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Southern Company earnings benefit from operating efficiencies



        Southern Company earnings benefit from operating efficiencies

PR Newswire

ATLANTA, Jan. 30, 2013

ATLANTA, Jan. 30, 2013 /PRNewswire/ -- Southern Company today reported fourth
quarter 2012 earnings of $383 million, or 44 cents a share, compared with
earnings of $261 million, or 30 cents a share, in the fourth quarter of 2011.
Southern Company also reported full-year 2012 earnings of $2.35 billion, or
$2.70 a share, compared with earnings for 2011 of $2.20 billion, or $2.57 a
share.

Earnings for the full year included 2 cents a share of insurance recovery
related to the March 2009 settlement agreement with MC Asset Recovery, LLC
(MCAR) to resolve a lawsuit arising out of the 2003 bankruptcy of Mirant
Corp., a Southern Company subsidiary until its 2001 spinoff.  Excluding the
impact of the MCAR insurance recovery, Southern Company earned $2.68 a share
in 2012, compared with $2.57 a share for 2011. 

Earnings for the fourth quarter of 2012 and the full year were positively
influenced by reduced non-fuel operations and maintenance expenses and by
other retail revenue effects across Southern Company's traditional operating
companies. Full-year 2012 earnings were negatively affected by significantly
milder weather throughout the year as compared with 2011.

"Our employees continue to find ways to make our business more efficient,
while delivering customer service that is among the best in our industry,"
said Thomas A. Fanning, Southern Company chairman, president and chief
executive officer. "Their efforts demonstrate the effectiveness of our
business model – which succeeds by placing customers at the center of
everything we do – and reaffirm our commitment to providing clean, safe,
reliable, affordable electricity."

Fanning said that economic prospects in the Southeast remain bright, but that
expansion and hiring decisions continue to be delayed pending longer-term
congressional action on fiscal issues.

Operating revenues for the full year were $16.54 billion, compared with $17.66
billion in 2011, a 6.3 percent decrease that was due primarily to lower fuel
costs being passed on to customers. Fourth quarter revenues were $3.703
billion, compared with $3.696 billion for the same period in 2011, an increase
of 0.2 percent.

Kilowatt-hour sales to retail customers in Southern Company's four-state
service area decreased 2.3 percent in 2012, compared with 2011. Residential
and commercial energy sales – both of which were affected by milder weather in
2012 – decreased 5.4 percent and 1.6 percent, respectively, while industrial
energy sales increased 0.2 percent.

Total energy sales to Southern Company's customers in the Southeast, including
wholesale sales, decreased 3.4 percent in 2012 compared with 2011.

Southern Company's financial analyst call will begin at 1 p.m. Eastern time
today, during which Fanning and Chief Financial Officer Art P. Beattie will
discuss earnings and provide a general business update. Investors, media and
the public may listen to a live webcast of the call and view associated slides
at http://investor.southerncompany.com/events.cfm. A replay of the webcast
only will be available at the site for 12 months.

Southern Company has also posted on its website detailed financial information
on its fourth quarter and full-year performance. These materials are available
at www.southerncompany.com.

With 4.4 million customers and more than 43,000 megawatts of generating
capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy
company serving the Southeast through its subsidiaries. A leading U.S.
producer of clean, safe, reliable and affordable electricity, Southern Company
owns electric utilities in four states and a growing competitive generation
company, as well as fiber optics and wireless communications. Southern Company
brands are known for energy innovation, excellent customer service, high
reliability and retail electric prices that are below the national average.
Southern Company and its subsidiaries are leading the nation's nuclear
renaissance through the construction of the first new nuclear units to be
built in a generation of Americans and are demonstrating their commitment to
energy innovation through the development of a state-of-the-art coal
gasification plant. Southern Company has been recognized by the U.S.
Department of Defense and G.I. Jobs magazine as a top military employer and
listed by DiversityInc as a top company for Blacks. The company received the
2012 Edison Award from the Edison Electric Institute for its leadership in new
nuclear development, was named Electric Light & Power magazine's Utility of
the Year for 2012 and is continually ranked among the top utilities in
Fortune's annual World's Most Admired Electric and Gas Utility rankings. Visit
our website at www.southerncompany.com.

