Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2021

Schedule of Assets and Liabilities Measured at Fair Value

At June 30, 2021, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:


	Fair Value Measurements Using:
At June 30, 2021	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Southern Company
Assets:
Energy-related derivatives(a)	$	656	$	436	$	28	$	—	$	1,120
Interest rate derivatives	—		17		—		—		17
Foreign currency derivatives	—		55		—		—		55
Investments in trusts:(b)(c)
Domestic equity	812		236		—		—		1,048
Foreign equity	171		191		—		—		362
U.S. Treasury and government agency securities	—		311		—		—		311
Municipal bonds	—		45		—		—		45
Pooled funds – fixed income	—		18		—		—		18
Corporate bonds	4		453		—		—		457
Mortgage and asset backed securities	—		92		—		—		92
Private equity	—		—		—		102		102

Other	29		23		—		—		52
Cash equivalents	1,039		13		—		—		1,052
Other investments	9		30		—		—		39
Total	$	2,720	$	1,920	$	28	$	102	$	4,770
Liabilities:
Energy-related derivatives(a)	$	664	$	333	$	10	$	—	$	1,007
Interest rate derivatives	—		9		—		—		9
Foreign currency derivatives	—		10		—		—		10
Contingent consideration	—		—		16		—		16
Total	$	664	$	352	$	26	$	—	$	1,042


	Fair Value Measurements Using:
At June 30, 2021	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Alabama Power
Assets:
Energy-related derivatives	$	—	$	46	$	—	$	—	$	46
Nuclear decommissioning trusts:(b)
Domestic equity	453		226		—		—		679
Foreign equity	171		—		—		—		171
U.S. Treasury and government agency securities	—		22		—		—		22
Municipal bonds	—		1		—		—		1
Corporate bonds	4		241		—		—		245
Mortgage and asset backed securities	—		24		—		—		24
Private equity	—		—		—		102		102
Other	6		—		—		—		6
Cash equivalents	507		13		—		—		520
Other investments	—		30		—		—		30
Total	$	1,141	$	603	$	—	$	102	$	1,846
Liabilities:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3



Georgia Power
Assets:
Energy-related derivatives	$	—	$	73	$	—	$	—	$	73

Nuclear decommissioning trusts:(b)(c)
Domestic equity	359		1		—		—		360
Foreign equity	—		188		—		—		188
U.S. Treasury and government agency securities	—		289		—		—		289
Municipal bonds	—		44		—		—		44
Corporate bonds	—		212		—		—		212
Mortgage and asset backed securities	—		68		—		—		68
Other	23		23		—		—		46

Total	$	382	$	898	$	—	$	—	$	1,280
Liabilities:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4


	Fair Value Measurements Using:
At June 30, 2021	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Mississippi Power
Assets:
Energy-related derivatives	$	—	$	44	$	—	$	—	$	44

Cash equivalents	455		—		—		—		455
Total	$	455	$	44	$	—	$	—	$	499
Liabilities:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3



Southern Power
Assets:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4
Foreign currency derivatives	—		55		—		—		55

Total	$	—	$	59	$	—	$	—	$	59
Liabilities:

Foreign currency derivatives	$	—	$	10	$	—	$	—	$	10
Contingent consideration	—		—		16		—		16
Total	$	—	$	10	$	16	$	—	$	26

Southern Company Gas
Assets:
Energy-related derivatives(a)	$	656	$	269	$	28	$	—	$	953
Interest rate derivatives	—		4		—		—		4
Non-qualified deferred compensation trusts:
Domestic equity	—		9		—		—		9
Foreign equity	—		3		—		—		3
Pooled funds – fixed income	—		18		—		—		18



Total	$	656	$	303	$	28	$	—	$	987
Liabilities:
Energy-related derivatives(a)	$	664	$	323	$	10	$	—	$	997

(a)Includes assets ($626 million, $260 million, and $28 million categorized as Level 1, 2, and 3, respectively) and liabilities ($657 million, $323 million, and $10 million categorized as Level 1, 2, and 3, respectively) related to Sequent, which were classified as held for sale at June 30, 2021. See Note (K) under "Southern Company Gas" and "Assets and Liabilities Held for Sale" for additional information. Excludes cash collateral of $41 million.

(b)Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

(c)Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. At June 30, 2021, approximately $48 million of the fair market value of Georgia Power's nuclear decommissioning trust funds' securities were on loan to creditors under the funds' managers' securities lending program. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

Schedule of Increase (Decrease) In Fair Value Of Funds

The fair value of the funds, including reinvested interest and dividends and excluding the funds' expenses, increased (decreased) by the amounts shown in the table below for the six months ended June 30, 2021 and 2020. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.


Fair value increases (decreases)	Three Months Ended June 30, 2021		Three Months Ended June 30, 2020		Six Months Ended June 30, 2021		Six Months Ended June 30, 2020
	(in millions)
Southern Company	$	125	$	223	$	164	$	(23)
Alabama Power	77		124		118		(42)
Georgia Power	48		99		46		19

Schedule of Financial Instruments for which Carrying Amount Did Not Equal Fair Value

At June 30, 2021, other financial instruments for which the carrying amount did not equal fair value were as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas(*)
	(in billions)
Long-term debt, including securities due within one year:
Carrying amount	$	50.4	$	9.3	$	13.5	$	1.9	$	4.0	$	6.3
Fair value	56.2		10.6		15.2		2.1		4.5		7.3

(*)The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the 2016 merger with Southern Company. Southern Company Gas amortizes the fair value adjustments over the remaining lives of the respective bonds, the latest being through 2043.

Schedule of Fair Value of Commodity Derivative Contracts that Include a Significant Unobservable Component

The following table includes transfers to Level 3, which represent the fair value of Southern Company Gas' commodity derivative contracts that include a significant unobservable component for the first time during the period.


	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021
	(in millions)
Beginning balance	$	28	$	28


Instruments realized or otherwise settled during period	(4)		(6)
Changes in fair value	(6)		(4)
Ending balance	$	18	$	18