Southern Company reports first-quarter 2023 earnings

Non-GAAP Financial Measures

Three Months Ended March

Net Income - Excluding Items (in millions)

2023

Net Income - As Reported

$862

$1,032

Less:

   Estimated Loss on Plants Under Construction

(2)

(1)

1

-

   Loss on Extinguishment of Debt

(5)

-

       Tax Impact

1

-

Net Income – Excluding Items

$867

$1,033

       Average Shares Outstanding – (in millions)                     

1,091

1,063

Basic Earnings Per Share – Excluding Items

$0.79

$0.97

Southern Company

Financial Highlights

(In Millions of Dollars Except Earnings Per Share)

Three Months Ended March

Net Income–As Reported (See Notes)

2023

2022

  Traditional Electric Operating Companies

$                     610

$                     774

  Southern Power

102

72

Southern Company Gas

309

319

  Total

1,021

1,165

  Parent Company and Other

(159)

(133)

  Net Income–As Reported

$                     862

$                 1,032

  Basic Earnings Per Share¹

$                    0.79

$                    0.97

  Average Shares Outstanding (in millions)

1,091

1,063

  End of Period Shares Outstanding (in millions)

1,090

1,063

Non-GAAP Financial Measures

Three Months Ended March

Net Income–Excluding Items (See Notes)

2023

2022

  Net Income–As Reported

$                     862

$                 1,032

Less:

Estimated Loss on Plants Under Construction²

(2)

(1)

Tax Impact

1

—

Loss on Extinguishment of Debt³

(5)

—

Tax Impact

1

—

  Net Income–Excluding Items

$                     867

$                 1,033

  Basic Earnings Per Share–Excluding Items

$                    0.79

$                    0.97

- See Notes on the following page.

Southern Company

Financial Highlights

Notes

(1)

Dilution is not material in any period presented. Diluted earnings per share was $0.79 and $0.97 for the three months ended March 31, 2023 and 2022, respectively.

(2)

Earnings for the three months ended March 31, 2023 and 2022 also include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, net of salvage, totaling approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 

(3)

Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.

Southern Company

Significant Factors Impacting EPS

Three Months Ended March

2023

2022

Change

Earnings Per Share–

As Reported¹ (See Notes)

$          0.79

$          0.97

$           (0.18)

  Significant Factors:

  Traditional Electric Operating Companies

$           (0.16)

Southern Power

0.03

Southern Company Gas

(0.01)

Parent Company and Other

(0.02)

Increase in Shares

(0.02)

  Total–As Reported

$           (0.18)

Three Months Ended March

Non-GAAP Financial Measures

2023

2022

Change

Earnings Per Share–

Excluding Items (See Notes)

$          0.79

$          0.97

$           (0.18)

  Total–As Reported

$           (0.18)

Less:

Estimated Loss on Plants Under Construction²

—

Loss on Extinguishment of Debt³

—

  Total–Excluding Items

$           (0.18)

- See Notes on the following page.

Southern Company

Significant Factors Impacting EPS

Notes

(1)

Dilution is not material in any period presented. Diluted earnings per share was $0.79 and $0.97 for the three months ended March 31, 2023 and 2022, respectively.

(2)

Earnings for the three months ended March 31, 2023 and 2022 also include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, net of salvage, totaling approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 

(3)

Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.

Southern Company

EPS Earnings Analysis

Three Months Ended March 2023 vs. March 2022

Description

Cents

Retail Sales

1¢

Retail Revenue Impacts

7

Weather

(11)

Wholesale & Other Operating Revenues

3

Non-Fuel O&M^(*)

2

Depreciation and Amortization

(14)

Interest Expense and Other

(5)

Income Taxes

1

Total Traditional Electric Operating Companies

(16)¢

Southern Power

3

Southern Company Gas

(1)

Parent Company and Other

(2)

Increase in Shares

(2)

Total Change in EPS (Excluding Items)

(18)¢

Estimated Loss on Plants Under Construction¹

—

Loss on Extinguishment of Debt²

—

Total Change in EPS (As Reported)

(18)¢

(*) Includes non-service cost-related benefits income.

