EX-99.02 3 ex9902-financialhighli.htm EXHIBIT 99.02 Exhibit


Exhibit 99.02
 
Page 1
 
Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
December
 
Year-to-Date
December
Net Income–As Reported (See Notes)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
  Traditional Electric Operating Companies
 
$
210

 
$
407

 
$
2,929

 
$
2,117

  Southern Power
 
23

 
(48
)
 
339

 
187

Southern Company Gas
 
238

 
78

 
585

 
372

  Total
 
471

 
437

 
3,853

 
2,676

  Parent Company and Other
 
(31
)
 
(159
)
 
886

 
(450
)
  Net Income–As Reported
 
$
440

 
$
278

 
$
4,739

 
$
2,226

 
 
 
 
 
 
 
 
 
  Basic Earnings Per Share1
 
$
0.42

 
$
0.27

 
$
4.53

 
$
2.18

 
 
 
 
 
 
 
 
 
  Average Shares Outstanding (in millions)
 
1,052

 
1,034

 
1,046

 
1,020

  End of Period Shares Outstanding (in millions)
 
 
 
 
 
1,053

 
1,034

 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures
 
Three Months Ended
December
 
Year-to-Date
December
Net Income–Excluding Items (See Notes)
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
  Net Income–As Reported
 
$
440

 
$
278

 
$
4,739

 
$
2,226

Less:
 
 
 
 
 
 
 
 
Acquisition, Disposition, and Integration Impacts2
 
39

 
(58
)
 
2,516

 
35

Tax Impact
 
48

 
11

 
(1,081
)
 
(294
)
Estimated Loss on Plants Under Construction3
 
(11
)
 
6

 
(27
)
 
(1,102
)
Tax Impact
 
(4
)
 
94

 
—

 
376

Wholesale Gas Services4
 
136

 
(41
)
 
215

 
42

Tax Impact
 
(34
)
 
14

 
(52
)
 
(4
)
Asset Impairment5
 
(16
)
 
—

 
(108
)
 
—

Tax Impact
 
(1
)
 
—

 
26

 
—

Litigation Settlement6
 
—

 
—

 
—

 
24

Tax Impact
 
—

 
—

 
—

 
(6
)
Earnings Guidance Comparability Item:
 
 
 
 
 
 
 
 
Adoption of Tax Reform6
 
—

 
(4
)
 
—

 
27

  Net Income–Excluding Items
 
$
283

 
$
256

 
$
3,250

 
$
3,128

 
 
 
 
 
 
 
 
 
  Basic Earnings Per Share–Excluding Items
 
$
0.27

 
$
0.25

 
$
3.11

 
$
3.07

 
 
 
 
 
 
 
 
 
-See Notes on the following page.






 
Exhibit 99.02
 
Page 2
 
Southern Company
 
Financial Highlights
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
(1)
Dilutive impacts are immaterial ($0.03 or less per share) in all periods. Diluted earnings per share was $0.42 and $4.50 for the three and twelve months ended December 31 2019, respectively, and $0.27 and $2.17 for the three and twelve months ended December 31, 2018, respectively.
 
 
(2)
Earnings for the three months ended December 31, 2019 include: (i) a $70 million pre-tax ($102 million after- tax) increase for the gain on the sale of Gulf Power; (ii) a $24 million pre-tax ($17 million after-tax) impairment charge in contemplation of the pending sale of Pivotal LNG and Atlantic Coast Pipeline; and (iii) a net $7 million pre-tax reduction to earnings (net $2 million after-tax increase to earnings) of other acquisition, disposition, and integration impacts. Earnings for the twelve months ended December 31, 2019 include: (i) a $2.6 billion pre-tax ($1.4 billion after-tax) gain on the sale of Gulf Power; (ii) a $23 million pre-tax ($88 million after-tax) gain on the sale of Plant Nacogdoches; and (iii) $18 million pre tax ($11 million after tax) of other acquisition, disposition, and integration impacts, partially offset by: (i) a $58 million pre-tax ($52 million after-tax) net loss, including impairment charges, associated with the sales of PowerSecure's utility infrastructure services and lighting businesses and (ii) a $24 million pre-tax ($17 million after-tax) impairment charge in contemplation of the pending sale of Pivotal LNG and Atlantic Coast Pipeline. Earnings for the three months ended December 31, 2018 include: (i) a net combined $27 million pre-tax loss (net combined $15 million after-tax loss) to reflect the final adjustments for the sales of Elizabethtown Gas, Elkton Gas, Florida City Gas, and Pivotal Home Solutions and (ii) other acquisition, disposition, and integration costs of $31 million pre tax ($32 million after tax). Earnings for the twelve months ended December 31, 2018 include: (i) a net combined $249 million pre-tax gain ($93 million after-tax loss) on the sales of Elizabethtown Gas, Elkton Gas, Florida City Gas, and Pivotal Home Solutions, including a related impairment charge; (ii) a $119 million pre-tax ($89 million after-tax) impairment charge associated with the sales of Plants Stanton and Oleander; and (iii) $95 million pre tax ($77 million after tax) of other acquisition, disposition, and integration costs. Further impacts are expected to be recorded in 2020 in connection with the sale of Plant Mankato and the pending sale of Pivotal LNG and Atlantic Coast Pipeline.
 
 
(3)
Earnings for the three and twelve months ended December 31, 2019 and 2018 include charges, associated legal expenses, and tax impacts related to Mississippi Power's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Additionally, the three and twelve months ended December 31, 2018 include a $95 million credit to earnings primarily resulting from the reduction of a related state income tax valuation allowance. Mississippi Power expects to substantially complete mine reclamation activities in 2020 and dismantlement of the abandoned gasifier-related assets and site restoration activities by 2024. The additional pre-tax period costs associated with these activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, are estimated to total $17 million in 2020, $15 to $16 million annually in 2021 through 2023, and $5 million in 2024. Earnings for the twelve months ended December 31, 2018 also include a $1.1 billion charge ($0.8 billion after tax) for an estimated probable loss on Georgia Power's construction of Plant Vogtle Units 3 and 4. Further charges for Georgia Power's Plant Vogtle Units 3 and 4 may occur; however, the amount and timing of any such charges are uncertain.
 
 
 
 
 
 
 
 
 
 
(4)
Earnings for the three and twelve months ended December 31, 2019 and 2018 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.
 
 
 
 
 
 
 
 
 
 
(5)
Earnings for the twelve months ended December 31, 2019 include a pre-tax impairment charge of $91 million ($69 million after tax) associated with a natural gas storage facility and earnings for the three months ended December 31, 2019 include an adjustment of $(1) million pre tax ($4 million after tax) of this impairment charge. Additionally, earnings for the three and twelve months ended December 31, 2019 include a pre-tax impairment charge of $17 million ($13 million after tax) related to a leveraged lease. Additional impairment charges associated with other natural gas storage facilities or this leveraged lease investment may occur; however, the amount and timing of any such charges are uncertain.
 
 
 
 
 
 
 
 
 
 
(6)
Earnings for the twelve months ended December 31, 2018 include the settlement proceeds of Mississippi Power's claim for lost revenue resulting from the 2010 Deepwater Horizon oil spill and earnings for the three and twelve months ended December 31, 2018 include additional net tax benefits as a result of implementing federal tax reform legislation. Additional proceeds or adjustments are not expected.