Southern Company reports second-quarter 2024 earnings

Non-GAAP Financial Measures

Three Months Ended June

Year-to-Date June

Net Income – Excluding Items (in millions)

2024

2023

2024

2023

Net Income – As Reported

$                 1,203

$                    838

$                 2,332

$                 1,700

Less:

Estimated Loss on Plants Under Construction

17

(3)

14

(4)

Tax Impact

(18)

1

(17)

1

Loss on Extinguishment of Debt

—

—

—

(5)

Tax Impact

—

—

—

1

Estimated Loss on Qualifying Infrastructure Plant

—

(38)

—

(38)

Tax Impact

—

10

—

10

Net Income – Excluding Items

$                 1,204

$                    868

$                 2,335

$                 1,735

Average Shares Outstanding – (in millions)                     

1,096

1,092

1,095

1,092

Basic Earnings Per Share - Excluding Items

$                   1.10

$                   0.79

$                   2.13

$                   1.59

NOTE: For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package.

Southern Company

Financial Highlights

(In Millions Except Earnings Per Share)

Three Months Ended
June

Year-To-Date

June

Net Income – As Reported

2024

2023

2024

2023

Traditional Electric Operating Companies

$      1,192

$         823

$      2,012

$      1,433

Southern Power

86

85

182

187

Southern Company Gas

108

85

517

393

Total

1,386

993

2,711

2,013

Parent Company and Other

(183)

(155)

(379)

(313)

Net Income – As Reported

$      1,203

$         838

$      2,332

$      1,700

Basic Earnings Per Share⁽¹⁾

$        1.10

$        0.77

$        2.13

$        1.56

Average Shares Outstanding

1,096

1,092

1,095

1,092

Non-GAAP Financial Measures

Three Months Ended
June

Year-To-Date

June

Net Income – Excluding Items

2024

2023

2024

2023

Net Income – As Reported

$      1,203

$         838

$      2,332

$      1,700

Less:

Estimated Loss on Plants Under Construction⁽²⁾

17

(3)

14

(4)

Tax Impact

(18)

1

(17)

1

Loss on Extinguishment of Debt⁽³⁾

—

—

—

(5)

Tax Impact

—

—

—

1

Estimated Loss on Qualifying Infrastructure Plant⁽⁴⁾

—

(38)

—

(38)

Tax Impact

—

10

—

10

Net Income – Excluding Items

$      1,204

$         868

$      2,335

$      1,735

Basic Earnings Per Share – Excluding Items

$        1.10

$        0.79

$        2.13

$        1.59

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 $1.09 and $2.12 for the three and six months ended June 30, 2024, respectively, and $0.76 and $1.55 for the three and six months ended June 30, 2023, respectively.

(2)

Earnings for the three and six months ended June 30, 2024 include a pre-tax credit to income of $21 million ($16 million after tax) related to the estimated probable loss on Plant Vogtle Units 3 and 4 reflecting a revision to Georgia Power Company's total project capital cost forecast resulting from a reduction in remaining expected site demobilization costs and other contractor obligations. Additionally, earnings for the three and six months ended June 30, 2024 include a $14 million income tax charge related to the remeasuring of deferred tax assets associated with the previously recognized estimated probable loss on Plant Vogtle Units 3 and 4 due to a change in the State of Georgia corporate tax rate. Further charges and/or credits may occur; however, the amount and timing are uncertain. Earnings for the three and six months ended June 30, 2024 and 2023 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.

(3)

Earnings for the six months ended June 30, 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.

(4)

Earnings for the three and six months ended June 30, 2023 include a pre-tax charge of $38 million ($28 million after tax) for an estimated loss at Southern Company Gas associated with an Illinois Commerce Commission disallowance related to its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP Rider, or Investing in Illinois program. Further charges may occur; however, the amount and timing of any such charges are uncertain.

Southern Company

Significant Factors Impacting EPS

Three Months Ended

June

Year-To-Date

June

2024

2023

Change

2024

2023

Change

Earnings Per Share –

As Reported⁽¹⁾

$ 1.10

$ 0.77

$   0.33

$ 2.13

$ 1.56

$   0.57

  Significant Factors:

Traditional Electric Operating Companies

$   0.34

$   0.53

Southern Power

—

(0.01)

Southern Company Gas

0.02

0.11

Parent Company and Other

(0.03)

(0.05)

Increase in Shares

—

(0.01)

  Total – As Reported

$   0.33

$   0.57

Three Months Ended

June

Year-To-Date

June

Non-GAAP Financial Measures

2024

2023

Change

2024

2023

Change

Earnings Per Share –

Excluding Items

$ 1.10

$ 0.79

$   0.31

$ 2.13

$ 1.59

$   0.54

  Total – As Reported

$   0.33

$   0.57

Less:

Estimated Loss on Plants Under Construction⁽²⁾

—

—

Loss on Extinguishment of Debt⁽³⁾

—

—

Estimated Loss on Qualifying Infrastructure Plant⁽⁴⁾

0.02

0.03

  Total – Excluding Items

$   0.31

$   0.54

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 $1.09 and $2.12 for the three and six months ended June 30, 2024, respectively, and $0.76 and $1.55 for the three and six months ended June 30, 2023, respectively.

