0000092122-17-000067.txt : 20170802 0000092122-17-000067.hdr.sgml : 20170802 20170802083754 ACCESSION NUMBER: 0000092122-17-000067 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20170802 ITEM INFORMATION: Results of Operations and Financial Condition FILED AS OF DATE: 20170802 DATE AS OF CHANGE: 20170802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN CO CENTRAL INDEX KEY: 0000092122 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 580690070 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03526 FILM NUMBER: 17998478 BUSINESS ADDRESS: STREET 1: 30 IVAN ALLEN JR. BLVD., N.W. CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4045065000 MAIL ADDRESS: STREET 1: 30 IVAN ALLEN JR. BLVD., N.W. CITY: ATLANTA STATE: GA ZIP: 30308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN POWER CO CENTRAL INDEX KEY: 0001160661 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 582598670 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37803 FILM NUMBER: 17998480 BUSINESS ADDRESS: STREET 1: 30 IVAN ALLEN JR. BLVD CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4045065000 MAIL ADDRESS: STREET 1: 30 IVAN ALLEN JR. BLVD CITY: ATLANTA STATE: GA ZIP: 30308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALABAMA POWER CO CENTRAL INDEX KEY: 0000003153 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 630004250 STATE OF INCORPORATION: AL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03164 FILM NUMBER: 17998484 BUSINESS ADDRESS: STREET 1: 600 N 18TH ST STREET 2: P O BOX 2641 CITY: BIRMINGHAM STATE: AL ZIP: 35291 BUSINESS PHONE: 2052571000 MAIL ADDRESS: STREET 1: 600 N 18TH ST CITY: BIRMINGHAM STATE: AL ZIP: 35291 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GULF POWER CO CENTRAL INDEX KEY: 0000044545 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 590276810 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31737 FILM NUMBER: 17998482 BUSINESS ADDRESS: STREET 1: ONE ENERGY PLACE CITY: PENSACOLA STATE: FL ZIP: 32520 BUSINESS PHONE: 8504446111 MAIL ADDRESS: STREET 1: ONE ENERGY PLACE CITY: PENSACOLA STATE: FL ZIP: 32520 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEORGIA POWER CO CENTRAL INDEX KEY: 0000041091 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 580257110 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06468 FILM NUMBER: 17998483 BUSINESS ADDRESS: STREET 1: 241 RALPH MCGILL BOULEVARD CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4045066526 MAIL ADDRESS: STREET 1: 241 RALPH MCGILL BOULEVARD CITY: ATLANTA STATE: GA ZIP: 30308 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN Co GAS CENTRAL INDEX KEY: 0001004155 STANDARD INDUSTRIAL CLASSIFICATION: NATURAL GAS DISTRIBUTION [4924] IRS NUMBER: 582210952 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14174 FILM NUMBER: 17998479 BUSINESS ADDRESS: STREET 1: 30 IVAN ALLEN JR. BLVD CITY: ATLANTA STATE: GA ZIP: 30308 BUSINESS PHONE: 4045065000 MAIL ADDRESS: STREET 1: 30 IVAN ALLEN JR. BLVD CITY: ATLANTA STATE: 2Q ZIP: 30308 FORMER COMPANY: FORMER CONFORMED NAME: AGL RESOURCES INC DATE OF NAME CHANGE: 19951129 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MISSISSIPPI POWER CO CENTRAL INDEX KEY: 0000066904 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 640205820 STATE OF INCORPORATION: MS FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11229 FILM NUMBER: 17998481 BUSINESS ADDRESS: STREET 1: 2992 WEST BEACH CITY: GULFPORT STATE: MS ZIP: 39501 BUSINESS PHONE: 2288641211 MAIL ADDRESS: STREET 1: 2992 WEST BEACH CITY: GULFPORT STATE: MS ZIP: 39501 8-K 1 earnrelease8-kq22017.htm 8-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
August 2, 2017

Commission
File Number
Registrant, State of Incorporation,
Address and Telephone Number
I.R.S. Employer
Identification No.
 
 
 
1-3526
The Southern Company
(A Delaware Corporation)
30 Ivan Allen Jr. Blvd., N.W.
Atlanta, Georgia 30308
(404) 506-5000
58-0690070
1-3164
Alabama Power Company
(An Alabama Corporation)
600 North 18th Street
Birmingham, Alabama 35203
(205) 257-1000
63-0004250
1-6468
Georgia Power Company
(A Georgia Corporation)
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308
(404) 506-6526
58-0257110
001-31737
Gulf Power Company
(A Florida Corporation)
One Energy Place
Pensacola, Florida 32520
(850) 444-6111
59-0276810
001-11229
Mississippi Power Company
(A Mississippi Corporation)
2992 West Beach Boulevard
Gulfport, Mississippi 39501
(228) 864-1211
64-0205820
001-37803
Southern Power Company
(A Delaware Corporation)
30 Ivan Allen Jr. Blvd., N.W.
Atlanta, Georgia 30308
(404) 506-5000
58-2598670
1-14174
Southern Company Gas
(A Georgia Corporation)
Ten Peachtree Place N.E.
Atlanta, Georgia 30309
(404) 584-4000
58-2210952

The names and addresses of the registrants have not changed since the last report.






