC project at Mississippi Power. Net income after preferred dividends was $611 million ($0.68 per diluted share) for the quarter, versus $297 million ($0.34) in Q2 2013, which included a $450 million pre-tax Kemper charge. For the six months, earnings were $962 million ($1.07 diluted EPS), up from $378 million ($0.43), though 2014 still absorbed a $380 million pre-tax Kemper charge taken in Q1 2014 versus $990 million in the first half of 2013. Revenue growth was strong: second-quarter operating revenues rose about 5% to $4.47 billion, and year-to-date revenues rose about 12% to $9.11 billion, driven by colder weather in Q1, warmer weather in Q2, retail base rate increases, higher fuel cost recovery, and higher wholesale energy revenues tied to natural gas prices. The filing's key investor issue is the Kemper IGCC cost overrun. Management now estimates the cost to complete exceeds the $2.88 billion cost cap, with the in-service date extended to the second quarter 2015. Cumulative pre-tax charges reached $1.56 billion ($963.3 million after tax) through June 30, 2014, and management states that any further extension would add about $20 million per month. Mississippi Power does not intend to seek rate recovery or joint-owner contributions for costs above the cap, and the Mississippi PSC prudence review remains ongoing, so additional charges could be material. Southern Company also reports ongoing Plant Vogtle 3 and 4 construction risk, including Contractor litigation over design-change and delay costs, with Georgia Power's share of claimed additional costs cited at about $425 million (2008 dollars). Balance sheet and liquidity remained stable. Total assets were $66.4 billion, long-term debt rose to $22.1 billion, and common equity was $19.4 billion, or $21.69 book value per share against a $45.38 market price. Cash from operations was $2.07 billion for the first six months, while property additions were $2.69 billion, and the construction program is estimated at $6.9 billion for 2014. Financing activity included about $1.3 billion of new long-term debt, $339 million of higher notes payable, and $920 million of common dividends paid. Regulatory developments included Georgia Power's under-recovered fuel balance of about $244 million, which triggered the Interim Fuel Rider; a Sierra Club settlement signed in August 2014 that resolves pending Kemper and Plant Daniel challenges; and continued EPA rulemaking on CSAPR, water intake structures, and the proposed Clean Power Plan.

    Aug 7, 2014
  38. 2014-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2014

    Southern Company's first quarter 2014 results were driven by two offsetting forces: colder weather and higher fuel-related revenues lifted the top line, while a further $380 million pre-tax charge (about $235 million after tax) for cost overruns on Mississippi Power's Kemper IGCC kept earnings depressed. Net income after preferred dividends rose to $351 million ($0.39 per diluted share) from $81 million ($0.09) a year earlier. Total operating revenues increased about 19% to $4.64 billion, with retail revenues up 17% on fuel cost recovery, weather, and base rate increases, and wholesale revenues up 40%, largely from energy sales at higher natural gas prices. The Kemper IGCC is the central risk for investors. Mississippi Power now expects the remainder of the plant, including the gasification system, to enter service in the first half of 2015, and it has revised its estimate to about $4.44 billion against a $2.88 billion cost cap. Mississippi Power does not intend to seek rate recovery or joint owner contributions for costs above the cap, so further overruns fall on shareholders. Cumulative pre-tax Kemper charges through March 31, 2014 reached $1.6 billion, and any further in-service delay is estimated to add about $25 million per month. Management describes the company's financial condition as stable, though short-term debt was reduced and long-term debt rose by about $944 million to fund construction, including $1.0 billion of DOE-guaranteed FFB borrowings for Plant Vogtle Units 3 and 4. Looking ahead, the company's construction program is estimated at $6.9 billion for 2014, $5.6 billion for 2015, and $4.5 billion for 2016. It raised its quarterly dividend to $0.525 per share in April 2014, and it closed the acquisition of the 20-MW Adobe Solar facility for roughly $94 million. Key open items include the Mississippi PSC's prudence review and the Seven-Year Rate Plan for Kemper, the Vogtle cost and schedule dispute with the contractor, and the Georgia PSC's review of Vogtle costs.