(2)

Earnings for the three and six months ended June 30, 2024 include a pre-tax credit to income of $21 million ($16 million after tax) related to the estimated probable loss on Plant Vogtle Units 3 and 4 reflecting a revision to Georgia Power Company's total project capital cost forecast resulting from a reduction in remaining expected site demobilization costs and other contractor obligations. Additionally, earnings for the three and six months ended June 30, 2024 include a $14 million income tax charge related to the remeasuring of deferred tax assets associated with the previously recognized estimated probable loss on Plant Vogtle Units 3 and 4 due to a change in the State of Georgia corporate tax rate. Further charges and/or credits may occur; however, the amount and timing are uncertain. Earnings for the three and six months ended June 30, 2024 and 2023 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.

(3)

Earnings for the six months ended June 30, 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.

(4)

Earnings for the three and six months ended June 30, 2023 include a pre-tax charge of $38 million ($28 million after tax) for an estimated loss at Southern Company Gas associated with an Illinois Commerce Commission disallowance related to its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP Rider, or Investing in Illinois program. Further charges may occur; however, the amount and timing of any such charges are uncertain.

Southern Company

EPS Earnings Analysis

Description

Three Months Ended

June

2024 vs. 2023

Year-To-Date

June

2024 vs. 2023

Retail Sales

1¢

5¢

Retail Revenue Impacts

24

41

Weather

14

20

Wholesale and Other Operating Revenues

4

7

Non-Fuel Operations and Maintenance Expenses⁽¹⁾

(2)

(2)

Depreciation and Amortization

(4)

(6)

Interest Expense and Other

—

(6)

Income Taxes

(3)

(6)

Total Traditional Electric Operating Companies

34¢

53¢

Southern Power

—

(1)

Southern Company Gas

—

9

Parent Company and Other

(3)

(6)

Increase in Shares

—

(1)

Total Change in EPS (Excluding Items)

31¢

54¢

Estimated Loss on Plants Under Construction⁽²⁾

—

—

Loss on Extinguishment of Debt⁽³⁾

—

—

Estimated Loss on Qualifying Infrastructure Plant⁽⁴⁾

2

3

Total Change in EPS (As Reported)

33¢

57¢

See Notes on the following page.

Southern Company
EPS Earnings Analysis

Notes

(1)

Excludes gains/losses on asset sales, which are included in "Interest Expense and Other." Includes non-service cost-related benefits income.

(2)

Earnings for the three and six months ended June 30, 2024 include a pre-tax credit to income of $21 million ($16 million after tax) related to the estimated probable loss on Plant Vogtle Units 3 and 4 reflecting a revision to Georgia Power Company's total project capital cost forecast resulting from a reduction in remaining expected site demobilization costs and other contractor obligations. Additionally, earnings for the three and six months ended June 30, 2024 include a $14 million income tax charge related to the remeasuring of deferred tax assets associated with the previously recognized estimated probable loss on Plant Vogtle Units 3 and 4 due to a change in the State of Georgia corporate tax rate. Further charges and/or credits may occur; however, the amount and timing are uncertain. Earnings for the three and six months ended June 30, 2024 and 2023 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.

(3)

Earnings for the six months ended June 30, 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.

(4)

Earnings for the three and six months ended June 30, 2023 include a pre-tax charge of $38 million ($28 million after tax) for an estimated loss at Southern Company Gas associated with an Illinois Commerce Commission disallowance related to its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP Rider, or Investing in Illinois program. Further charges may occur; however, the amount and timing of any such charges are uncertain.

