FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2019

Assets and liabilities measured at fair value on a recurring basis

The fair value increases (decreases) of the Funds, including unrealized gains (losses) and reinvested interest and dividends and excluding the Funds' expenses, for 2019, 2018, and 2017 are shown in the table below.



	Southern Company			Alabama Power			Georgia Power
	(in millions)
Fair value increases (decreases)
2019	$	344		$	194		$	150
2018	(67		)	(38		)	(29		)
2017	233			125			108

Unrealized gains (losses)
At December 31, 2019	$	259		$	149		$	110
At December 31, 2018	(183		)	(96		)	(87		)
At December 31, 2017	181			98			83

At December 31, 2019, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:



	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Net Asset Value as a Practical Expedient
At December 31, 2019:	(Level 1)		(Level 2)		(Level 3)		(NAV)		Total
	(in millions)
Southern Company
Assets:
Energy-related derivatives^(a)(b)	$	388	$	267	$	22	$	—	$	677
Interest rate derivatives	—		2		—		—		2
Foreign currency derivatives	—		16		—		—		16
Investments in trusts:^(c)(d)
Domestic equity	751		135		—		—		886
Foreign equity	68		220		—		—		288
U.S. Treasury and government agency securities	—		307		—		—		307
Municipal bonds	—		85		—		—		85
Pooled funds – fixed income	—		17		—		—		17
Corporate bonds	23		297		—		—		320
Mortgage and asset backed securities	—		87		—		—		87
Private equity	—		—		—		56		56
Cash and cash equivalents	1		—		—		—		1
Other	17		5		—		—		22
Cash equivalents	1,393		2		—		—		1,395
Other investments	9		21		—		—		30
Total	$	2,650	$	1,461	$	22	$	56	$	4,189
Liabilities:
Energy-related derivatives^(a)(b)	$	442	$	254	$	7	$	—	$	703
Interest rate derivatives	—		24		—		—		24
Foreign currency derivatives	—		24		—		—		24
Contingent consideration	—		—		19		—		19
Total	$	442	$	302	$	26	$	—	$	770



	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Net Asset Value as a Practical Expedient
At December 31, 2019:	(Level 1)		(Level 2)		(Level 3)		(NAV)		Total
	(in millions)
Alabama Power
Assets:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4
Nuclear decommissioning trusts:^(c)
Domestic equity	488		123		—		—		611
Foreign equity	68		64		—		—		132
U.S. Treasury and government agency securities	—		21		—		—		21
Municipal bonds	—		1		—		—		1
Corporate bonds	23		144		—		—		167
Mortgage and asset backed securities	—		29		—		—		29
Private equity	—		—		—		56		56
Other	3		1		—		—		4
Cash equivalents	691		2		—		—		693
Other investments	—		21		—		—		21
Total	$	1,273	$	410	$	—	$	56	$	1,739
Liabilities:
Energy-related derivatives	$	—	$	24	$	—	$	—	$	24

Georgia Power
Assets:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4
Nuclear decommissioning trusts:^(c)(d)
Domestic equity	263		1		—		—		264
Foreign equity	—		152		—		—		152
U.S. Treasury and government agency securities	—		286		—		—		286
Municipal bonds	—		84		—		—		84
Corporate bonds	—		153		—		—		153
Mortgage and asset backed securities	—		57		—		—		57
Other	13		4		—		—		17
Total	$	276	$	741	$	—	$	—	$	1,017
Liabilities:
Energy-related derivatives	$	—	$	53	$	—	$	—	$	53
Interest rate derivatives	—		17		—		—		17
Total	$	—	$	70	$	—	$	—	$	70



	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Net Asset Value as a Practical Expedient
At December 31, 2019:	(Level 1)		(Level 2)		(Level 3)		(NAV)		Total
	(in millions)
Mississippi Power
Assets:
Energy-related derivatives	$	—	$	1	$	—	$	—	$	1
Cash equivalents	281		—		—		—		281
Total	$	281	$	1	$	—	$	—	$	282
Liabilities:
Energy-related derivatives	$	—	$	27	$	—	$	—	$	27

Southern Power
Assets:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Foreign currency derivatives	—		16		—		—		16
Cash equivalents	113		—		—		—		113
Total	$	113	$	19	$	—	$	—	$	132
Liabilities:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Foreign currency derivatives	—		24		—		—		24
Contingent consideration	—		—		19		—		19
Total	$	—	$	27	$	19	$	—	$	46

Southern Company Gas
Assets:
Energy-related derivatives^(a)(b)	$	388	$	255	$	22	$	—	$	665
Interest rate derivatives	—		2		—		—		2
Non-qualified deferred compensation trusts:
Domestic equity	—		11		—		—		11
Foreign equity	—		4		—		—		4
Pooled funds - fixed income	—		17		—		—		17
Cash equivalents	1		—		—		—		1
Cash equivalents	8		—		—		—		8
Total	$	397	$	289	$	22	$	—	$	708
Liabilities:
Energy-related derivatives^(a)(b)	$	442	$	147	$	7	$	—	$	596


(a)	Energy-related derivatives exclude $4 million associated with premiums and certain weather derivatives accounted for based on intrinsic value rather than fair value.


(b)	Energy-related derivatives exclude cash collateral of $99 million.


(c)	Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 under "Nuclear Decommissioning" for additional information.


(d)	Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. See Note 6 under "Nuclear Decommissioning" for additional information.

