10-QPeriod: Q1 FY2013

SOUTHERN CO Quarterly Report for Q1 Ended Mar 31, 2013

Filed May 10, 2013For Securities:SOSOJESOJFSOJCSOJDSOMN

Summary

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.

Financial Highlights

42 data points
Beta

Revenue

$3.90B

Net Income

$97.00M

2.5% Net Margin

EPS (Diluted)

$0.09

Total Assets

$63.27B

Cash & Equivalents

$515.00M

Free Cash Flow

-$460.00M

Financial Statements
Beta
Revenue$3.90B
Operating Expenses$3.57B
Operating Income$325.00M
Net Income$97.00M
EPS (Basic)$0.09
EPS (Diluted)$0.09
Shares Outstanding (Basic)870.00M
Shares Outstanding (Diluted)875.00M

Key Highlights

  • 1Mississippi Power recorded a significant $540 million pretax charge due to cost overruns on the Kemper IGCC project, exceeding the established cost cap.
  • 2Alabama Power reported a 5.4% increase in net income for the quarter, driven by favorable weather and increased retail revenues.
  • 3Georgia Power saw a 18.0% increase in net income, attributed to higher retail base revenues and favorable weather conditions.
  • 4Southern Power's wholesale revenues from non-affiliates surged by 59.0% due to increased energy sales and higher prices.
  • 5The company is actively managing environmental compliance, noting updates on EPA rules like MATS and proposed water quality regulations, with potential impacts on capital expenditures.
  • 6Southern Company's financial condition is described as stable, with continued access to capital markets to fund its ongoing construction programs.
  • 7The company reaffirmed its commitment to shareholder returns, with a quarterly dividend payment and a share repurchase program in place.

Frequently Asked Questions

Mississippi Power recorded a $540 million pretax charge due to cost overruns on its Kemper IGCC project, which exceeded the $2.88 billion cost cap established by the Mississippi PSC. This charge reflects an updated estimate of costs to complete the project.

Favorable weather conditions positively impacted results for Alabama Power and Georgia Power, contributing to increased retail revenues and net income for both subsidiaries.

The most significant ongoing construction projects are the Kemper IGCC plant at Mississippi Power and Plant Vogtle Units 3 and 4 at Georgia Power, which are nuclear generating facilities. Southern Power is also actively acquiring and constructing new renewable energy projects.

Southern Company is actively monitoring and adapting to new and proposed environmental regulations from the EPA, such as the MATS rule and potential water quality regulations. These regulations could lead to significant capital expenditures for compliance, the ultimate impact of which is still being determined.