Southern Company reports fourth quarter earnings; delivers strong customer satisfaction, reliability in 2013

  Southern Company reports fourth quarter earnings; delivers strong customer
                      satisfaction, reliability in 2013

PR Newswire

ATLANTA, Jan. 29, 2014

ATLANTA, Jan. 29, 2014 /PRNewswire/ --Southern Company today reported fourth
quarter 2013 earnings of $414 million, or 47 cents per share, compared with
earnings of $383 million, or 44 cents per share, in the fourth quarter of
2012. Southern Company also reported full-year 2013 earnings of $1.64 billion,
or $1.88 per share, compared with earnings for 2012 of $2.35 billion, or $2.70
per share.

(Logo: http://photos.prnewswire.com/prnh/20080801/SOCOLOGO )

Earnings for the fourth quarter of 2013 include after-tax charges of $25
million, or 3 cents per share – and earnings for the full year 2013 include
after-tax charges totaling $729 million, or 83 cents per share – related to
increased cost estimates for construction of the Kemper project. Earnings for
the full year 2013 also include an after-tax charge of $16 million, or 2 cents
per share, for the restructuring of a leveraged lease investment recorded in
the first quarter of 2013. Earnings for the fourth quarter and full year 2013
include $12 million (2 cents per share) – and earnings for the full year 2012
include $21 million (2 cents per share) – of insurance recovery related to the
March 2009 litigation settlement agreement with MC Asset Recovery, LLC.
Excluding these items, earnings for the fourth quarter and full year 2013 were
48 cents and $2.71 per share, respectively, compared with 44 cents and $2.68
per share, respectively, for the same periods in 2012.

Earnings for the fourth quarter 2013 were positively influenced by stronger
economic growth and closer-to-normal weather compared to the same period in
2012. Full-year 2013 earnings were driven by milder-than-normal weather,
offset by retail revenue associated with new generating capacity at Southern
Company's traditional operating companies.

"Southern Company remained focused on the fundamentals in 2013, delivering
excellent reliability – including record transmission and distribution
reliability – the best customer satisfaction among peer utilities and our
safest year ever," said Southern Company Chairman, President and CEO Thomas A.
Fanning. "We continued to raise the bar while experiencing one of the mildest
summers in the past 20 years, the highest rainfall in nearly 100 years and
slower-than-expected economic growth, especially during the first half of the
year."

Fanning said the company saw stronger economic growth in the second half of
2013 compared to the first six months of the year. This trend was highlighted
by an increase in industrial activity, as well as continued improvement in
housing markets.

Operating revenues for the full year were $17.09 billion, compared with $16.54
billion in 2012, a 3.3 percent increase. Fourth quarter revenues were $3.93
billion, compared with $3.70 billion for the same period in 2012, an increase
of 6.0 percent.

Kilowatt-hour sales to retail customers in Southern Company's four-state
service area increased 0.3 percent in 2013, compared with 2012. Residential
and industrial energy sales increased 0.2 percent and 1.5 percent,
respectively, while commercial energy sales decreased 0.9 percent.

Total energy sales to Southern Company's customers in the Southeast, including
wholesale sales, decreased 0.1 percent in 2013 compared with 2012.

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 nearly 46,000 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. 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, 2012, 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, 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, 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 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
include the development and construction of facilities with designs that have
not been finalized or previously constructed, including the impact of factors
such as labor costs and productivity, adverse weather conditions, shortages
and inconsistent quality of equipment, materials, and labor, or contractor or
supplier delay or non-performance under construction or other agreements,
delays associated with start-up activities, including major equipment failure,
system integration, and operations, and/or unforeseen engineering problems;
ability to construct facilities in accordance with the requirements of permits
and licenses and to satisfy any operational and environmental performance
standards, including the requirements of tax credits and other incentives;
investment performance of Southern Company's employee and retiree benefit
plans and the Southern Company system's 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 ("PSC") approvals, Nuclear Regulatory Commission actions,
and potential U.S. Department of Energy loan guarantees; actions related to
cost recovery for the Kemper County integrated coal gasification combined
cycle facility ("Kemper IGCC"), including actions relating to proposed
securitization, Mississippi PSC approval of Mississippi Power Company's
proposed rate recovery plan, as revised, which includes the ability to
complete the proposed sale of an interest in the Kemper IGCC to South
Mississippi Electric Power Association, the ability to utilize bonus
depreciation, which currently requires that the Kemper IGCC be placed in
service in 2014, and satisfaction of requirements to utilize investment tax
credits and grants; Mississippi PSC review of the prudence of Kemper IGCC
costs; the outcome of any legal or regulatory proceedings regarding the
Mississippi PSC's issuance of the Certificate of Public Convenience and
Necessity for the Kemper IGCC, the settlement agreement between Mississippi
Power Company and the Mississippi PSC, or the State of Mississippi legislation
designed to enhance the Mississippi PSC's authority to facilitate development
and construction of baseload generation in the State of Mississippi; the
inherent risks involved in operating and constructing nuclear generating
facilities, including environmental, health, regulatory, natural disaster,
terrorism, and financial risks; 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.