At December 31, 2018, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:



	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Net Asset Value as a Practical Expedient
At December 31, 2018:	(Level 1)		(Level 2)		(Level 3)		(NAV)		Total
	(in millions)
Southern Company
Assets:
Energy-related derivatives^(a)(b)	$	469	$	292	$	—	$	—	$	761
Foreign currency derivatives	—		75		—		—		75
Investments in trusts:^(c)(d)
Domestic equity	601		107		—		—		708
Foreign equity	53		173		—		—		226
U.S. Treasury and government agency securities	—		261		—		—		261
Municipal bonds	—		83		—		—		83
Pooled funds – fixed income	—		14		—		—		14
Corporate bonds	24		290		—		—		314
Mortgage and asset backed securities	—		68		—		—		68
Private equity	—		—		—		45		45
Cash and cash equivalents	16		—		—		—		16
Other	34		4		—		—		38
Cash equivalents	765		1		—		—		766
Other investments	—		12		—		—		12
Total	$	1,962	$	1,380	$	—	$	45	$	3,387
Liabilities:
Energy-related derivatives^(a)(b)	$	648	$	316	$	—	$	—	$	964
Interest rate derivatives	—		49		—		—		49
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		21		—		21
Total	$	648	$	388	$	21	$	—	$	1,057



	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Net Asset Value as a Practical Expedient
At December 31, 2018:	(Level 1)		(Level 2)		(Level 3)		(NAV)		Total
	(in millions)
Alabama Power
Assets:
Energy-related derivatives	$	—	$	6	$	—	$	—	$	6
Nuclear decommissioning trusts:^(c)
Domestic equity	396		95		—		—		491
Foreign equity	53		50		—		—		103
U.S. Treasury and government agency securities	—		18		—		—		18
Municipal bonds	—		1		—		—		1
Corporate bonds	24		135		—		—		159
Mortgage and asset backed securities	—		23		—		—		23
Private equity	—		—		—		45		45
Other	6		—		—		—		6
Cash equivalents	116		1		—		—		117
Other investments	—		12		—		—		12
Total	$	595	$	341	$	—	$	45	$	981
Liabilities:
Energy-related derivatives	$	—	$	10	$	—	$	—	$	10

Georgia Power
Assets:
Energy-related derivatives	$	—	$	6	$	—	$	—	$	6
Nuclear decommissioning trusts:^(c)(d)
Domestic equity	205		1		—		—		206
Foreign equity	—		119		—		—		119
U.S. Treasury and government agency securities	—		243		—		—		243
Municipal bonds	—		82		—		—		82
Corporate bonds	—		155		—		—		155
Mortgage and asset backed securities	—		45		—		—		45
Other	19		4		—		—		23
Total	$	224	$	655	$	—	$	—	$	879
Liabilities:
Energy-related derivatives	$	—	$	21	$	—	$	—	$	21
Interest rate derivatives	—		2		—		—		2
Total	$	—	$	23	$	—	$	—	$	23



	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Net Asset Value as a Practical Expedient
At December 31, 2018:	(Level 1)		(Level 2)		(Level 3)		(NAV)		Total
	(in millions)
Mississippi Power
Assets:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Cash equivalents	255		—		—		—		255
Total	$	255	$	3	$	—	$	—	$	258
Liabilities:
Energy-related derivatives	$	—	$	9	$	—	$	—	$	9

Southern Power
Assets:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4
Foreign currency derivatives	—		75		—		—		75
Cash equivalents	46		—		—		—		46
Total	$	46	$	79	$	—	$	—	$	125
Liabilities:
Energy-related derivatives	$	—	$	8	$	—	$	—	$	8
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		21		—		21
Total	$	—	$	31	$	21	$	—	$	52

Southern Company Gas
Assets:
Energy-related derivatives^(a)(b)	$	469	$	272	$	—	$	—	$	741
Non-qualified deferred compensation trusts:
Domestic equity	—		11		—		—		11
Foreign equity	—		4		—		—		4
Pooled funds - fixed income	—		14		—		—		14
Cash equivalents	4		—		—		—		4
Cash equivalents	40		—		—		—		40
Total	$	513	$	301	$	—	$	—	$	814
Liabilities:
Energy-related derivatives^(a)(b)	$	648	$	261	$	—	$	—	$	909


(a)	Energy-related derivatives exclude $8 million associated with premiums and certain weather derivatives accounted for based on intrinsic value rather than fair value.


(b)	Energy-related derivatives exclude cash collateral of $277 million.


(c)	Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 under "Nuclear Decommissioning" for additional information.

(d)

Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. See Note 6 under "Nuclear Decommissioning" for additional information.

Financial instruments not having carrying amount equal to fair value

At December 31, 2019 and 2018, other financial instruments for which the carrying amount did not equal fair value were as follows:



	Southern Company^(a)(b)		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas^(b)
	(in millions)
At December 31, 2019:
Long-term debt, including securities due within one year:
Carrying amount	$	44,561	$	8,517	$	11,660	$	1,589	$	4,398	$	5,845
Fair value	48,339		9,525		12,680		1,671		4,708		6,509
At December 31, 2018:
Long-term debt, including securities due within one year:
Carrying amount	$	45,023	$	8,120	$	9,838	$	1,579	$	5,017	$	5,940
Fair value	44,824		8,370		9,800		1,546		4,980		5,965


(a)	Amounts at December 31, 2018 include long-term debt of Gulf Power, which was classified as liabilities held for sale on Southern Company's balance sheet at December 31, 2018. See Note 15 under "Southern Company" and "Assets Held for Sale" for additional information.

(b)

The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the Merger. Southern Company Gas amortizes the fair value adjustments over the lives of the respective bonds.

Schedule of transfers to Level 3

The following table includes transfers to Level 3, which represent the fair value of Southern Company Gas' commodity derivative contracts that include a significant unobservable component for the first time during the period.



	2019
	(in millions)
Beginning balance	$	—
Transfers to Level 3	(32		)
Transfers from Level 3	3
Instruments realized or otherwise settled during period	(4		)
Changes in fair value	47
Ending balance	$	14