    May 8, 2014
  39. 2013-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2013

    Southern Company's Q3 2013 10-Q shows a quarter dominated by the Kemper IGCC cost overrun at Mississippi Power. Southern recorded a $150 million pre-tax charge in the third quarter (about $93 million after tax) and $1.14 billion year-to-date for estimated probable losses on the Kemper IGCC above the $2.88 billion cost cap. As a result, third quarter net income after preferred dividends fell to $852 million ($0.97 per diluted share) from $976 million ($1.11) a year earlier, and nine-month net income fell 37.5% to $1.23 billion ($1.40 diluted EPS vs. $2.23). Excluding the charges, the core utility operations were relatively stable. Retail revenues were up 1.5% year-to-date on base rate increases at Georgia Power and higher fuel cost recovery, although weather was unfavorable in the quarter. Management describes the company's financial condition as stable, with $682 million of cash, $1.3 billion of debt due within a year, and continued access to capital markets. The Kemper project is the central risk for investors. Mississippi Power now expects an in-service date in the fourth quarter of 2014, and its cost estimate has risen to about $4.02 billion, net of DOE grants and the defined cost-cap exceptions. Mississippi Power does not intend to seek joint owner contributions or rate recovery for costs above the $2.88 billion cap, and further overruns could be material. The company also disclosed a material weakness at Mississippi Power related to the Kemper cost estimate, and Mississippi Power's disclosure controls were concluded to be not effective. Moody's downgraded Mississippi Power's senior unsecured debt to Baa1, and S&P revised the outlook for the traditional operating companies to negative. Georgia Power's Plant Vogtle Units 3 and 4 continue to progress, with the eighth VCM report requesting an increase in estimated capital cost to $4.8 billion and later in-service dates. Georgia Power's pending 2013 base rate case requests a $482 million increase, with a Georgia PSC decision expected in December 2013. Beyond the Kemper charges, the company continued to grow its Southern Power wholesale business, which added solar capacity (Campo Verde and Spectrum) and agreed to acquire Adobe Solar. Southern Power's third quarter net income rose 24.5% to $85 million on lower income taxes. Management also raised capital through an at-the-market equity program and issued $500 million of Southern Company senior notes and $300 million of Southern Power senior notes. Capital expenditures are expected to decline through the middle of the decade before rising again.

    Nov 6, 2013
  40. 2013-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2013

    Southern Company's second quarter 2013 10-Q shows a sharp earnings decline driven almost entirely by estimated probable losses on Mississippi Power's Kemper IGCC coal gasification project, which is being built above the $2.88 billion cost cap set by the Mississippi PSC. Consolidated net income after preferred dividends fell to $297 million ($0.34 per share) in the quarter from $623 million ($0.71) a year earlier, and year-to-date earnings fell to $378 million ($0.43) from $991 million ($1.14). Excluding the Kemper charges of $450 million in Q2 and $990 million year-to-date, underlying results were roughly stable, supported by higher Georgia Power base revenues and AFUDC equity, offset by weather, lower usage, higher depreciation, and the absence of a 2012 insurance recovery. Management states that the company's financial condition remained stable at June 30, 2013, with cash of $424 million, total assets of $63.96 billion, and a market-to-book ratio of 214%. However, the non-cash Kemper charges are expected to lead to future cash expenditures with no return or recovery, and further cost overruns or schedule delays could be material. Mississippi Power also reported a material weakness in internal controls tied to the Kemper cost estimate, and its disclosure controls were concluded to be not effective for the period. Credit pressure is also a watch item, as S&P revised its outlook for Southern Company and the traditional operating companies to negative in May 2013 and Moody's placed Mississippi Power on review for downgrade. The filing also covers other developments: Georgia Power filed a base rate case seeking a $482 million increase effective January 2014, with a final PSC order expected in December 2013; Plant Bowen Unit 2 remains offline after an April explosion, with costs expected to be covered by insurance; Southern Power acquired the Campo Verde solar project; and Gulf Power is seeking a $74.4 million retail increase. Capital spending remains heavy, with a construction program estimated at $6.2 billion for 2013, and the company faces a DOE loan guarantee conditional commitment expiring September 30, 2013.

    Aug 6, 2013
  41. 2013-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2013

    Southern Company (SO) reported its first quarter results for 2013, demonstrating stable financial performance with increases in operating revenues and net income driven by factors like favorable weather. The company continues to invest heavily in its construction program, including significant projects like the Kemper IGCC and Plant Vogtle nuclear units. Despite a substantial $540 million pretax charge recorded by Mississippi Power related to cost overruns at the Kemper IGCC project, Southern Company's overall financial health remains sound. Management is actively managing environmental compliance costs and regulatory matters, with several key rulings and proposals impacting future operations. The company also highlighted its ongoing share repurchase program and continued dividend payments, signaling confidence in its financial stability and commitment to shareholder returns.