- See additional Notes on the following page.

Southern Company

EPS Earnings Analysis

Notes

(1)

Earnings for the three months ended March 31, 2023 and 2022 also include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, net of salvage, totaling approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 

(2)

Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.

Southern Company

Consolidated Earnings

As Reported

(In Millions of Dollars)

Three Months Ended March

2023

2022

Change

Retail Electric Revenues-

Fuel

$       1,050

$       1,014

$              36

Non-Fuel

2,549

2,599

(50)

Wholesale Electric Revenues

599

664

(65)

Other Electric Revenues

190

177

13

Natural Gas Revenues

1,875

2,058

(183)

Other Revenues

217

136

81

Total Operating Revenues

6,480

6,648

(168)

Fuel and Purchased Power

1,292

1,343

(51)

Cost of Natural Gas

898

1,095

(197)

Cost of Other Sales

127

69

58

Non-Fuel O&M

1,482

1,516

(34)

Depreciation and Amortization

1,111

892

219

Taxes Other Than Income Taxes

394

372

22

Gain on Dispositions, net

(42)

(23)

(19)

Total Operating Expenses

5,262

5,264

(2)

Operating Income

1,218

1,384

(166)

Allowance for Equity Funds Used During Construction

65

51

14

Earnings from Equity Method Investments

48

46

2

Interest Expense, Net of Amounts Capitalized

582

462

120

Other Income (Expense), net

147

145

2

Income Taxes

97

173

(76)

Net Income

799

991

(192)

Dividends on Preferred Stock of Subsidiaries

—

4

(4)

Net Loss Attributable to Noncontrolling Interests

(63)

(45)

(18)

NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY

$           862

$       1,032

$         (170)

Notes

- Certain prior year data may have been reclassified to conform with current year presentation.

Southern Company

Kilowatt-Hour Sales and Customers

(In Millions of KWHs)

Three Months Ended March

Change

Weather
Adjusted
Change

Kilowatt-Hour Sales-

Total Sales

46,725

48,728

(4.1) %

Total Retail Sales-

33,382

35,155

(5.0) %

0.4 %

Residential

10,630

12,103

(12.2) %

1.2 %

Commercial

10,883

10,987

(0.9) %

1.8 %

Industrial

11,724

11,912

(1.6) %

(1.6) %

Other

145

153

(4.9) %

(4.0) %

Total Wholesale Sales

13,343

13,573

(1.7) %

N/A

(In Thousands of Customers)

Period Ended March

2023

2022

Change

Regulated Utility Customers-

Total Utility Customers-

8,824

8,755

0.8 %

Total Traditional Electric

4,449

4,397

1.2 %

Southern Company Gas

4,375

4,358

0.4 %

Southern Company

Financial Overview

As Reported

(In Millions of Dollars)

Three Months Ended March

2023

2022

% Change

Southern Company –

Operating Revenues

$        6,480

$        6,648

(2.5) %

Earnings Before Income Taxes

896

1,164

(23.0) %

Net Income Available to Common

862

1,032

(16.5) %

Alabama Power –

Operating Revenues

$        1,647

$        1,649

(0.1) %

Earnings Before Income Taxes

253

458

(44.8) %

Net Income Available to Common

255

347

(26.5) %

Georgia Power –

Operating Revenues

$        2,176

$        2,208

(1.4) %

Earnings Before Income Taxes

349

415

(15.9) %

Net Income Available to Common

296

385

(23.1) %

Mississippi Power –

Operating Revenues

$            390

$            335

16.4 %

Earnings Before Income Taxes

71

50

42.0 %

Net Income Available to Common

58

42

38.1 %

Southern Power –

Operating Revenues

$            508

$            539

(5.8) %

Earnings Before Income Taxes

32

15

113.3 %

Net Income Available to Common

102

72

41.7 %

Southern Company Gas –

Operating Revenues

$        1,875

$        2,058

(8.9) %

Earnings Before Income Taxes

412

416

(1.0) %

Net Income Available to Common

309

319

(3.1) %

Notes

- See Financial Highlights pages for discussion of certain significant items occurring during the periods.