Cautionary Note Regarding Forward-Looking Statements:

Certain information contained in this release is forward-looking information
based on current expectations and plans that involve risks and uncertainties.
Forward-looking information includes, among other things, statements
concerning the economy and customer growth. Southern Company cautions that
there are certain factors that can cause actual results to differ materially
from the forward-looking information that has been provided. The reader is
cautioned not to put undue reliance on this forward-looking information, which
is not a guarantee of future performance and is subject to a number of
uncertainties and other factors, many of which are outside the control of
Southern Company; accordingly, there can be no assurance that such suggested
results will be realized. The following factors, in addition to those
discussed in Southern Company's Annual Report on Form 10-K for the year ended
December 31, 2011, and subsequent securities filings, could cause actual
results to differ materially from management expectations as suggested by such
forward-looking information: the impact of recent and future federal and state
regulatory changes, including legislative and regulatory initiatives regarding
deregulation and restructuring of the electric utility industry,
implementation of the Energy Policy Act of 2005, environmental laws including
regulation of water, coal combustion byproducts, and emissions of sulfur,
nitrogen, carbon, soot, particulate matter, hazardous air pollutants,
including mercury, and other substances, financial reform legislation, and
also changes in tax and other laws and regulations to which Southern Company
and its subsidiaries are subject, as well as changes in application of
existing laws and regulations; current and future litigation, regulatory
investigations, proceedings, or inquiries, including the pending Environmental
Protection Agency civil actions against certain Southern Company subsidiaries,
Federal Energy Regulatory Commission matters, and Internal Revenue Service and
state tax audits; the effects, extent, and timing of the entry of additional
competition in the markets in which Southern Company's subsidiaries operate;
variations in demand for electricity, including those relating to weather, the
general economy and recovery from the recent recession, population and
business growth (and declines), the effects of energy conservation measures,
and any potential economic impacts resulting from federal fiscal and budgetary
decisions; available sources and costs of fuels; effects of inflation; ability
to control costs and avoid cost overruns during the development and
construction of facilities, which includes projects involving facility designs
that have not been finalized or previously constructed; investment performance
of Southern Company's employee benefit plans and nuclear decommissioning trust
funds; advances in technology; state and federal rate regulations and the
impact of pending and future rate cases and negotiations, including rate
actions relating to fuel and other cost recovery mechanisms; regulatory
approvals and actions related to the Plant Vogtle expansion, including Georgia
Public Service Commission approvals, Nuclear Regulatory Commission actions,
and potential U.S. Department of Energy loan guarantees; regulatory approvals
and actions related to the Kemper County integrated coal gasification combined
cycle facility, including Mississippi Public Service Commission approvals, the
South Mississippi Electric Power Association purchase decision, satisfaction
of requirements to utilize investment tax credits and grants, and the outcome
of any further proceedings regarding the Mississippi Public Service
Commission's issuance of the certificate of public convenience and necessity;
the performance of projects undertaken by the non-utility businesses and the
success of efforts to invest in and develop new opportunities; internal
restructuring or other restructuring options that may be pursued; potential
business strategies, including acquisitions or dispositions of assets or
businesses, which cannot be assured to be completed or beneficial to Southern
Company or its subsidiaries; the ability of counterparties of Southern Company
and its subsidiaries to make payments as and when due and to perform as
required; the ability to obtain new short- and long-term contracts with
wholesale customers; the direct or indirect effect on the Southern Company
system's business resulting from terrorist incidents and the threat of
terrorist incidents, including cyber intrusion; interest rate fluctuations and
financial market conditions and the results of financing efforts, including
Southern Company's and its subsidiaries' credit ratings; the impacts of any
potential U.S. credit rating downgrade or other sovereign financial issues,
including impacts on interest rates, access to capital markets, impacts on
currency exchange rates, counterparty performance, and the economy in general,
as well as potential impacts on the availability or benefits of proposed U.S.
Department of Energy loan guarantees; the ability of Southern Company and its
subsidiaries to obtain additional generating capacity at competitive prices;
catastrophic events such as fires, earthquakes, explosions, floods,
hurricanes, droughts, pandemic health events such as influenzas, or other
similar occurrences; the direct or indirect effects on the Southern Company
system's business resulting from incidents affecting the U.S. electric grid or
operation of generating resources; and the effect of accounting pronouncements
issued periodically by standard setting bodies. Southern Company expressly
disclaims any obligation to update any forward-looking information.