    May 10, 2013
  42. 2012-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2012

    Southern Company's Q3 2012 10-Q shows a quarter with lower revenue but stable earnings. Third quarter 2012 net income after preferred dividends was $976 million ($1.11 per diluted share), up from $916 million ($1.06 diluted) a year earlier, driven mainly by lower non-fuel operating expenses, partly offset by a 6.7% drop in retail revenues to $4.38 billion due to milder weather, lower customer usage, and lower fuel cost recovery. Year-to-date net income was $1.97 billion ($2.23 diluted EPS), roughly flat versus the prior year, as the decline in retail and wholesale revenue (wholesale down 16.7% on lower energy prices) was largely offset by lower fuel expense. The balance sheet shows continued heavy construction spending, with property additions of $3.56 billion year-to-date and construction work in progress rising to $6.4 billion, largely for Plant Vogtle Units 3 and 4, Mississippi Power's Kemper IGCC, and Southern Power's new generation. Operating cash flow fell to $4.04 billion from $4.60 billion, and long-term debt rose to $18.96 billion. Management describes financial condition as stable and notes ongoing liquidity through commercial paper and about $5.2 billion of committed bank credit. Key risks for investors include the Kemper IGCC cost cap and litigation over its certificate, potential Vogtle cost overruns and a new contractor dispute filed November 1, 2012, a possible impairment of roughly $90 million after tax on a leveraged lease whose lessee may miss its December 2012 rent, rising environmental compliance costs under MATS, and credit rating downgrades at Mississippi Power that could require collateral or a refund of a $150 million SMEPA deposit.

    Nov 7, 2012
  43. 2012-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2012

    Southern Company (SO) reported a mixed financial performance for the second quarter and first half of 2012. While net income saw a slight increase in the second quarter compared to the prior year, year-to-date net income declined due to factors like milder weather impacting revenues and increased operations and maintenance expenses. Revenue declines were notably seen in retail and wholesale segments, driven by lower energy sales and, in some cases, lower pricing. However, positive contributions came from rate increases and higher usage in certain customer segments, along with an insurance recovery. The company's financial condition remained stable, supported by strong operating cash flow. Significant investments were made in property, plant, and equipment, particularly for generation, transmission, and distribution facilities. Debt levels increased due to senior note issuances, while the company also managed its capital structure through debt redemptions and equity issuances. The company highlighted its ongoing focus on environmental compliance, with significant projected capital expenditures for meeting new EPA regulations, including the MATS rule. Additionally, large-scale construction projects like Plant Vogtle Units 3 and 4 and the Kemper IGCC continue to be a major focus, with associated complexities and regulatory reviews impacting financial projections and operational plans.

    Aug 6, 2012
  44. 2012-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2012

    Southern Company (SO) reported a decrease in net income for the first quarter of 2012 compared to the same period in 2011, primarily driven by milder weather conditions leading to lower retail revenues and increased depreciation from new generation and environmental projects. While total operating revenues declined, the company saw increases in retail revenue from rate adjustments and improved industrial KWH sales across its subsidiaries. Fuel and purchased power expenses also decreased due to lower fuel costs. The company continues to invest significantly in its construction programs, including major projects like Plant Vogtle Units 3 and 4 and the Kemper IGCC facility. These projects, along with ongoing environmental compliance initiatives and potential regulatory changes, represent key factors influencing future earnings and capital expenditures. Southern Company maintains a stable financial condition with access to capital markets to fund its operations and growth. Investors should note the ongoing legal proceedings concerning environmental regulations, particularly with the EPA, and climate change litigation. While management believes these matters will not have a material adverse effect, they represent potential risks. The company also highlighted the positive impact of bonus depreciation on future cash flows.

    May 7, 2012
  45. 2011-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2011

    Southern Company's Q3 2011 10-Q shows a stable quarter and year-to-date period driven by Georgia Power's rate increases and strong Southern Power growth. Consolidated net income after preferred dividends was $916 million ($1.07 per diluted share) for Q3 2011, up from $817 million ($0.98) a year earlier, and year-to-date net income reached $1.94 billion ($2.27 per share) versus $1.82 billion ($2.20). Growth was supported by 2010 ARP and NCCR tariff revenues at Georgia Power, Rate CNP Environmental revenues at Alabama Power, and new PPAs at Southern Power, partly offset by cooler September weather, lower wholesale revenues, and higher depreciation. The balance sheet strengthened, with total assets of $57.3 billion, cash of $1.5 billion, and total common equity up to $17.6 billion. Operating cash flow rose 30% to $4.6 billion for the first nine months, aided by bonus depreciation and timing of tax payments, while capital spending remained heavy at $3.1 billion in property additions, largely for environmental compliance and the Plant Vogtle and Kemper IGCC projects. Short-term debt was reduced by $1.16 billion, and the company issued $3.1 billion in long-term debt. Investors should weigh significant forward risks: proposed EPA Utility MACT, water quality, and coal ash rules could cost the traditional operating companies $13 billion to $18 billion through 2020, Georgia Power faces decisions on approximately 2,600 MW of aging fossil capacity, the Kemper IGCC and Plant Vogtle projects carry cost and regulatory uncertainty, and the company disclosed a potential roughly $80 million after-tax impairment on a leveraged lease.