Page 3
Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
                                        Three Months Ended  Year-to-Date

                                        December            December
                                        2013       2012     2013      2012
Consolidated Earnings–As Reported
(See Notes)
Traditional Operating Companies         $ 386      $ 349    $ 1,485   $ 2,146
Southern Power                          24         31       166       175
Total                                   410        380      1,651     2,321
Parent Company and Other                4          3        (7)       29
Net Income–As Reported                  $ 414      $ 383    $ 1,644   $ 2,350
Basic Earnings Per Share                $ 0.47     $ 0.44   $ 1.88    $ 2.70
 Average Shares Outstanding (in        885        869      877       871
millions)
 End of Period Shares Outstanding                          888       868
(in millions)
                                        Three Months Ended  Year-to-Date

                                        December            December
                                        2013       2012     2013      2012
Consolidated Earnings–Excluding Items
(See Notes)
Net Income–As Reported                  $ 414      $ 383    $ 1,644   $ 2,350
Estimated Loss on Kemper IGCC           25         —        729       —
Leveraged Lease Restructure             —          —        16        —
MC Asset Recovery Insurance             (12)       —        (12)      (21)
Settlement, net
Net Income–Excluding Items              $ 427      $ 383    $ 2,377   $ 2,329
Basic Earnings Per Share–Excluding      $ 0.48     $ 0.44   $ 2.71    $ 2.68
Items

Notes
- For the three and twelve months ended December 31, 2013 and the three months
ended December 31, 2012, dilution does not change basic earnings per share by
more than 1 cent and is not material. For the twelve months ended December
31, 2012, dilution does not change basic earnings per share by more than 3
cents and is not material.
- The estimated probable losses relating to Mississippi Power Company's
construction of the integrated coal gasification combined cycle facility in
Kemper County, Mississippi (Kemper IGCC) significantly impacted the
presentation of earnings and earnings per share for the three and twelve
months ended December 31, 2013 and similar charges are not expected to occur
with any regularity in the future, although it is possible such charges could
recur.
- The charge related to the restructuring of a leveraged lease investment that
was completed on March 1, 2013 impacted the presentation of earnings and
earnings per share for the twelve months ended December 31, 2013 and similar
charges are not expected to occur with any regularity in the future.
- Earnings for the three and twelve months ended December 31, 2013 and the
twelve months ended December 31, 2012 include insurance settlements related to
the March 2009 litigation settlement with MC Asset Recovery, LLC and similar
insurance recoveries are not expected to occur with any regularity in the
future.
- 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 quarter-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.



Page 4
Southern Company
Significant Factors Impacting EPS
                    Three Months Ended            Year-to-Date

                    December                      December
                    2013     2012       Change    2013    2012     Change
Consolidated
Earnings Per
Share–
As Reported (See    $ 0.47   $ 0.44     $ 0.03    $ 1.88  $ 2.70   $ (0.82)
Notes)
Significant
Factors:
Traditional
Operating                               0.05                       (0.75)
Companies
Southern Power                          (0.01)                     (0.01)
Parent Company and                      —                          (0.04)
Other
Increase in Shares                      (0.01)                     (0.02)
Total–As Reported                       $ 0.03                     $ (0.82)
                    Three Months Ended            Year-to-Date

                    December                      December
                    2013     2012       Change    2013    2012     Change
Consolidated
Earnings Per
Share–
Excluding Items     $ 0.48   $ 0.44     $ 0.04    $ 2.71  $ 2.68   $ 0.03
(See Notes)
Total–As Reported                       0.03                       (0.82)
Estimated Loss on                       0.03                       0.83
Kemper IGCC
Leveraged Lease                         —                          0.02
Restructure
MC Asset Recovery
Insurance                               (0.02)                     —
Settlement
Total–Excluding                         $ 0.04                     $ 0.03
Items