This combined Form 8-K is furnished separately by seven registrants: The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Power Company and Southern Company Gas. Information contained herein relating to each registrant is furnished by each registrant solely on its own behalf. Each registrant makes no representation as to information relating to the other registrants.

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  o







Item 2.02
Results of Operations and Financial Condition

The information in this Current Report on Form 8-K, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibits attached hereto, shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

On August 2, 2017, The Southern Company (“Southern Company”) issued a press release regarding its earnings for the three-month and six-month periods ended June 30, 2017. A copy of this release is being furnished as Exhibit 99.01 to this Current Report on Form 8-K. In addition, certain additional information regarding the financial results for the three-month and six-month periods ended June 30, 2017 is being furnished as Exhibits 99.02 through 99.07 to this Current Report on Form 8-K.

Use of Non-GAAP Financial Measures

Exhibits 99.01, 99.02, 99.03 and 99.04 to this Current Report on Form 8-K, in addition to including earnings and earnings per share in accordance with generally accepted accounting principles (“GAAP”) for the three-month and six-month periods ended June 30, 2017 and 2016, also include earnings and earnings per share (1) for the three-month and six-month periods ended June 30, 2017 and 2016 excluding charges for estimated losses relating to Mississippi Power Company’s integrated coal gasification combined cycle construction project in Kemper County, Mississippi (the “Kemper IGCC”), (2) for the six-month period ended June 30, 2017 excluding charges for a write-down of Gulf Power Company’s ownership of Plant Scherer Unit 3, (3) for the three-month and six-month periods ended June 30, 2017 and 2016 excluding costs related to the acquisition and integration of Southern Company Gas, (4) for the three-month and six-month periods ended June 30, 2017 excluding earnings from the Wholesale Gas Services business of Southern Company Gas, and (5) for the three-month and six-month periods ended June 30, 2017 excluding earnings related to the equity return related to the Kemper IGCC schedule extension from November 30, 2016 through the project’s suspension in June 2017. The attached exhibits include additional information regarding these excluded items, as well as reconciliations of each non-GAAP financial measure to the most comparable financial measure under GAAP. Southern Company believes the presentation of earnings and earnings per share, excluding these items, is useful to investors because it provides investors with additional information to evaluate the performance of Southern Company’s ongoing business activities.  Southern Company management also uses earnings and earnings per share, excluding the effect of these items, to evaluate the performance of Southern Company’s ongoing business activities.  The presentation of this additional information is not meant to be considered a substitute for financial measures prepared in accordance with GAAP.

Exhibits

The exhibits hereto contain business segment information for Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Power Company and Southern Company Gas. Accordingly, this report is also being furnished on behalf of each such registrant.




- 1 -





The following exhibits relate to the three and six month periods ended June 30, 2017:



 
Exhibit 99.01
Press Release.
 
Exhibit 99.02
Financial Highlights.
 
Exhibit 99.03
Significant Factors Impacting EPS.
 
Exhibit 99.04
EPS Earnings Analysis.
 
Exhibit 99.05
Consolidated Earnings.
 
Exhibit 99.06
Kilowatt-Hour Sales and Customers.
 
Exhibit 99.07
Financial Overview.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:   August 2, 2017
THE SOUTHERN COMPANY




 
By
/s/Ann P. Daiss
 
 
Ann P. Daiss
Comptroller
 
 
 
 
ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
GULF POWER COMPANY
MISSISSIPPI POWER COMPANY
SOUTHERN POWER COMPANY
SOUTHERN COMPANY GAS




 
By
/s/Melissa K. Caen
 
 
Melissa K. Caen
Assistant Secretary






- 2 -



EX-99.01 2 ex9901-pressreleaseq22017.htm EXHIBIT 99.01 Exhibit


 
 
Exhibit 99.01
 
socologoa07.gif
News
 
Media Contact:
Southern Company Media Relations
 
 
404-506-5333 or 1-866-506-5333
 
 
www.southerncompany.com
 
 
 
 
Investor Relations Contact:
 
 
Aaron Abramovitz
 
 
404-506-0780
 
 
apabramo@southernco.com
 
 
August 2, 2017

Southern Company reports second-quarter 2017 results

ATLANTA - Southern Company today reported a second quarter 2017 loss of $1.38 billion, or $1.38 per share, compared with earnings of $623 million, or 67 cents per share, in the second quarter of 2016. For the six months ended June 30, 2017, Southern Company reported a loss of $723 million, or 73 cents per share, compared with earnings of $1.11 billion, or $1.20 per share, for the same period in 2016.