    Nov 7, 2011
  46. 2011-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2011

    Southern Company's 2Q 2011 10-Q shows steady, modestly growing earnings driven by Georgia Power's retail base rate increases under the 2010 ARP and NCCR tariff, plus new Southern Power PPAs. Consolidated net income after preferred dividends was $604 million ($0.71 basic EPS) for the quarter, up 18.2% from $510 million, and $1.03 billion ($1.20 per share) year-to-date, up 2.1%. Year-to-date revenue rose to $8.53 billion from $8.37 billion, though weather-driven first-quarter declines and lower Alabama Power wholesale sales weighed on results. Operating cash flow improved sharply to $2.39 billion (up $974 million), helped by bonus depreciation and tax timing, which is a meaningful liquidity tailwind. The filing's most important forward-looking items concern environmental compliance and the capital program. Southern estimates $13 to $18 billion of aggregate capital costs through 2020 for the traditional operating companies if the proposed Utility MACT, water quality, and coal combustion byproduct rules are adopted as proposed. Georgia Power also proposed decertifying Plant Branch Units 1 and 2 and is deferring decisions on roughly 2,600 MW of fossil capacity, while the EPA's pending Utility MACT rule (final due November 16, 2011) remains a key uncertainty. Ongoing construction of Plant Vogtle Units 3 and 4 and the Kemper IGCC keeps the capital budget elevated, and DOE loan guarantees for both projects remain uncertain. Balance sheet and litigation items are mostly manageable. Total assets were $56.0 billion, and cash and unused credit lines were ample at about $5.6 billion combined. Short-term borrowings were modest, and Southern issued over $1.9 billion of long-term debt year-to-date. Notable legal items include the EPA NSR appeal over Alabama Power, the U.S. Supreme Court's June 2011 ruling in the carbon dioxide nuisance case, and a $80 million after-tax potential impairment on a leveraged lease. Management characterizes most other matters as not material. Investors should watch the Utility MACT final rule, the Georgia PSC decision on Branch units expected in March 2012, and the Gulf Power rate case decision expected in Q1 2012.

    Aug 5, 2011
  47. 2011-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2011

    Southern Company's first quarter 2011 results showed a decline in profitability, with net income after preferred dividends of $422 million ($0.50 per diluted share... basic EPS $0.50, diluted $0.49) versus $495 million ($0.60) a year earlier, a decrease of about 14.6%. The main driver was significantly colder weather in the first quarter 2010, which depressed retail revenues in 2011 by roughly $90 million from weather alone. Wholesale revenues fell 17.2% to $449 million as unit power sales contracts expired at Alabama Power in May 2010, partially offset by new PPAs at Southern Power. Higher operations and maintenance expense and a regulatory amortization reduction at Georgia Power also weighed on earnings, while the Georgia Power 2010 ARP base rate increase (about $562 million) and new Southern Power contracts provided support. Cash flow and liquidity were comparatively solid. Operating cash flow rose $260 million to $998 million, driven by lower receivables from greater fuel cost recovery. Management described financial condition as stable, with about $4.8 billion of unused committed credit lines and roughly $410 million of cash. The company raised its quarterly dividend to $0.4725 per share for June 2011 payment, and the 2011 construction program is estimated at $4.9 billion. Estimated incremental cash flow from 2010 bonus depreciation rules is $350 million to $450 million in 2011. Key risks for investors include pending EPA environmental rules, most notably the proposed Utility MACT rule (final rule due November 2011) that could require significant scrubbers and SCRs, the proposed cooling water intake rule, the Alabama SIP opacity rescission effective May 6, 2011, and the Plant Vogtle 3 and 4 nuclear construction and related DOE loan guarantees. Subsequent to quarter end, April 2011 storms caused estimated Alabama Power repair costs of $220 million to $280 million in combined O&M and capital, with a $127 million natural disaster reserve available to offset the O&M portion.

