Segment and Related Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment and Related Information

SEGMENT AND RELATED INFORMATION

Southern Company

The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The traditional electric operating companies are vertically integrated utilities providing electric service in three Southeastern states. Southern Power develops, constructs, acquires, owns, and manages power generation assets, including renewable energy and battery energy storage projects, and sells electricity at market-based rates in the wholesale market.

Southern Company Gas distributes natural gas through its natural gas distribution utilities and is involved in several other complementary businesses including gas pipeline investments and gas marketing services.

Southern Company's reportable business segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other complementary products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $92 million and $135 million for the three months ended March 31, 2024 and 2023, respectively. Revenues from sales of natural gas from Southern Company Gas to the traditional electric operating companies and Southern Power were immaterial for both periods presented. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include providing distributed energy and resilience solutions and deploying microgrids for commercial, industrial, governmental, and utility customers, as well as investments in telecommunications. All other inter-segment revenues are not material.

Financial data for business segments and products and services for the three months ended March 31, 2024 and 2023 was as follows:

	Electric Utilities
	Traditional Electric Operating Companies		Southern Power		Eliminations		Total		Southern Company Gas		All Other		Eliminations		Consolidated
	(in millions)
Three Months Ended March 31, 2024
Operating revenues	$	4,438	$	473	$	(96)	$	4,815	$	1,707	$	161	$	(37)	$	6,646
Segment net income (loss)(a)	819		96		—		915		409		(187)		(8)		1,129
At March 31, 2024
Goodwill	$	—	$	2	$	—	$	2	$	5,015	$	144	$	—	$	5,161
Total assets	101,130		12,662		(471)		113,321		25,091		2,472		(764)		140,120
Three Months Ended March 31, 2023
Operating revenues	$	4,113	$	508	$	(138)	$	4,483	$	1,875	$	166	$	(44)	$	6,480
Segment net income (loss)(a)(b)	610		102		—		712		309		(154)		(5)		862
At December 31, 2023
Goodwill	$	—	$	2	$	—	$	2	$	5,015	$	144	$	—	$	5,161
Total assets	100,429		12,761		(545)		112,645		25,083		2,446		(843)		139,331

(a)Attributable to Southern Company.

(b)For Southern Power, includes a $16 million pre-tax gain ($12 million after tax) on the sale of spare parts.

Products and Services

	Electric Utilities' Revenues
	Retail		Wholesale		Other		Total
	(in millions)
Three Months Ended March 31, 2024	$	3,941	$	571	$	303	$	4,815
Three Months Ended March 31, 2023	3,599		599		285		4,483

	Southern Company Gas' Revenues
	Gas Distribution Operations		Gas Marketing Services		Other		Total
	(in millions)
Three Months Ended March 31, 2024	$	1,459	$	235	$	13	$	1,707
Three Months Ended March 31, 2023	1,610		246		19		1,875

Southern Company Gas

Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services. The non-reportable segments are combined and presented as all other.

Gas distribution operations is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities in four states.

Gas pipeline investments consists of joint ventures in natural gas pipeline investments including a 50% interest in SNG and a 50% joint ownership interest in the Dalton Pipeline. These natural gas pipelines enable the provision of diverse sources of natural gas supplies to the customers of Southern Company Gas. See Note 7 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.

Gas marketing services provides natural gas marketing to end-use customers primarily in Georgia and Illinois through SouthStar.

The "All other" column includes segments and subsidiaries that fall below the quantitative threshold for separate disclosure, including storage and fuels operations. The "All other" column included a natural gas storage facility in California through its sale in September 2023. See Note 15 to the financial statements in Item 8 of the Form 10-K for additional information.

Business segment financial data for the three months ended March 31, 2024 and 2023 was as follows:

	Gas Distribution Operations		Gas Pipeline Investments		Gas Marketing Services		Total		All Other		Eliminations		Consolidated
	(in millions)
Three Months Ended March 31, 2024
Operating revenues	$	1,463	$	8	$	235	$	1,706	$	6	$	(5)	$	1,707
Segment net income	302		30		65		397		12		—		409
Total assets at March 31, 2024	23,017		1,557		1,677		26,251		9,798		(10,958)		25,091
Three Months Ended March 31, 2023
Operating revenues	$	1,618	$	8	$	246	$	1,872	$	12	$	(9)	$	1,875
Segment net income	221		31		50		302		7		—		309
Total assets at December 31, 2023	22,906		1,534		1,615		26,055		9,675		(10,647)		25,083