 

Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
                          Three Months Ended          Year-to-Date

                          December                    December
                          2012           2011         2012          2011
Consolidated
Earnings–As Reported
(See Notes)
  Traditional Operating   $   349        $  248       $  2,146      $  2,052
Companies
  Southern Power          31             24           175           162
  Total                   380            272          2,321         2,214
  Parent Company and      3              (11)         29            (11)
Other
  Net Income–As           $   383        $  261       $  2,350      $  2,203
Reported
  Basic Earnings Per      $   0.44       $  0.30      $  2.70       $  2.57
Share
  Average Shares
Outstanding (in           869            865          871           857
millions)
  End of Period Shares
Outstanding (in                                       868           867
millions)
                          Three Months Ended          Year-to-Date

                          December                    December
                          2012           2011         2012          2011
Consolidated
Earnings–Excluding
Items
(See Notes)
  Net Income–As           $   383        $  261       $  2,350      $  2,203
Reported
  MC Asset Recovery
Insurance Settlement,     —              —            (21)          —
net
  Net Income–Excluding    $   383        $  261       $  2,329      $  2,203
Items
  Basic Earnings Per      $   0.44       $  0.30      $  2.68       $  2.57
Share–Excluding Items
Notes
- For the three months and twelve months ended December 31, 2012 and 2011,
dilution does not change basic earnings per share by more than 3 cents and is
not material.
- In March 2009, Southern Company recorded a charge related to a settlement
agreement with MC Asset Recovery, LLC (MCAR) to settle a lawsuit.  Southern
Company filed an insurance claim for a portion of the MCAR settlement amount. 
In June 2012, Southern Company received an insurance recovery related to this
claim.  Earnings for the twelve months ended December 31, 2012 include 2 cents
a share for the MCAR insurance recovery.
- Certain prior year data has been reclassified to conform with current year
presentation.
- All figures in this earnings release are preliminary and remain subject to
the completion of normal year-end accounting procedures and adjustments, which
could result in changes to these preliminary results.  In addition, certain
classifications and rounding may be different from final results published in
the Form 10-K.

 

 

Southern Company
Significant Factors Impacting EPS
                                Three Months Ended      Year-to-Date

                                December                December
                                2012    2011    Change  2012    2011    Change
Consolidated Earnings Per
Share–
As Reported (See Notes)         $ 0.44  $ 0.30  $ 0.14  $ 2.70  $ 2.57  $ 0.13
  Significant Factors:
  Traditional Operating                         0.12                    0.11
Companies
  Southern Power                                0.01                    0.02
  Parent Company and Other                      0.01                    0.05
  Additional Shares                             —                       (0.05)
  Total–As Reported                             $ 0.14                  $ 0.13
                                Three Months Ended      Year-to-Date

                                December                December
                                2012    2011    Change  2012    2011    Change
Consolidated Earnings Per
Share–
Excluding Items (See Notes)     $ 0.44  $ 0.30  $ 0.14  $ 2.68  $ 2.57  $ 0.11
  Total–As Reported                             0.14                    0.13
  MC Asset Recovery Insurance                   —                       (0.02)
Settlement
  Total–Excluding Items                         $ 0.14                  $ 0.11

Notes
- For the three months and twelve months ended December 31, 2012 and 2011,
dilution does not change basic earnings per share by more than 3 cents and is
not material.
- In March 2009, Southern Company recorded a charge related to a settlement
agreement with MC Asset Recovery, LLC (MCAR) to settle a lawsuit.  Southern
Company filed an insurance claim for a portion of the MCAR settlement amount. 
In June 2012, Southern Company received an insurance recovery related to this
claim.  Earnings for the twelve months ended December 31, 2012 include 2 cents
a share for the MCAR insurance recovery.
- Certain prior year data has been reclassified to conform with current year
presentation.
- All figures in this earnings release are preliminary and remain subject to
the completion of normal year-end accounting procedures and adjustments, which
could result in changes to these preliminary results.  In addition, certain
classifications and rounding may be different from final results published in
the Form 10-K.