Excluding the items described in the “Net Income - Excluding Items” table below, Southern Company earned $728 million, or 73 cents per share, during the second quarter of 2017, compared with $704 million, or 75 cents per share, during the second quarter of 2016. For the six months ended June 30, 2017, excluding these items, Southern Company earned $1.38 billion, or $1.39 per share, compared with earnings of $1.24 billion, or $1.34 per share, for the same period in 2016.

Non-GAAP Financial Measures
Three Months Ended June
 
Year-to-Date June
Net Income - Excluding Items (in millions)
2017

2016

 
2017
2016

Net Income (Loss) - As Reported
$(1,381)

 $623

 
$(723)
 $1,112

Estimated Loss on Kemper IGCC
3,012

81

 
3,120
134

  Tax Impact
(896)

(31)

 
(937)
(51)

Loss on Plant Scherer Unit 3


 
33

  Tax Impact


 
(13)

Acquisition and Integration Costs
9

44

 
13
65

       Tax Impact
(4)

(13)

 
(5)
(20)

Wholesale Gas Services
28


 
(86)

       Tax Impact
(11)


 
35

Earnings Guidance Comparability Item:
 
 
 
 
 
Equity Return Related to Kemper IGCC
    Schedule Extension
(24)


 
(47)

       Tax Impact
(5)


 
(9)

Net Income - Excluding Items
$728

$704

 
$1,381
$1,240

       Average Shares Outstanding - (in millions)
998

934

 
996
925

Basic Earnings Per Share - Excluding Items
$0.73

$0.75

 
$1.39
$1.34

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







Earnings drivers year-over-year for the second quarter 2017 were positively influenced by Southern Company Gas, which was acquired on July 1, 2016 and retail revenue effects at Southern Company’s traditional electric operating companies. Earnings were negatively influenced by mild weather, increased interest expense and share issuances.

“Our premier state-regulated electric and gas operating companies performed well during the second quarter,” said Chairman, President and CEO Thomas A. Fanning. “This consistency in our core operations has been a hallmark of the Southern Company system and reflects our long-standing commitment to keep customers at the center of all we do as we continue to deliver safe, clean, reliable and affordable energy to the constituents we are privileged to serve.”

Second quarter 2017 operating revenues were $5.43 billion, compared with $4.46 billion for the second quarter of 2016, an increase of 21.8 percent. Southern Company Gas accounted for $716 million of the increase in operating revenues for the second quarter of 2017. For the six months ended June 30, 2017, operating revenues were $11.20 billion, compared with $8.45 billion, an increase of 32.6 percent. Southern Company Gas accounted for $2.28 billion of the increase in operating revenues for the six months ended June 30, 2017.

Southern Company’s second quarter earnings slides with supplemental financial information are available at http://investor.southerncompany.com.

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 on the site for 12 months.

About Southern Company

Southern Company (NYSE: SO) is America’s premier energy company, with 46,000 megawatts of generating capacity and 1,500 billion cubic feet of combined natural gas consumption and throughput volume serving 9 million customers through its subsidiaries. The company provides clean, safe, reliable and affordable energy through electric operating companies in four states, natural gas distribution companies in seven states, a competitive generation company serving wholesale customers across America and a nationally recognized provider of customized energy solutions, 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 carbon-free 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, recognized among the Top 50 Companies for Diversity by DiversityInc, listed by Black Enterprise magazine as one of the 40 Best Companies for Diversity and designated a Top Employer for Hispanics by Hispanic Network. The company has earned a 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 energy companies in Fortune's annual Worlds Most Admired Electric and Gas Utility rankings. Visit our website at www.southerncompany.com.


# # #


EX-99.02 3 ex9902-financialhighlights.htm EXHIBIT 99.02 Exhibit


Exhibit 99.02
 
Page 1
 
Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June
Year-to-Date
June
Net Income (Loss)–As Reported (See Notes)
 
2017
 
2016
2017
 
2016
 
 
 
 
 
 
 
 
  Traditional Electric Operating Companies
 
$
(1,442
)
 
$
599

$
(1,010
)
 
$
1,064

  Southern Power
 
82

 
89

151

 
139

Southern Company Gas1
 
49

 

288

 

  Total
 
(1,311
)
 
688

(571
)
 
1,203

  Parent Company and Other
 
(70
)
 
(65
)
(152
)
 
(91
)
  Net Income (Loss)–As Reported
 
$
(1,381
)
 
