SOUTHERN COMPANY ATLANTA, April 27, 2016 /PRNewswire/ -- Southern Company today reported first-quarter 2016 earnings of $485 million, or 53 cents per share, compared with earnings of $508 million, or 56 cents per share, in the first quarter of 2015.
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Earnings for the first quarter of 2016 include after-tax charges of $33 million, or 4 cents per share, related to an increased cost estimate for the construction of Mississippi Power's Kemper integrated gasification combined cycle (IGCC) project. First-quarter earnings for 2015 included an after-tax charge of $6 million for the Kemper IGCC project. Earnings for the first quarter of 2016 also include an after-tax charge of $14 million, or 1 cent per share, related to the proposed acquisitions of AGL Resources and PowerSecure International. Excluding these items, Southern Company earned $532 million, or 58 cents per share, during the first quarter of 2016, compared with earnings of $514 million, or 56 cents per share, in the first quarter of 2015.
Earnings drivers year-over-year for the first quarter of 2016 included retail revenue effects across the regulated operating companies and lower non-fuel operating and maintenance costs offset by mild weather and higher depreciation expenses. Wholesale subsidiary Southern Power also contributed positively year-over-year as a result of the anticipated tax benefits for 2016 renewable projects and increased revenue from 2015 renewable projects.
"Southern Company performed superbly in executing its business plan in the first quarter of 2016. We saw positive customer growth, along with strong residential and commercial sales and a robust economic development pipeline," said Southern Company Chairman, President and CEO, Thomas A. Fanning. "Our franchise operations and our competitive generation subsidiary, Southern Power, continue to perform at a high level and deliver on our core strategy of providing clean, safe, reliable and affordable energy to customers."
First-quarter 2016 operating revenues were $3.97 billion, compared with operating revenues of $4.18 billion for the same period in 2015, a decrease of 5.2 percent. This decrease was primarily due to lower fuel costs.
Kilowatt-hour sales to retail customers in Southern Company's four-state service area decreased 3.0 percent in the first quarter of 2016, compared with the first quarter of 2015. Residential energy sales decreased 7.2 percent, commercial energy sales decreased 0.7 percent and industrial energy sales decreased 0.8 percent.
Weather-adjusted kilowatt-hour sales to retail customers in Southern Company's four-state service area increased 0.4 percent in the first quarter of 2016, compared with the first quarter of 2015. Weather-adjusted residential energy sales increased 1.4 percent and weather-adjusted commercial energy sales increased 0.8 percent.
Total energy sales to the Southern Company system's customers, including wholesale sales, decreased 1.7 percent in the first quarter of 2016, compared with the same period in 2015.
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 first-quarter 2016 earnings performance. These materials are available at www.southerncompany.com.
With more than 4.5 million customers and approximately 44,000 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, 21(st) 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 from 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
March
-----
2016 2015
---- ----
Consolidated Earnings-As Reported
(See Notes)
Traditional Operating Companies $464 $477
Southern Power 50 33
--- ---
Total 514 510
Parent Company and Other (29) (2)
--- ---
Net Income-As Reported $485 $508
==== ====
Basic Earnings Per Share $0.53 $0.56
Average Shares Outstanding (in millions) 916 910
End of Period Shares Outstanding (in millions) 918 908
Three Months Ended
March
-----
2016 2015
---- ----
Consolidated Earnings-Excluding Items
(See Notes)
Net Income-As Reported $485 $508
Estimated Loss on Kemper IGCC 33 6
Acquisition Costs 14 -
Net Income-Excluding Items $532 $514
==== ====
Basic Earnings Per Share-Excluding Items $0.58 $0.56
Notes
-----
- For the three months ended March 31, 2016 and 2015, 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 months ended March 31, 2016 and any similar charges
may occur with uncertain frequency.
-Earnings for the three months ended March 31, 2016 include costs related to the proposed acquisitions of AGL Resources Inc. and PowerSecure International, Inc. Further costs are
expected to continue to occur in connection with closing the proposed acquisitions and supporting the related integrations.
- 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
March
-----
2016 2015 Change
---- ---- ------
Consolidated Earnings Per Share-
As Reported (See Notes) $0.53 $0.56 $(0.03)
Significant Factors:
Traditional Operating Companies $(0.02)
Southern Power 0.02
Parent Company and Other (0.03)
Total-As Reported $(0.03)
======
Three Months Ended
March
-----
2016 2015 Change
---- ---- ------
Consolidated Earnings Per Share-
Excluding Items (See Notes) $0.58 $0.56 $0.02
Total-As Reported $(0.03)
Estimated Loss on Kemper IGCC 0.04
Acquisition Costs 0.01
Total-Excluding Items $0.02
=====
Notes
-----
- For the three months ended March 31, 2016 and 2015, 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 months ended March 31, 2016 and any similar charges may occur with uncertain frequency.
