SOUTHERN COMPANY ATLANTA, July 29, 2015 /PRNewswire/ -- Southern Company today reported second-quarter 2015 earnings of $629 million, or 69 cents per share, compared with earnings of $611 million, or 68 cents per share, in the second quarter of 2014. For the six months ended June 30, 2015, earnings were $1.14 billion, or $1.25 per share, compared with $962 million, or $1.08 per share, for the same period in 2014.
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Earnings for the three and six months ended June 30, 2015, include after-tax charges of $14 million and $20 million, respectively, related to increased construction estimates for Mississippi Power's Kemper County integrated gasification combined-cycle (IGCC) project. Earnings for the six months ended June 30, 2014, include an after-tax charge of $235 million, or 26 cents per share, related to the Kemper County IGCC project. Earnings for the three and six months ended June 30, 2015, also include a $4 million after-tax charge related to the discontinued operations of Mirant and the March 2009 settlement agreement with MC Asset Recovery, LLC.
Excluding these items, Southern Company earned $647 million, or 71 cents per share, during the second quarter of 2015, compared with earnings of $611 million, or 68 cents per share, during the second quarter of 2014. For the first six months of 2015, excluding these items, Southern Company earned $1.16 billion, or $1.28 per share, compared with earnings of $1.20 billion, or $1.34 per share, for the same period in 2014.
Earnings for the second quarter of 2015 were positively influenced by retail revenue effects at Southern Company's traditional operating companies, warmer weather and stronger than expected performance of its Southern Power subsidiary. Earnings were negatively influenced by increased non-fuel operations and maintenance expenses.
"We are encouraged by positive customer growth during the second quarter of 2015, particularly in the residential sector," said Southern Company Chairman, President and CEO Thomas A. Fanning. "Also, for the first time since 2004, we have experienced two consecutive quarters of weather-normalized growth in all three customer classes - residential, commercial and industrial - as our region continues to grow faster than the U.S. as a whole."
Second-quarter 2015 operating revenues were $4.34 billion, compared with $4.47 billion for the second quarter of 2014, a decrease of 2.9 percent. For the six months ended June 30, 2015, operating revenues were $8.52 billion, compared with $9.11 billion for the same period in 2014, a decrease of 6.5 percent.
Kilowatt-hour sales to retail customers in Southern Company's four-state service area increased 2.2 percent in the second quarter of 2015, compared with the second quarter of 2014. Residential energy sales increased 4.6 percent, commercial energy sales increased 2.3 percent and industrial energy sales increased 0.1 percent. For the first six months of 2015, retail sales increased 0.5 percent, compared with the same period in 2014. Residential energy sales decreased 0.2 percent, commercial energy sales increased 0.7 percent and industrial energy sales increased 1.0 percent.
Weather-adjusted kilowatt-hour sales to retail customers in Southern Company's four-state service area increased 0.7 percent in the second quarter of 2015, compared with the second quarter of 2014. Weather-adjusted residential energy sales increased 1.2 percent, weather-adjusted commercial energy sales increased 0.7 percent and industrial energy sales increased 0.2 percent. For the first six months of 2015, weather-adjusted retail sales increased 0.8 percent, compared with the same period in 2014. Weather-adjusted residential energy sales increased 0.7 percent, weather-adjusted commercial energy sales increased 0.7 percent and industrial energy sales increased 1.1 percent.
Total energy sales to Southern Company's customers in the Southeast, including wholesale sales, increased 2.1 percent in the second quarter of 2015, compared with the second quarter of 2014. For the first six months of 2015, total energy sales decreased 0.6 percent, compared with the same period in 2014.
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/webcasts. A replay of the webcast will be available at the site for 12 months.
Southern Company has also posted on its website detailed financial information on its second quarter performance. These materials are available at www.southerncompany.com.
With more than 4.5 million customers and approximately 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 excellent customer service, high reliability and affordable prices that are below the national average. Through an industry-leading commitment to innovation, Southern Company and its subsidiaries are inventing America's energy future by developing the full portfolio of energy resources, including nuclear, 21st century coal, natural gas, renewables and energy efficiency, and creating new products and services for the benefit of customers. Southern Company has been named by the U.S. Department of Defense and G.I. Jobs magazine as a top military employer, listed by Black Enterprise magazine as one of the 40 Best Companies for Diversity and designated a 2014 Top Employer for Hispanics by Hispanic Network. The company earned the 2014 National Award of Nuclear Science and History by the National Atomic Museum Foundation for its leadership and commitment to nuclear development, 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.
Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
Three Months Ended Year-to-Date
June June
---- ----
2015 2014 2015 2014
---- ---- ---- ----
Consolidated Earnings-As Reported
(See Notes)
Traditional Operating Companies $561 $580 $1,038 $899
Southern Power 46 31 79 64
--- --- --- ---
Total 607 611 1,117 963
Parent Company and Other 22 - 21 (1)
--- --- --- ---
Net Income-As Reported $629 $611 $1,138 $962
==== ==== ====== ====
Basic Earnings Per Share $0.69 $0.68 $1.25 $1.08
Average Shares Outstanding (in millions) 909 895 910 892
End of Period Shares Outstanding (in millions) 908 896
Three Months Ended Year-to-Date
June
June
----
2015 2014 2015 2014
---- ---- ---- ----
Consolidated Earnings-Excluding Items
(See Notes)
Net Income-As Reported $629 $611 $1,138 $962
Estimated Loss on Kemper IGCC 14 - 20 235
Additional MCAR settlement costs 4 - 4 -
Net Income-Excluding Items $647 $611 $1,162 $1,197
==== ==== ====== ======
Basic Earnings Per Share-Excluding Items $0.71 $0.68 $1.28 $1.34
Notes
-----
-For the three and six months
ended June 30, 2015 and 2014,
dilution does not change basic
earnings per share by more than 1
cent 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 six months ended June 30, 2015
and the six months ended June 30,
2014. Similar charges may occur
with uncertain frequency.
-Earnings for the three and six
months ended June 30, 2015 include
additional costs related to the
discontinued operations of Mirant
Corporation and the March 2009
litigation settlement with MC
Asset Recovery, LLC. Further
charges are not expected to occur.
- 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-Q.
Southern Company
Significant Factors Impacting EPS
Three Months Ended Year-to-Date
June
June
----
2015 2014 Change 2015 2014 Change
---- ---- ------ ---- ---- ------
Consolidated Earnings Per Share-
As Reported (See Notes) $0.69 $0.68 $0.01 $1.25 $1.08 $0.17
Significant Factors:
Traditional Operating Companies $(0.02) $0.16
Southern Power 0.02 0.02
Parent Company and Other 0.02 0.02
Increase in Shares (0.01) (0.03)
----- -----
Total-As Reported $0.01 $0.17
===== =====
Three Months Ended Year-to-Date
June
June
----
2015 2014 Change 2015 2014 Change
---- ---- ------ ---- ---- ------
Consolidated Earnings Per Share-
Excluding Items (See Notes) $0.71 $0.68 $0.03 $1.28 $1.34 $(0.06)
Total-As Reported $0.01 $0.17
Estimated Loss on Kemper IGCC 0.02 (0.24)
Additional MCAR settlement costs - 0.01
Total-Excluding Items $0.03 $(0.06)
===== ======
Notes
-----
-For the three and six months
ended June 30, 2015 and 2014,
dilution does not change basic
earnings per share by more than 1
cent 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 six months ended June 30, 2015
and the six months ended June 30,
2014. Similar charges may occur
with uncertain frequency.
-Earnings for the three and six
months ended June 30, 2015 include
additional costs related to the
discontinued operations of Mirant
Corporation and the March 2009
litigation settlement with MC
Asset Recovery, LLC. Further
charges are not expected to occur.
These costs were the same for the
three and six months ended June
30, 2015; however, these costs on
a per share basis differ between
the periods due to the effects of
rounding.
- 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-Q.
Southern Company
EPS Earnings Analysis
Three Months Ended June 2015 vs. June 2014
Cents Description
----- -----------
1¢ Retail Sales
3 Retail Revenue Impacts
3 Weather
(1) Wholesale Operations
(1) Other Operating Revenues
(5) Non-Fuel O&M
1 Depreciation and Amortization
(3) Other Income and Deductions
2 Interest Expense
-¢ Total Traditional Operating
Companies
--- ----------------------------
2 Southern Power
2 Parent and Other
(1) Increase in Shares
3¢ Total Change in QTD EPS
(Excluding Items)
--- ------------------------
(2) Estimated Loss on Kemper IGCC
-----------------------------
1¢ Total Change in QTD EPS (As
Reported)
--- ----------------------------
Notes
-----
-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) impacted
the presentation of earnings per share for the three
months ended June 30, 2015 and any similar charges
may occur with uncertain frequency.
- 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-Q.
Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
Three Months Ended June Year-to-Date June
----------------------- -----------------
2015 2014 Change 2015 2014 Change
---- ---- ------ ---- ---- ------
Income Account-
Retail Revenues-
Fuel $1,130 $1,296 $(166) $2,218 $2,772 $(554)
Non-Fuel 2,584 2,474 110 5,038 4,856 182
Wholesale Revenues 448 515 (67) 915 1,119 (204)
Other Electric Revenues 162 169 (7) 325 334 (9)
Other Revenues 13 13 - 24 30 (6)
--- --- --- --- --- ---
Total Revenues 4,337 4,467 (130) 8,520 9,111 (591)
----- ----- ---- ----- ----- ----
Fuel and Purchased Power 1,371 1,595 (224) 2,727 3,429 (702)
Non-Fuel O & M 1,100 1,019 81 2,222 2,005 217
Depreciation and Amortization 500 504 (4) 987 1,001 (14)
Taxes Other Than Income Taxes 245 246 (1) 497 493 4
Estimated Loss on Kemper IGCC 23 - 23 32 380 (348)
--- --- --- --- --- ----
Total Operating Expenses 3,239 3,364 (125) 6,465 7,308 (843)
----- ----- ---- ----- ----- ----
Operating Income 1,098 1,103 (5) 2,055 1,803 252
Allowance for Equity Funds Used During Construction 39 62 (23) 102 119 (17)
Interest Expense, Net of Amounts Capitalized 180 210 (30) 393 416 (23)
Other Income (Expense), net (12) (6) (6) (19) (13) (6)
Income Taxes 302 321 (19) 576 497 79
--- --- --- ---
Net Income 643 628 15 1,169 996 173
Dividends on Preferred and Preference Stock of Subsidiaries 14 17 (3) 31 34 (3)
--- --- --- --- --- ---
NET INCOME AFTER DIVIDENDS ON PREFERRED AND PREFERENCE
STOCK $629 $611 $18 $1,138 $962 $176
==== ==== === ====== ==== ====
Notes
-----
-Certain prior year data may have
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-Q.
Southern Company
Kilowatt-Hour Sales
(In Millions of KWHs)
Three Months Ended June Year-to-Date June
----------------------- -----------------
As Reported 2015 2014 Change Weather 2015 2014 Change Weather
Adjusted Adjusted
Change* Change*
------ ------
Kilowatt-Hour Sales-
Total Sales 47,878 46,903 2.1% 94,123 94,705 (0.6)%
Total Retail Sales- 40,072 39,198 2.2% 0.7% 79,281 78,897 0.5% 0.8%
Residential 12,548 12,001 4.6% 1.2% 26,125 26,175 (0.2)% 0.7%
Commercial 13,654 13,343 2.3% 0.7% 26,069 25,891 0.7% 0.7%
Industrial 13,645 13,629 0.1% 0.2% 26,633 26,378 1.0% 1.1%
Other 225 225 (0.3)% (0.4)% 454 453 0.2% 0.2%
Total Wholesale Sales 7,806 7,705 1.3% N/A 14,842 15,808 (6.1)% N/A
Note
----
*Also reflects adjustment of
2014 KWH sales consistent with
Mississippi Power's updated
methodology to estimate the
unbilled revenue allocation
among customer classes
implemented in the first
quarter 2015.
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
Three Months Ended June Year-to-Date June
----------------------- -----------------
2015 2014 % Change 2015 2014 % Change
---- ---- -------- ---- ---- --------
Consolidated -
Operating Revenues $4,337 $4,467 (2.9)% $8,520 $9,111 (6.5)%
Earnings Before Income Taxes 945 949 (0.4)% 1,745 1,493 16.9%
Net Income Available to Common 629 611 2.9% 1,138 962 18.3%
Alabama Power -
Operating Revenues $1,455 $1,437 1.3% $2,856 $2,945 (3.0)%
Earnings Before Income Taxes 329 302 8.9% 621 626 (0.8)%
Net Income Available to Common 200 173 15.6% 369 360 2.5%
Georgia Power -
Operating Revenues $2,016 $2,186 (7.8)% $3,994 $4,455 (10.3)%
Earnings Before Income Taxes 462 493 (6.3)% 842 929 (9.4)%
Net Income Available to Common 277 311 (10.9)% 513 577 (11.1)%
Gulf Power -
Operating Revenues $384 $384 - % $741 $791 (6.3)%
Earnings Before Income Taxes 59 58 1.7% 121 120 0.8%
Net Income Available to Common 35 34 2.9% 72 71 1.4%
Mississippi Power -
Operating Revenues $275 $311 (11.6)% $552 $642 (14.0)%
Earnings (Loss) Before Income Taxes 66 79 (16.5)% 105 (223) N/M
Net Income (Loss) Available to Common 49 62 (21.0)% 84 (110) N/M
Southern Power -
Operating Revenues $337 $329 2.4% $684 $680 0.6%
Earnings Before Income Taxes 53 29 82.8% 98 66 48.5%
Net Income Available to Common 46 31 48.4% 79 64 23.4%
N/M - not meaningful
Note
----
- 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-Q.
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SOURCE Southern Company