    May 6, 2011
  48. 2010-Q3

    SOUTHERN CO Quarterly Report for Q3 Ended Sep 30, 2010

    Southern Company's Q3 2010 10-Q shows a company with strong year-to-date earnings growth but a softer quarter and a few credit and regulatory overhangs. Year-to-date 2010 net income after preferred dividends was $1.82 billion ($2.20 per diluted share), up 30.7% from $1.39 billion ($1.76) a year earlier. Much of that gain reflects a $202 million MC Asset Recovery litigation charge in Q1 2009 that did not recur, plus weather-driven demand (a colder Q1 2010 and warmer Q2–Q3) and rate increases at Alabama Power. Third-quarter net income was roughly flat at $817.2 million ($0.98 per share, versus $0.99), as higher revenues were offset by higher O&M, including a $40 million NDR accrual at Alabama Power, and higher depreciation. The balance sheet and cash flow picture is mixed. Operating cash flow rose to $3.5 billion for the first nine months, up $1.2 billion, helped by a deferred-tax benefit from a change in tax accounting for repair costs (about $243 million expected for 2010) and by bonus depreciation under the SBJCA (about $309 million). Share count rose meaningfully, with common equity up about $1.4 billion through issuances, and the company returned $1.1 billion in dividends. Total assets reached $54.9 billion, and capital spending remained heavy at roughly $2.9 billion year-to-date, tied to environmental retrofits and new generation at Plant Vogtle, Plant McDonough, and the Kemper IGCC. The main risks for investors are regulatory and credit-related. Georgia Power's base rate request of $615 million (effective January 2011) and a Georgia PSC decision due December 21, 2010 could materially shape 2011–2012 earnings. Moody's downgraded Southern Company's senior unsecured rating to Baa1, and Fitch revised the company's outlook to negative. The EPA NSR case against Alabama Power, with a trial set for October 2011, and carbon dioxide and coal-ash rulemakings add environmental cost uncertainty. Liquidity appears adequate, with about $1.3 billion of cash and $4.8 billion of unused committed credit lines.

    Nov 5, 2010
  49. 2010-Q2

    SOUTHERN CO Quarterly Report for Q2 Ended Jun 30, 2010

    Southern Company (SO) reported increased net income for the six months ended June 30, 2010, compared to the same period in 2009, primarily driven by warmer weather, regulatory rate increases in Alabama, and recovery of environmental costs in Georgia. The company also saw a significant rise in retail revenues, largely due to these factors and a strong increase in industrial sales, particularly in the second quarter. While overall revenues and net income saw positive trends, the company also highlighted increased operations and maintenance expenses and depreciation on new plant in service. Southern Company's financial health remains stable, supported by strong operating cash flow and access to credit markets. However, investors should note ongoing environmental regulatory challenges and potential future compliance costs, as well as the company's significant ongoing construction program, including nuclear expansion projects.

    Aug 6, 2010
  50. 2010-Q1

    SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2010

    Southern Company's first quarter 2010 results showed a sharp rebound in earnings, with net income after preferred dividends of $494.5 million ($0.60 per diluted share) versus $125.7 million ($0.16) a year earlier. The comparison is flattered by the absence of the $202 million MC Asset Recovery litigation settlement charge that depressed Q1 2009, so the underlying improvement is smaller than the headline figures suggest. The main operating drivers were significantly colder weather (roughly $126 million of retail revenue impact), higher retail fuel and cost-recovery revenues, Alabama Power's Rate RSE and Rate CNP Environmental increases effective January 2010, and an amortization of a Georgia Power cost-of-removal regulatory liability. Retail revenues rose 12.9% to $3.46 billion, while operating and maintenance expense rose 4.2%. Balance sheet and liquidity remained stable. Operating cash flow was $739 million, up $338 million, aided by a reduction in fossil fuel stock, while investing outflows of about $1.1 billion were flat year over year. Financing cash use was essentially break-even as the company issued fewer securities than in the prior-year quarter. Cash fell to $339 million, and the company reported roughly $4.8 billion of unused committed credit lines, of which $1.3 billion expires in 2010. Total assets reached $52.6 billion, and the market-to-book ratio was 180%. The quarterly dividend was raised to $0.455 per share in April 2010. Investors should monitor several contingent items. Georgia Power's state income tax credit claims could have a significant positive or negative effect on net income and cash flow, and the Georgia Department of Revenue has appealed a favorable ruling. The Kemper IGCC project faces a Mississippi PSC order imposing a $2.4 billion construction cost cap and deferring CWIP recovery decisions. Georgia Power's fuel under-recovery of roughly $687 million is being collected over 42 months under new rates effective April 2010, and a general rate case is due by July 1, 2010. Pending EPA rules on greenhouse gases, coal combustion byproducts, and industrial boilers, along with carbon dioxide nuisance litigation, add long-term regulatory uncertainty.

    May 7, 2010