$
623

$
(723
)
 
$
1,112

 
 
 
 
 
 
 
 
  Basic Earnings (Loss) Per Share2
 
$
(1.38
)
 
$
0.67

$
(0.73
)
 
$
1.20

 
 
 
 
 
 
 
 
  Average Shares Outstanding (in millions)
 
998

 
934

996

 
925

  End of Period Shares Outstanding (in millions)
 
 
 
 
999

 
942

 
 
 
 
 
 
 
 
Non-GAAP Financial Measures
 
Three Months Ended
June
Year-to-Date
June
Net Income–Excluding Items (See Notes)
 
2017
 
2016
2017
 
2016
 
 
 
 
 
 
 
 
  Net Income (Loss)–As Reported
 
$
(1,381
)
 
$
623

$
(723
)
 
$
1,112

Estimated Loss on Kemper IGCC3
 
3,012

 
81

3,120

 
134

Tax Impact
 
(896
)
 
(31
)
(937
)
 
(51
)
Loss on Plant Scherer Unit 34
 

 

33

 

Tax Impact
 

 

(13
)
 

Acquisition and Integration Costs5
 
9

 
44

13

 
65

Tax Impact
 
(4
)
 
(13
)
(5
)
 
(20
)
Wholesale Gas Services6
 
28

 

(86
)
 

Tax Impact
 
(11
)
 

35

 

Earnings Guidance Comparability Item:
 
 
 
 
 
 
 
Equity Return Related to Kemper IGCC
   Schedule Extension7
 
(24
)
 

(47
)
 

Tax Impact
 
(5
)
 

(9
)
 

  Net Income–Excluding Items
 
$
728

 
$
704

$
1,381

 
$
1,240

 
 
 
 
 
 
 
 
  Basic Earnings Per Share–Excluding Items
 
$
0.73

 
$
0.75

$
1.39

 
$
1.34

 
 
 
 
 
 
 
 
- See Notes on the following page.
 
 
 






Exhibit 99.02
Page 2
Southern Company
Financial Highlights
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- In connection with the adoption in the fourth quarter 2016 of a new accounting standard for stock compensation, previously reported amounts for income tax expense were reduced by a total of $11.3 million and $15.8 million for the three and six months ended June 30, 2016, respectively.
 
 
 
 
 
 
 
 
 
- For comparative purposes, Net Income - Excluding Items and Basic Earnings Per Share - Excluding Items in prior year periods do not reflect any adjustments to exclude acquisition debt financing costs ($0.03 per share for the three and six months ended June 30, 2016) related to the acquisition of Southern Company Gas. This item was not contemplated in Southern Company's February 2016 guidance and was excluded in the previously reported periods through December 31, 2016.
 
 
 
 
 
 
 
 
 
(1) On July 1, 2016, Southern Company completed the acquisition of Southern Company Gas.
 
 
 
 
 
 
 
 
 
(2) For the three and six months ended June 30, 2017 and 2016, dilution does not change basic earnings per share by more than 1 cent and is not material.
 
(3) Earnings for the three and six months ended June 30, 2017 and 2016 include the estimated losses relating to Mississippi Power Company's integrated coal gasification combined cycle facility construction project in Kemper County, Mississippi (Kemper IGCC) which significantly impacted the presentation of earnings and earnings per share. Further charges of uncertain amounts may occur in future periods in connection with the resolution of the Mississippi Public Service Commission's Kemper Settlement Docket.
 
 
 
 
 
 
 
 
 
(4) Earnings for the six months ended June 30, 2017 include a $32.5 million write-down ($20 million after tax) of Gulf Power Company's ownership of Plant Scherer Unit 3 as a result of the retail rate case settlement approved by the Florida Public Service Commission on April 4, 2017. Further charges are not expected to occur.
 
 
 
 
 
 
 
 
 
(5) Earnings for the three and six months ended June 30, 2017 and 2016 include costs related to the acquisition and integration of Southern Company Gas. Further costs are expected to continue to occur in connection with the related integration activities; however, the amount and duration of such expenditures is uncertain.
 
 
 
 
 
 
 
 
 
(6) Earnings for the three and six months ended June 30, 2017 include the Wholesale Gas Services business of Southern Company Gas. Presenting earnings and earnings per share excluding Wholesale Gas Services provides investors with an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.
 
 
 
 
 
 
 
 
 
(7) Earnings for the three and six months ended June 30, 2017 include additional allowance for funds used during construction (AFUDC) equity as a result of extending the schedule for the Kemper IGCC construction project. AFUDC equity ceased as of the project's suspension in June 2017. Southern Company's 2017 earnings guidance, initially presented in October 2016 assumed construction would be complete and AFUDC equity would cease by November 30, 2016. As a result, Southern Company believes presentation of earnings per share excluding these amounts provides investors with information comparable to the 2017 guidance. Management also uses such measures to evaluate Southern Company's performance in 2017.