-Earnings for the three months ended March 31, 2016 include costs related to the proposed acquisitions of AGL Resources Inc. and PowerSecure International, Inc. Further costs are expected to continue to occur in
connection with closing the proposed acquisitions and supporting the related integrations.
- 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 March 2016 vs.
March 2015
Cents Description
----- -----------
1¢ Retail Sales
8 Retail Revenue Impacts
(6) Weather
(1) Wholesale Operations
1 Other Operating Revenues
4 Non-Fuel O&M
(3) Depreciation and Amortization
(1) Other Income and Deductions
(1) Interest Expense
2¢ Total Traditional Operating
Companies
--- ----------------------------
2 Southern Power
(2) Parent and Other
2¢ Total Change in EPS (Excluding
Items)
--- -------------------------------
(4) Estimated Loss on Kemper IGCC
(1) Acquisition Costs
(3)¢ Total Change in 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) significantly impacted the
presentation of earnings and earnings per share for the
three months ended March 31, 2016 and any similar
charges may occur with uncertain frequency.
-Earnings for the three months ended March 31, 2016
include costs related to the proposed acquisitions of
AGL Resources Inc. and PowerSecure International, Inc.
Further costs are expected to continue to occur in
connection with closing the proposed acquisitions and
supporting the related integrations.
- 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
March
-----
2016 2015 Change
---- ---- ------
Income Account-
Retail Revenues-
Fuel $875 $1,088 $(213)
Non-Fuel 2,502 2,454 48
Wholesale Revenues 396 467 (71)
Other Electric Revenues 181 163 18
Other Revenues 11 11 -
--- --- ---
Total Revenues 3,965 4,183 (218)
----- ----- ----
Fuel and Purchased Power 1,076 1,356 (280)
Non-Fuel O & M 1,109 1,122 (13)
Depreciation and Amortization 541 487 54
Taxes Other Than Income Taxes 256 252 4
Estimated Loss on Kemper IGCC 53 9 44
--- --- ---
Total Operating Expenses 3,035 3,226 (191)
----- ----- ----
Operating Income 930 957 (27)
Allowance for Equity Funds Used
During Construction 53 63 (10)
Interest Expense, Net of Amounts
Capitalized 246 213 33
Other Income (Expense), net (18) (8) (10)
Income Taxes 222 274 (52)
--- --- ---
Consolidated Net Income 497 525 (28)
Less:
Dividends on Preferred and Preference
Stock of Subsidiaries 11 17 (6)
Net Income Attributable to
Noncontrolling Interests 1 - 1
=== === ===
CONSOLIDATED NET INCOME ATTRIBUTABLE
TO SOUTHERN COMPANY $485 $508 $(23)
==== ==== ====
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 March
------------------------
As Reported 2016 2015 Change Weather
Adjusted
Change*
---- ---- ------ --------
Kilowatt-Hour Sales-
Total Sales 45,476 46,244 (1.7)%
Total Retail Sales- 38,038 39,209 (3.0)% 0.4%
Residential 12,602 13,577 (7.2)% 1.4%
Commercial 12,323 12,415 (0.7)% 0.8%
Industrial 12,888 12,988 (0.8)% (1.0)%
Other 225 229 (1.7)% (1.5)%
Total Wholesale Sales 7,438 7,035 5.7% N/A
Note
----
*Also reflects adjustment of 2015 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
March
-----
2016 2015 % Change
---- ---- --------
Consolidated -
Operating Revenues $3,965 $4,183 (5.2)%
Earnings Before Income Taxes 719 799 (10.0)%
Net Income Available to Common 485 508 (4.5)%
Alabama Power -
Operating Revenues $1,331 $1,401 (5.0)%
Earnings Before Income Taxes 262 292 (10.3)%
Net Income Available to Common 155 169 (8.3)%
Georgia Power -
Operating Revenues $1,872 $1,978 (5.4)%
Earnings Before Income Taxes 432 380 13.7%
Net Income Available to Common 268 236 13.6%
Gulf Power -
Operating Revenues $335 $357 (6.2)%
Earnings Before Income Taxes 51 62 (17.7)%
Net Income Available to Common 29 37 (21.6)%
Mississippi Power -
Operating Revenues $257 $276 (6.9)%
Earnings (Loss) Before Income Taxes 1 39 (97.4)%
Net Income (Loss) Available to Common 11 35 (68.6)%
Southern Power -
Operating Revenues $315 $348 (9.5)%
Earnings Before Income Taxes 28 45 (37.8)%
Net Income Available to Common 50 33 51.5%
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