Notes
- For the three and twelve months ended December 31, 2013 and the three months
ended December 31, 2012, dilution does not change basic earnings per share by
more than 1 cent and is not material. For the twelve months ended December
31, 2012, dilution does not change basic earnings per share by more than 3
cents and is not material.
- The estimated probable losses relating to Mississippi Power Company's
construction of the integrated coal gasification combined cycle facility in
Kemper County, Mississippi (Kemper IGCC) significantly impacted the
presentation of earnings and earnings per share for the three and twelve
months ended December 31, 2013 and similar charges are not expected to occur
with any regularity in the future, although it is possible such charges could
recur.
- The charge related to the restructuring of a leveraged lease investment that
was completed on March 1, 2013 impacted the presentation of earnings and
earnings per share for the twelve months ended December 31, 2013 and similar
charges are not expected to occur with any regularity in the future.
- Earnings for the three and twelve months ended December 31, 2013 and the
twelve months ended December 31, 2012 include insurance settlements related to
the March 2009 litigation settlement with MC Asset Recovery, LLC and similar
insurance recoveries are not expected to occur with any regularity in the
future.
- 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 quarter-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.



Page 5
Southern Company
EPS Earnings Analysis
                                        Three Months Ended Year-to-Date
Description
                                        December 2013      December 2013
Retail Sales                            1¢                 1¢
Retail Revenue Impacts                  —                  10
Weather                                 3                  (3)
Wholesale Revenues                      —                  (2)
Other Operating Revenues                1                  2
Non-Fuel O&M                            (2)                (3)
Purchased Power Capacity Expense        —                  2
Depreciation and Amortization           (1)                (6)
Taxes Other Than Income Taxes           —                  (1)
Other Income and Deductions             2                  6
Interest Expense                        1                  3
Income Taxes                            2                  (2)
Total Traditional Operating Companies   7¢                 7¢
Southern Power                          (1)                (1)
Parent and Other                        (1)                (1)
Increase in Shares                      (1)                (2)
Total Change in EPS (x-Items)           4¢                 3¢
Estimated Loss on Kemper IGCC           (3)                (83)
Leveraged Lease Restructure             —                  (2)
MC Asset Recovery Insurance Settlement  2                  —
Total Change in QTD EPS (As Reported)   3¢                 (82)¢

Notes
- The estimated probable loss relating to Mississippi Power Company's
construction of the integrated coal gasification combined cycle facility in
Kemper County, Mississippi (Kemper IGCC) significantly impacted the
presentation of earnings and earnings per share for the three and twelve
months ended December 31, 2013 and similar charges are not expected to occur
with any regularity in the future, although it is possible such charges could
recur.
- The charge related to the restructuring of a leveraged lease investment that
was completed on March 1, 2013 impacted the presentation of earnings and
earnings per share for the twelve months ended December 31, 2013 and similar
charges are not expected to occur with any regularity in the future.
- Earnings for the three and twelve months ended December 31, 2013 and the
twelve months ended December 31, 2012 include insurance settlements related to
the March 2009 litigation settlement with MC Asset Recovery, LLC and similar
insurance recoveries are not expected to occur with any regularity in the
future.
- All figures in this earnings release are preliminary and remain subject to
the completion of normal quarter-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.



Page 6
Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
                      Three Months Ended          Year-to-Date
                      December
                                                  December
                      2013      2012      Change  2013      2012      Change
Income Account-
Retail Revenues-
Fuel                  $ 1,160   $ 1,034   $ 126   $ 4,990   $ 4,743   $ 247
Non-Fuel              2,144     2,085     59      9,551     9,444     107
Wholesale Revenues    449       414       35      1,855     1,675     180
Other Electric        162       157       5       639       616       23
Revenues
Non-regulated         12        13        (1)     52        59        (7)
Operating Revenues
Total Revenues        3,927     3,703     224     17,087    16,537    550
Fuel and Purchased    1,388     1,239     149     5,971     5,601     370
Power
Non-fuel O & M        1,008     974       34      3,857     3,791     66
MC Asset Recovery     (11)      —         (11)    (11)      (19)      8
Insurance Settlement
Depreciation and      479       452       27      1,901     1,787     114
Amortization
Taxes Other Than      224       224       —       934       914       20
Income Taxes
Estimated Loss on     40        —         40      1,180     —         1,180
Kemper IGCC
Total Operating       3,128     2,889     239     13,832    12,074    1,758
Expenses
Operating Income      799       814       (15)    3,255     4,463     (1,208)
Allowance for Equity
Funds Used During     51        41        10      190       143       47
Construction
Leveraged Lease       6         5         1       (5)       21        (26)
Income (Loss)
Interest Income       5         6         (1)     19        40        (21)
Interest Expense,
Net of Amounts        196       210       (14)    824       859       (35)
Capitalized
Other Income          (42)      (21)      (21)    (76)      (59)      (17)
(Expense), net
Income Taxes          192       236       (44)    849       1,334     (485)
Net Income            431       399       32      1,710     2,415     (705)
Dividends on
Preferred and         17        16        1       66        65        1
Preference Stock of
Subsidiaries
NET INCOME AFTER
DIVIDENDS ON          $ 414     $ 383     $ 31    $ 1,644   $ 2,350   $ (706)
PREFERRED AND
PREFERENCE STOCK

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 quarter-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.