EX-99.03 4 ex9903-significantfactorsi.htm EXHIBIT 99.03 Exhibit

Exhibit 99.03
 
Page 1
 
Southern Company
Significant Factors Impacting EPS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June
 
Year-to-Date
June
 
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Earnings (Loss) Per Share–
 
 
 
 
 
 
 
 
 
 
 
 
As Reported1 (See Notes)
 
$
(1.38
)
 
$
0.67

 
$
(2.05
)
 
$
(0.73
)
 
$
1.20

 
$
(1.93
)
 
 
 
 
 
 
 
 
 
 
 
 
 
  Significant Factors:
 
 
 
 
 
 
 
 
 
 
 
 
  Traditional Electric Operating Companies
 
 
 
 
 
$
(2.18
)
 
 
 
 
 
$
(2.24
)
Southern Power
 
 
 
 
 
(0.01
)
 
 
 
 
 
0.01

Southern Company Gas2
 
 
 
 
 
0.05

 
 
 
 
 
0.31

Parent Company and Other
 
 
 
 
 

 
 
 
 
 
(0.07
)
Increase in Shares3
 
 
 
 
 
0.09

 
 
 
 
 
0.06

  Total–As Reported
 
 
 
 
 
$
(2.05
)
 
 
 
 
 
$
(1.93
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
June
 
Year-to-Date
June
Non-GAAP Financial Measures
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Earnings Per Share–
 
 
 
 
 
 
 
 
 
 
 
 
Excluding Items (See Notes)
 
$
0.73

 
$
0.75

 
$
(0.02
)
 
$
1.39

 
$
1.34

 
$
0.05

 
 
 
 
 
 
 
 
 
 
 
 
 
  Total–As Reported
 
 
 
 
 
$
(2.05
)
 
 
 
 
 
$
(1.93
)
Kemper IGCC Impacts4
 
 
 
 
 
2.04

 
 
 
 
 
2.05

Loss on Plant Scherer Unit 35
 
 
 
 
 

 
 
 
 
 
0.02

Acquisition and Integration Costs6
 
 
 
 
 
(0.03
)
 
 
 
 
 
(0.04
)
Wholesale Gas Services7
 
 
 
 
 
0.02

 
 
 
 
 
(0.05
)
  Total–Excluding Items
 
 
 
 
 
$
(0.02
)
 
 
 
 
 
$
0.05

 
 
 
 
 
 
 
 
 
 
 
 
 
- See Notes on the following page.
 
 
 
 
 
 
 
 
 
 
 
 




Exhibit 99.03
Page 2
Southern Company
Significant Factors Impacting EPS
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- In connection with the adoption in the fourth quarter 2016 of a new accounting standard for stock compensation, previously reported amounts for income tax expense were reduced by a total of $11.3 million and $15.8 million for the three and six months ended June 30, 2016, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
- For comparative purposes, Basic Earnings Per Share - Excluding Items in prior year periods does not reflect any adjustments to exclude acquisition debt financing costs ($0.03 per share for the three and six months ended June 30, 2016) related to the acquisition of Southern Company Gas. This item was not contemplated in Southern Company's February 2016 guidance and was excluded in the previously reported periods through December 31, 2016.
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) For the three and six months ended June 30, 2017 and 2016, dilution does not change basic earnings per share by more than 1 cent and is not material.
 
 
 
 
 
 
 
 
 
 
 
 
 
(2) On July 1, 2016, Southern Company completed the acquisition of Southern Company Gas.
 
 
 
 
 
 
 
 
 
 
 
 
 
(3) Per share changes for each of the business segments reported in this table are calculated based on average shares outstanding as of June 30, 2016. The per share change attributable to Increase in Shares reflects the impact of the increase in average shares outstanding from June 30, 2016 through June 30, 2017. Because Southern Company reported a net loss for the three and six month periods ended June 30, 2017, the dilutive impact of the increase of average shares outstanding for these periods served to reduce the net loss per share.
 
 
 
 
 
 
 
 
 
 
 
 
 
(4) Earnings for the three and six months ended June 30, 2017 and 2016 include the estimated losses relating to Mississippi Power Company's integrated coal gasification combined cycle facility construction project in Kemper County, Mississippi (Kemper IGCC) which significantly impacted the presentation of earnings and earnings per share. Further charges of uncertain amounts may occur in future periods in connection with the resolution of the Mississippi Public Service Commission's Kemper Settlement Docket.

