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.