 

Southern Company
EPS Earnings Analysis
                                   Three Months Ended       Year-to-Date
Description
                                   December 2012            December 2012
Retail Sales                       3¢                       2¢
Retail Revenue Impacts             2                        22
Weather                            1                        (20)
Other Operating Revenues           1                        —
Non-Fuel O&M                       9                        11
Purchased Power Capacity           1                        5
Expense
Depreciation and                   (1)                      (4)
Amortization
Taxes Other Than Income            (1)                      (1)
Taxes
Other Income and Deductions        —                        (1)
Interest Expense                   —                        (2)
Income Taxes                       (3)                      (1)
Total Traditional Operating        12¢                      11¢
Companies
Southern Power                     1                        2
Parent and Other                   1                        3
Increase in Shares                 —                        (5)
Total Change in EPS                14¢                      11¢
(x-items)
MC Asset Recovery Insurance        —                        2
Settlement
Total Change in EPS (As            14¢                      13¢
Reported)
Notes
- In March 2009, Southern Company recorded a charge related to a settlement
agreement with MC Asset Recovery, LLC (MCAR) to settle a lawsuit.  Southern
Company filed an insurance claim for a portion of the MCAR settlement amount. 
In June 2012, Southern Company received an insurance recovery related to this
claim.  Earnings for the twelve months ended December 31, 2012 include 2 cents
a share for the MCAR insurance recovery.
- All figures in this earnings release are preliminary and remain subject to
the completion of normal   year-end accounting procedures and adjustments,
which could result in changes to these preliminary results.  In addition,
certain classifications and rounding may be different from final results
published in the Form 10-K.

 

Southern Company
Consolidated Earnings
(In Millions of Dollars)
                    Three Months Ended            Year-to-Date

                    December                      December
                    2012      2011      Change    2012      2011      Change
Income Account-
Retail Revenues-
Fuel                $ 1,034   $ 1,144   $ (110)   $ 4,743   $ 5,686   $ (943)
Non-Fuel            2,085     1,996     89        9,444     9,385     59
Wholesale           414       392       22        1,675     1,905     (230)
Revenues
Other Electric      157       147       10        616       611       5
Revenues
Non-regulated
Operating           13        17        (4)       59        70        (11)
Revenues
Total Revenues      3,703     3,696     7         16,537    17,657    (1,120)
Fuel and            1,239     1,353     (114)     5,601     6,870     (1,269)
Purchased Power
Non-fuel O & M      974       1,101     (127)     3,791     3,938     (147)
MC Asset
Recovery            —         —         —         (19)      —         (19)
Insurance
Settlement
Depreciation and    452       438       14        1,787     1,717     70
Amortization
Taxes Other Than    224       215       9         914       901       13
Income Taxes
Total Operating     2,889     3,107     (218)     12,074    13,426    (1,352)
Expenses
Operating Income    814       589       225       4,463     4,231     232
Allowance for
Equity Funds        41        40        1         143       153       (10)
Used During
Construction
Interest Income     6         7         (1)       40        21        19
Interest
Expense, Net of     210       219       (9)       859       857       2
Amounts
Capitalized
Other Income        (16)      (44)      28        (38)      (61)      23
(Expense), net
Income Taxes        236       96        140       1,334     1,219     115
Net Income          399       277       122       2,415     2,268     147
Dividends on
Preferred and       16        16        —         65        65        —
Preference Stock
of Subsidiaries
NET INCOME AFTER
DIVIDENDS ON
PREFERRED AND       $ 383     $ 261     $ 122     $ 2,350   $ 2,203   $ 147
PREFERENCE STOCK
(See Notes)
Notes
- Certain prior year data has been reclassified to conform with current year
presentation.
- All figures in this earnings release are preliminary and remain subject to
the completion of normal year-end accounting procedures and adjustments, which
could result in changes to these preliminary results.  In addition, certain
classifications and rounding may be different from final results published in
the Form 10-K.