Earnings for the three and six months ended June 30, 2017 also include additional allowance for funds used during construction (AFUDC) equity as a result of extending the schedule for the Kemper IGCC construction project. AFUDC equity ceased as of the project's suspension in June 2017. Southern Company's 2017 earnings guidance, initially presented in October 2016 assumed construction would be complete and AFUDC equity would cease by November 30, 2016. As a result, Southern Company believes presentation of earnings per share excluding these amounts provides investors with information comparable to the 2017 guidance. Management also uses such measures to evaluate Southern Company's performance in 2017.
 
 
 
 
 
 
 
 
 
 
 
 
 
(5) Earnings for the six months ended June 30, 2017 include a $32.5 million write-down ($20 million after tax) of Gulf Power Company's ownership of Plant Scherer Unit 3 as a result of the retail rate case settlement approved by the Florida Public Service Commission on April 4, 2017. Further charges are not expected to occur.
 
 
 
 
 
 
 
 
 
 
 
 
 
(6) Earnings for the three and six months ended June 30, 2017 and 2016 include costs related to the acquisition and integration of Southern Company Gas. Further costs are expected to continue to occur in connection with the related integration activities; however, the amount and duration of such expenditures is uncertain.
 
 
 
 
 
 
 
 
 
 
 
 
 
(7) Earnings for the three and six months ended June 30, 2017 include the Wholesale Gas Services business of Southern Company Gas. Presenting earnings and earnings per share excluding Wholesale Gas Services provides investors with an additional measure of operating performance that excludes volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.


EX-99.04 5 ex9904-epsearningsanalysis.htm EXHIBIT 99.04 Exhibit


Exhibit 99.04
Page 1
Southern Company
EPS Earnings Analysis
Three Months Ended June 2017 vs. June 2016
 
 
Dollars
Description
 
 
$(0.01)
Retail Sales
 
 
0.05
Retail Revenue Impacts
 
 
(0.03)
Weather
 
 
(0.01)
Wholesale Operations
 
 
0.01
Non-Fuel O&M
 
 
(0.01)
Other Income and Deductions
 
 
(0.01)
Interest Expense
 
 
0.01
Income Taxes
 
 
$—
Total Traditional Electric Operating Companies
 
 
(0.01)
Southern Power
 
 
0.07
Southern Company Gas1
 
 
(0.03)
Parent and Other
 
 
(0.05)
Increase in Shares
 
 
$(0.02)
Total Change in EPS (Excluding Items)
 
 
(2.04)
Kemper IGCC Impacts2
 
 
0.03
Acquisition and Integration Costs3
 
 
(0.02)
Wholesale Gas Services4
 
 
$(2.05)
Total Change in EPS (As Reported)
 
 
- See Notes on the following page.
 






Exhibit 99.04
Page 2
Southern Company
EPS Earnings Analysis
Three Months Ended June 2017 vs. June 2016
Notes
 
- In connection with the adoption in the fourth quarter 2016 of a new accounting standard for stock compensation, previously reported amounts for income tax expense were reduced by a total of $11.3 million for the three months ended June 30, 2016.
 
- For comparative purposes, Basic Earnings Per Share - Excluding Items in the prior year period does not reflect any adjustments to exclude acquisition debt financing costs ($0.03 per share for the three months ended June 30, 2016) related to the acquisition of Southern Company Gas. This item was not contemplated in Southern Company's February 2016 guidance and was excluded in the previously reported periods through December 31, 2016.
 
(1) On July 1, 2016, Southern Company completed the acquisition of Southern Company Gas.
 
(2) Earnings for the three months ended June 30, 2017 and 2016 include the estimated losses relating to Mississippi Power Company's integrated coal gasification combined cycle facility construction project in Kemper County, Mississippi (Kemper IGCC) which significantly impacted the presentation of earnings and earnings per share. Further charges of uncertain amounts may occur in future periods in connection with the resolution of the Mississippi Public Service Commission's Kemper Settlement Docket.

Earnings for the three months ended June 30, 2017 also include additional allowance for funds used during construction (AFUDC) equity as a result of extending the schedule for the Kemper IGCC construction project. AFUDC equity ceased as of the project's suspension in June 2017. Southern Company's 2017 earnings guidance, initially presented in October 2016 assumed construction would be complete and AFUDC equity would cease by November 30, 2016. As a result, Southern Company believes presentation of earnings per share excluding these amounts provides investors with information comparable to the 2017 guidance. Management also uses such measures to evaluate Southern Company's performance in 2017.
 
(3) Earnings for the three months ended June 30, 2017 and 2016 include costs related to the acquisition and integration of Southern Company Gas. Further costs are expected to continue to occur in connection with the related integration activities; however, the amount and duration of such expenditures is uncertain.
 