Page 7
Southern Company
Kilowatt-Hour Sales
(In Millions of KWHs)
               Three Months Ended December          Year-to-Date December
As Reported                               Weather                                Weather
               2013     2012     Change   Adjusted  2013      2012      Change   Adjusted
(See Notes)                               Change                                 Change*
Kilowatt-Hour
Sales-
Total Sales    43,983   42,543   3.4   %            183,401   183,617   (0.1) %
Total Retail   37,535   36,109   3.9   %  1.7    %  156,457   156,054   0.3   %  0.4    %
Sales-
Residential    11,805   11,140   6.0   %  0.5    %  50,575    50,454    0.2   %  (0.3)  %
Commercial     12,442   12,273   1.4   %  (0.1)  %  52,551    53,007    (0.9) %  (0.1)  %
Industrial     13,067   12,468   4.8   %  4.8    %  52,429    51,674    1.5   %  1.5    %
Other          221      228      (3.2) %  (3.3)  %  902       919       (1.8) %  (1.9)  %
Total
Wholesale      6,448    6,434    0.2   %  N/A       26,944    27,563    (2.2) %  N/A
Sales

Notes
* Also reflects reclassification of January 2012 KWH sales among customer
classes consistent with actual advanced meter data. Use of actual advanced
meter data was implemented during the first quarter of 2012.



Page 8
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
                  Three Months Ended            Year-to-Date

                  December                      December
                  2013      2012      % Change  2013       2012       % Change
Consolidated –
Operating         $ 3,927   $ 3,703   6.0    %  $ 17,087   $ 16,537   3.3    %
Revenues
Earnings Before   623       635       (1.9)  %  2,559      3,749      (31.7) %
Income Taxes
Net Income
Available to      414       383       8.1    %  1,644      2,350      (30.0) %
Common
Alabama Power –
Operating         $ 1,314   $ 1,290   1.9    %  $ 5,618    $ 5,520    1.8    %
Revenues
Earnings Before   237       205       15.6   %  1,229      1,220      0.7    %
Income Taxes
Net Income
Available to      140       113       23.9   %  712        704        1.1    %
Common
Georgia Power –
Operating         $ 1,866   $ 1,735   7.6    %  $ 8,274    $ 7,998    3.5    %
Revenues
Earnings Before   335       315       6.3    %  1,914      1,873      2.2    %
Income Taxes
Net Income
Available to      208       181       14.9   %  1,174      1,168      0.5    %
Common
Gulf Power –
Operating         $ 343     $ 331     3.6    %  $ 1,440    $ 1,440    —      %
Revenues
Earnings Before   44        39        13.1   %  212        211        0.2    %
Income Taxes
Net Income
Available to      25        23        12.2   %  124        126        (1.2)  %
Common
Mississippi
Power –
Operating         $ 268     $ 236     13.5   %  $ 1,145    $ 1,036    10.5   %
Revenues
Earnings Before   1         (36)      N/M       (843)      122        N/M
Income Taxes
Net Income
Available to      13        (15)      N/M       (477)      100        N/M
Common
Southern Power –
Operating         $ 300     $ 292     3.0    %  $ 1,275    $ 1,186    7.5    %
Revenues
Earnings Before   32        48        (33.2) %  211        268        (21.1) %
Income Taxes
Net Income
Available to      24        31        (24.9) %  166        175        (5.6)  %
Common
N/M - not
meaningful

Notes
- Mississippi Power Company restated its 2012 financial statements to reflect
a pre-tax charge to income for the estimated probable loss on Kemper IGCC of
$78 million ($48 million after tax) in 2012. Southern Company evaluated the
portion of the estimated probable loss related to 2012 and concluded it was
not material to Southern Company. Therefore, Southern Company reflected the
pre-tax charge to income for this portion of the estimated probable loss
related to 2012 in the first quarter 2013.
- 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 quarter-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: Southern Company Media Relations, 404-506-5333 or
1-866-506-5333, www.southerncompany.com; Investor Relations: Dan Tucker,
404-506-5310, dstucker@southernco.com
 
Press spacebar to pause and continue. Press esc to stop.