 

 

Southern Company
Kilowatt-Hour Sales
(In Millions of KWHs)
               Three Months Ended December          Year-to-Date December
As Reported                               Weather                                Weather
               2012     2011     Change   Adjusted  2012      2011      Change   Adjusted
(See Notes)                               Change                                 Change
Kilowatt-Hour
Sales-
Total Sales    42,543   41,558   2.4   %            183,617   190,047   (3.4) %
Total Retail   36,109   35,183   2.6   %  1.7    %  156,054   159,702   (2.3) %  0.4    %
Sales-
Residential    11,140   10,447   6.6   %  5.2    %  50,454    53,341    (5.4) %  1.1    %
Commercial     12,273   12,183   0.7   %  (0.7)  %  53,007    53,855    (1.6) %  (0.2)  %
Industrial     12,468   12,323   1.2   %  1.2    %  51,674    51,570    0.2   %  0.2    %
Other          228      230      (0.7) %  (0.8)  %  919       936       (1.8) %  (1.4)  %
Total
Wholesale      6,434    6,375    0.9   %  N/A       27,563    30,345    (9.2) %  N/A
Sales
Notes
- Certain prior year data has been reclassified to conform with current year
presentation.
- All figures in this earnings release are preliminary and remain subject to the
completion of normal year-end accounting procedures and adjustments, which could result
in changes to these preliminary results.  In addition, certain classifications and
rounding may be different from final results published in the Form 10-K.

 

 

Southern Company
Financial Overview
(In Millions of Dollars)
                     Three Months Ended           Year-to-Date

                     December                     December
                     2012      2011      %        2012       2011       %
                                         Change                         Change
Consolidated –
Operating Revenues   $ 3,703   $ 3,696   0.2   %  $ 16,537   $ 17,657   (6.3) %
Earnings Before      635       373       70.2  %  3,749      3,487      7.5   %
Income Taxes
Net Income           383       261       46.7  %  2,350      2,203      6.7   %
Available to Common
Alabama Power –
Operating Revenues   $ 1,290   $ 1,271   1.5   %  $ 5,520    $ 5,702    (3.2) %
Earnings Before      205       182       12.6  %  1,220      1,225      (0.4) %
Income Taxes
Net Income           113       102       10.8  %  704        708        (0.6) %
Available to Common
Georgia Power –
Operating Revenues   $ 1,735   $ 1,758   (1.3) %  $ 7,998    $ 8,800    (9.1) %
Earnings Before      315       156       101.9 %  1,873      1,787      4.8   %
Income Taxes
Net Income           181       110       64.5  %  1,168      1,145      2.0   %
Available to Common
Gulf Power –
Operating Revenues   $ 331     $ 328     1.1   %  $ 1,440    $ 1,520    (5.3) %
Earnings Before      39        29        34.4  %  211        173        22.5  %
Income Taxes
Net Income           23        19        20.3  %  126        105        19.9  %
Available to Common
Mississippi Power –
Operating Revenues   $ 236     $ 238     (0.8) %  $ 1,036    $ 1,113    (6.9) %
Earnings Before      42        20        102.7 %  200        138        45.0  %
Income Taxes
Net Income           33        16        104.1 %  148        94         57.3  %
Available to Common
Southern Power –
Operating Revenues   $ 292     $ 286     1.8   %  $ 1,186    $ 1,236    (4.0) %
Earnings Before      48        22        116.3 %  268        238        12.5  %
Income Taxes
Net Income           31        24        30.1  %  175        162        8.0   %
Available to Common
Notes
- Certain prior year data has been reclassified to conform with current year
presentation.
- All figures in this earnings release are preliminary and remain subject to
the completion of normal  year-end accounting procedures and adjustments,
which could result in changes to these preliminary results.  In addition,
certain classifications and rounding may be different from final results
published in the Form 10-K.

 

SOURCE Southern Company

Website: http://www.southerncompany.com
Contact: Media Contact, Southern Company Media Relations, +1-404-506-5333 or
1-866-506-5333, www.southerncompany.com or Investor Relations Contact, Dan
Tucker, +1-404-506-5310, dstucker@southernco.com
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