 
(4) Earnings for the three months ended June 30, 2017 include the Wholesale Gas Services business of Southern Company Gas in future periods. Presenting earnings and earnings per share excluding Wholesale Gas Services provides investors with an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments.



EX-99.05 6 ex9905-consolidatedearning.htm EXHIBIT 99.05 Exhibit


Exhibit 99.05
 
Southern Company
Consolidated Earnings As Reported
(In Millions of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June
 
Year-to-Date June
 
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Income Account-
 
 
 
 
 
 
 
 
 
 
 
 
Retail Electric Revenues-
 
 
 
 
 
 
 
 
 
 
 
 
Fuel
 
$
1,016

 
$
998

 
$
18

 
$
1,944

 
$
1,873

 
$
71

Non-Fuel
 
2,761

 
2,750

 
11

 
5,227

 
5,251

 
(24
)
Wholesale Electric Revenues
 
618

 
446

 
172

 
1,149

 
842

 
307

Other Electric Revenues
 
167

 
166

 
1

 
342

 
348

 
(6
)
Natural Gas Revenues
 
684

 

 
684

 
2,214

 

 
2,214

Other Revenues
 
184

 
99

 
85

 
326

 
137

 
189

Total Revenues
 
5,430

 
4,459

 
971

 
11,202

 
8,451

 
2,751

Fuel and Purchased Power
 
1,303

 
1,212

 
91

 
2,478

 
2,288

 
190

Cost of Natural Gas
 
232

 

 
232

 
951

 

 
951

Cost of Other Sales
 
114

 
58

 
56

 
203

 
77

 
126

Non-Fuel O & M
 
1,301

 
1,099

 
202

 
2,631

 
2,206

 
425

Depreciation and Amortization
 
754

 
569

 
185

 
1,469

 
1,110

 
359

Taxes Other Than Income Taxes
 
308

 
255

 
53

 
638

 
511

 
127

Estimated Loss on Kemper IGCC
 
3,012

 
81

 
2,931

 
3,120

 
134

 
2,986

Total Operating Expenses
 
7,024

 
3,274

 
3,750

 
11,490

 
6,326

 
5,164

Operating Income
 
(1,594
)
 
1,185

 
(2,779
)
 
(288
)
 
2,125

 
(2,413
)
Allowance for Equity Funds Used During Construction
 
58

 
45

 
13

 
115

 
98

 
17

Earnings from Equity Method Investments
 
28

 
(1
)
 
29

 
67

 
(1
)
 
68

Interest Expense, Net of Amounts Capitalized
 
424

 
293

 
131

 
840

 
539

 
301

Other Income (Expense), net
 
(3
)
 
(28
)
 
25

 
(11
)
 
(56
)
 
45

Income Taxes
 
(587
)
 
261

 
(848
)
 
(273
)
 
479

 
(752
)
Net Income (Loss)
 
(1,348
)
 
647

 
(1,995
)
 
(684
)
 
1,148

 
(1,832
)
Less:
 
 
 
 
 
 
 
 
 
 
 
 
Dividends on Preferred and Preference Stock of Subsidiaries
 
11

 
12

 
(1
)
 
22

 
23

 
(1
)
Net Income (Loss) Attributable to Noncontrolling Interests
 
22

 
12

 
10

 
17

 
13

 
4

NET INCOME (LOSS) ATTRIBUTABLE TO SOUTHERN COMPANY
 
$
(1,381
)
 
$
623

 
$
(2,004
)
 
$
(723
)
 
$
1,112

 
$
(1,835
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- Certain prior year data may have been reclassified to conform with current year presentation.
 
 
 
 
 
 
 
 
 
 
 
 
 
- In connection with the adoption in the fourth quarter 2016 of a new accounting standard for stock compensation, previously reported amounts for income tax expense were reduced by a total of $11.3 million and $15.8 million for the three and six months ended June 30, 2016, respectively.
 


EX-99.06 7 ex9906-kilowattxhoursalesa.htm EXHIBIT 99.06 Exhibit


Exhibit 99.06
 
Southern Company
Kilowatt-Hour Sales and Customers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Millions of KWHs)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June
 
Year-to-Date June
 
 
2017
 
2016
 
Change
 
Weather Adjusted Change
 
2017
 
2016
 
Change
 
Weather Adjusted Change
Kilowatt-Hour Sales-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Sales
 
50,665

 
47,572

 
6.5
 %
 
 
 