Southern Company

Consolidated Earnings

As Reported

Three Months Ended June

Year-To-Date June

2024

2023

Change

2024

2023

Change

(in millions)

(in millions)

Retail electric revenues:

Fuel

$  1,061

$  1,006

$       55

$  2,072

$  2,056

$       16

Non-fuel

3,425

2,853

572

6,355

5,402

953

Wholesale electric revenues

627

605

22

1,198

1,203

(5)

Other electric revenues

210

209

1

409

399

10

Natural gas revenues

831

852

(21)

2,538

2,728

(190)

Other revenues

309

223

86

537

440

97

Total operating revenues

6,463

5,748

715

13,109

12,228

881

Fuel and purchased power

1,254

1,190

64

2,448

2,482

(34)

Cost of natural gas

149

199

(50)

754

1,097

(343)

Cost of other sales

167

128

39

298

255

43

Non-fuel operations and maintenance

1,409

1,489

(80)

2,881

2,929

(48)

Depreciation and amortization

1,182

1,112

70

2,327

2,222

105

Taxes other than income taxes

384

340

44

780

734

46

Estimated loss on Plant Vogtle Units 3 and 4

(21)

—

(21)

(21)

—

(21)

Total operating expenses

4,524

4,458

66

9,467

9,719

Operating income

1,939

1,290

649

3,642

2,509

1,133

Allowance for equity funds used during construction

51

70

(19)

109

135

(26)

Earnings from equity method investments

31

29

2

77

78

(1)

Interest expense, net of amounts capitalized

694

610

84

1,358

1,192

166

Other income (expense), net

151

142

9

302

286

16

Income taxes

290

98

192

513

194

319

Net income

1,188

823

365

2,259

1,622

637

Net loss attributable to noncontrolling interests

(15)

(15)

—

(73)

(78)

5

Net income attributable to Southern Company

$  1,203

$     838

$     365

$  2,332

$  1,700

$     632

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

Southern Company

Kilowatt-Hour Sales and Customers

Three Months Ended June

Year-To-Date June

2024

2023

% Change

Weather
Adjusted
% Change

2024

2023

% Change

Weather
Adjusted
% Change

(in millions)

(in millions)

Kilowatt-Hour Sales

Total Sales

49,897

48,003

3.9 %

96,426

94,729

1.8 %

Total Retail Sales

37,007

34,969

5.8 %

0.6 %

72,261

68,351

5.7 %

1.1 %

Residential

11,889

10,695

11.2 %

(1.0) %

23,765

21,326

11.4 %

0.1 %

Commercial

12,666

11,826

7.1 %

2.8 %

24,140

22,708

6.3 %

3.3 %

Industrial

12,318

12,317

— %

— %

24,086

24,040

0.2 %

0.2 %

Other

134

131

2.1 %

1.9 %

270

277

(2.4) %

(3.0) %

 Total Wholesale Sales

12,890

13,034

(1.1) %

N/A

24,165

26,378

(8.4) %

N/A

Period Ended June

2024

2023

% Change

(in thousands)

Regulated Utility Customers

Total Regulated Utility Customers

8,873

8,800

0.8 %

Traditional Electric Operating Companies

4,518

4,463

1.2 %

Southern Company Gas

4,355

4,337

0.4 %

Southern Company

Financial Overview

As Reported

Three Months Ended June

Year-To-Date June

2024

2023

% Change

2024

2023

% Change

(in millions)

(in millions)

Southern Company –

Operating Revenues

$  6,463

$  5,748

12.4 %

$  13,109

$  12,228

7.2 %

Earnings Before Income Taxes

1,478

921

60.5 %

2,772

1,816

52.6 %

Net Income Available to Common

1,203

838

43.6 %

2,332

1,700

37.2 %

Alabama Power –

Operating Revenues

$  1,873

$  1,689

10.9 %

$  3,664

$  3,336

9.8 %

Earnings Before Income Taxes

471

337

39.8 %

889

591

50.4 %

Net Income Available to Common

369

312

18.3 %

702

568

23.6 %

Georgia Power –

Operating Revenues

$  2,875

$  2,391

20.2 %

$  5,273

$  4,567

15.5 %

Earnings Before Income Taxes

954

563

69.4 %

1,470

911

61.4 %

Net Income Available to Common

762

471

61.8 %

1,199

767

56.3 %

Mississippi Power –

Operating Revenues

$     364

$     311

17.0 %

$     706

$     702

0.6 %

Earnings Before Income Taxes

76

44

72.7 %

136

115

18.3 %

Net Income Available to Common

61

40

52.5 %

111

98

13.3 %

Southern Power –

Operating Revenues

$     524

$     525

(0.2) %

$     997

$  1,033

(3.5) %

Earnings Before Income Taxes

84

76

10.5 %

108

108

— %

Net Income Available to Common

86

85

1.2 %

182

187

(2.7) %

Southern Company Gas –

Operating Revenues

$     831

$     852

(2.5) %

$  2,538

$  2,728

(7.0) %

Earnings Before Income Taxes

144

114

26.3 %

691

525

31.6 %

Net Income Available to Common

108

85

27.1 %

517

393

31.6 %

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