96,358

 
93,048

 
3.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Retail Sales-
 
38,849

 
39,426

 
(1.5
)%
 
(0.4
)%
 
74,353

 
77,465

 
(4.0
)%
 
(0.8
)%
Residential
 
12,087

 
12,443

 
(2.9
)%
 
(0.4
)%
 
23,003

 
25,045

 
(8.2
)%
 
0.2
 %
Commercial
 
13,271

 
13,381

 
(0.8
)%
 
 %
 
25,038

 
25,704

 
(2.6
)%
 
(0.9
)%
Industrial
 
13,280

 
13,382

 
(0.8
)%
 
(0.8
)%
 
25,886

 
26,270

 
(1.5
)%
 
(1.5
)%
Other
 
211

 
220

 
(4.2
)%
 
(4.0
)%
 
426

 
446

 
(4.6
)%
 
(4.4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Wholesale Sales
 
11,816

 
8,146

 
45.1
 %
 
N/A

 
22,005

 
15,583

 
41.2
 %
 
N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(In Thousands of Customers)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Period Ended June
 
 
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


 
2017
 
20161
 
Change
 
 
Regulated Utility Customers-
 
 
 
 
 
 
 
 
 
 
 
 
Total Utility Customers-
 
 
 
 
 
9,194

 
9,119

 
0.8
 %
 
 
Total Traditional Electric
 
 
 
 
 
4,621

 
4,575

 
1.0
 %
 
 
Southern Company Gas
 
 
 
 
 
4,573

 
4,544

 
0.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Southern Company's acquisition of Southern Company Gas was completed on July 1, 2016. June 2016 customers are shown on a pro forma basis for comparative purposes.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


EX-99.07 8 ex9907-financialoverviewq2.htm EXHIBIT 99.07 Exhibit





Exhibit 99.07
 
Southern Company
Financial Overview As Reported
(In Millions of Dollars)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June
 
Year-to-Date June
 
 
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Southern Company –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
5,430

 
$
4,459

 
21.8
 %
 
$
11,202

 
$
8,451

 
32.6
 %
Earnings (Loss) Before Income Taxes
 
(1,935
)
 
908

 
N/M

 
(957
)
 
1,627

 
N/M

Net Income (Loss) Available to Common
 
(1,381
)
 
623

 
N/M

 
(723
)
 
1,112

 
N/M

 
 
 
 
 
 
 
 
 
 
 
 
 
Alabama Power –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
1,484

 
$
1,444

 
2.8
 %
 
$
2,866

 
$
2,776

 
3.2
 %
Earnings Before Income Taxes
 
386

 
358

 
7.8
 %
 
689

 
621

 
11.0
 %
Net Income Available to Common
 
230

 
213

 
8.0
 %
 
403

 
370

 
8.9
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Georgia Power –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
2,048

 
$
2,051

 
(0.1
)%
 
$
3,880

 
$
3,923

 
(1.1
)%
Earnings Before Income Taxes
 
551

 
565

 
(2.5
)%
 
971

 
998

 
(2.7
)%
Net Income Available to Common
 
347

 
349

 
(0.6
)%
 
607

 
618

 
(1.8
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Gulf Power –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
357

 
$
365

 
(2.2
)%
 
$
707

 
$
700

 
1.0
 %
Earnings Before Income Taxes
 
61

 
61

 
 %
 
95

 
112

 
(15.2
)%
Net Income Available to Common
 
35

 
34

 
2.9
 %
 
53

 
63

 
(15.9
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
Mississippi Power –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
303

 
$
277

 
9.4
 %
 
$
575

 
$
533

 
7.9
 %
Earnings (Loss) Before Income Taxes
 
(2,934
)
 
(14
)
 
N/M

 
(2,981
)
 
(13
)
 
N/M

Net Income (Loss) Available to Common
 
(2,054
)
 
2

 
N/M

 
(2,074
)
 
13

 
N/M

 
 
 
 
 
 
 
 
 
 
 
 
 
Southern Power –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
529

 
$
373

 
41.8
 %
 
$
979

 
$
688

 
42.3
 %
Earnings Before Income Taxes
 
66

 
60

 
10.0
 %
 
78

 
87

 
(10.3
)%
Net Income Available to Common
 
82

 
89

 
(7.9
)%
 
151

 
139

 
8.6
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
Southern Company Gas1 –
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues
 
$
716

 
$

 
N/A

 
$
2,276

 
$

 
N/A

Earnings Before Income Taxes
 
80

 

 
N/A

 
468

 

 
N/A

Net Income Available to Common
 
49

 

 
N/A

 
288

 

 
N/A

 
 
 
 
 
 
 
 
 
 
 
 
 
N/M - not meaningful
 
 
 
 
 
 
 
 
 
 
 
 
N/A - not applicable
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- In connection with the adoption in the fourth quarter 2016 of a new accounting standard for stock compensation, previously reported amounts for income tax expense were reduced by a total of $11.3 million and $15.8 million for the three and six months ended June 30, 2016, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) On July 1, 2016, Southern Company completed the acquisition of Southern Company Gas.
 


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