Merger, Acquisitions, and Dispositions

12 Months Ended

Dec. 31, 2017

Business Acquisition [Line Items]

MERGER, ACQUISITION, AND DISPOSITIONS

ACQUISITIONS AND DISPOSITIONS

Southern Company

Merger with Southern Company Gas

Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas through the natural gas distribution utilities. On July 1, 2016, Southern Company completed the Merger for a total purchase price of approximately $8.0 billion and Southern Company Gas became a wholly-owned, direct subsidiary of Southern Company.

The Merger was accounted for using the acquisition method of accounting with the assets acquired and liabilities assumed recognized at fair value as of the acquisition date. The following table presents the final purchase price allocation:

Southern Company Gas Purchase Price
	(in millions)
Current assets	$	1,557
Property, plant, and equipment	10,108
Goodwill	5,967
Intangible assets	400
Regulatory assets	1,118
Other assets	229
Current liabilities	(2,201		)
Other liabilities	(4,742		)
Long-term debt	(4,261		)
Noncontrolling interest	(174		)
Total purchase price	$	8,001

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed of $6.0 billion is recognized as goodwill, which is primarily attributable to positioning the Southern Company system to provide natural gas infrastructure to meet customers' growing energy needs and to compete for growth across the energy value chain. Southern Company anticipates that much of the value assigned to goodwill will not be deductible for tax purposes.

The valuation of identifiable intangible assets included customer relationships, trade names, and storage and transportation contracts with estimated lives of one to 28 years. The estimated fair value measurements of identifiable intangible assets were primarily based on significant unobservable inputs (Level 3).

The results of operations for Southern Company Gas have been included in Southern Company's consolidated financial statements from the date of acquisition and consist of operating revenues of $3.9 billion and $1.7 billion and net income of $243 million and $114 million for 2017 and 2016, respectively.

The following summarized unaudited pro forma consolidated statement of earnings information assumes that the acquisition of Southern Company Gas was completed on January 1, 2015. The summarized unaudited pro forma consolidated statement of earnings information includes adjustments for (i) intercompany sales, (ii) amortization of intangible assets, (iii) adjustments to interest expense to reflect current interest rates on Southern Company Gas debt and additional interest expense associated with borrowings by Southern Company to fund the Merger, and (iv) the elimination of nonrecurring expenses associated with the Merger.

	2016		2015
Operating revenues (in millions)	$	21,791	$	21,430
Net income attributable to Southern Company (in millions)	$	2,591	$	2,665
Basic EPS	$	2.70	$	2.85
Diluted EPS	$	2.68	$	2.84

These unaudited pro forma results are for comparative purposes only and may not be indicative of the results that would have occurred had this acquisition been completed on January 1, 2015 or the results that would be attained in the future.

Acquisition of PowerSecure

In May 2016, Southern Company acquired all of the outstanding stock of PowerSecure, a provider of products and services in the areas of distributed generation, energy efficiency, and utility infrastructure, for $18.75 per common share in cash, resulting in an aggregate purchase price of $429 million. As a result, PowerSecure became a wholly-owned subsidiary of Southern Company.

The acquisition of PowerSecure was accounted for using the acquisition method of accounting with the assets acquired and liabilities assumed recognized at fair value as of the acquisition date. The following table presents the final purchase price allocation:

PowerSecure Purchase Price
	(in millions)
Current assets	$	172
Property, plant, and equipment	46
Intangible assets	106
Goodwill	284
Other assets	4
Current liabilities	(121		)
Long-term debt, including current portion	(48		)
Deferred credits and other liabilities	(14		)
Total purchase price	$	429

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed of $284 million was recognized as goodwill, which is primarily attributable to expected business expansion opportunities for PowerSecure. Southern Company anticipates that the majority of the value assigned to goodwill will not be deductible for tax purposes.

The valuation of identifiable intangible assets included customer relationships, trade names, patents, backlog, and software with estimated lives of one to 26 years. The estimated fair value measurements of identifiable intangible assets were primarily based on significant unobservable inputs (Level 3).

The results of operations for PowerSecure have been included in Southern Company's consolidated financial statements from the date of acquisition and are immaterial to the consolidated financial results of Southern Company. Pro forma results of operations have not been presented for the acquisition because the effects of the acquisition were immaterial to Southern Company's consolidated financial results for all periods presented.

Southern Power

During 2017 and 2016, in accordance with its overall growth strategy, Southern Power or one of its wholly-owned subsidiaries, acquired or contracted to acquire the projects discussed below. Also, in March 2016, Southern Power acquired an additional 15% interest in Desert Stateline, 51% of which was initially acquired in 2015. As a result, Southern Power and the class B member are now entitled to 66% and 34%, respectively, of all cash distributions from Desert Stateline. In addition, Southern Power will continue to be entitled to substantially all of the federal tax benefits with respect to the transaction. Acquisition-related costs were expensed as incurred and were not material for any of the years presented.

The following table presents Southern Power's acquisition activity for the year ended, and subsequent to, December 31, 2017.

Project Facility	Resource	Seller; Acquisition Date	Approximate Nameplate Capacity (MW)	Location	Southern Power Percentage Ownership			Actual/Expected COD	PPA Contract Period
Business Acquisitions During the Year Ended December 31, 2017
Bethel	Wind	Invenergy Wind Global LLC, January 6, 2017	276	Castro County, TX	100	%		January 2017	12 years
Cactus Flats(a)	Wind	RES America Developments, Inc. July 31, 2017	148	Concho County, TX	100	%		Third quarter 2018	12 years and 15 years
Business Acquisitions Subsequent to December 31, 2017
Gaskell West 1	Solar	Recurrent Energy Development Holdings, LLC, January 26, 2018	20	Kern County, CA	100% of Class B		(b)	March 2018	20 years

(a) On July 31, 2017, Southern Power purchased 100% of the Cactus Flats facility and commenced construction. Upon placing the facility in service, Southern Power expects to close on a tax equity partnership agreement that has already been executed, subject to various customary conditions at closing, and will then own 100% of the class B membership interests.

(b) Southern Power owns 100% of the class B membership interest under a tax equity partnership agreement.

Business Acquisitions During the Year Ended December 31, 2017

Southern Power's aggregate purchase price for acquisitions during the year ended December 31, 2017 was $539 million. The fair values of the assets acquired and liabilities assumed were finalized in 2017 and recorded as follows:

	2017
	(in millions)
Restricted cash	$	16
CWIP	534
Other assets	5
Accounts payable	(16		)
Total purchase price	$	539

In 2017, total revenues of $15 million and net income of $17 million, primarily as a result of PTCs, was recognized by Southern Power related to the 2017 acquisitions. The Bethel facility did not have operating revenues or activities prior to completion of construction and being placed in service, and the Cactus Flats facility is still under construction. Therefore, supplemental pro forma information as though the acquisitions occurred as of the beginning of 2017 and for the comparable 2016 period is not meaningful and has been omitted.

Construction Projects in Progress

During the year ended December 31, 2017, in accordance with its overall growth strategy, Southern Power continued construction on the 345-MW Mankato expansion project and commenced construction on the Cactus Flats facility. Total aggregate construction costs for these facilities, excluding acquisition costs and including construction costs to complete the subsequently-acquired Gaskell West 1 solar project, are expected to be between $385 million and $430 million. At December 31, 2017, construction costs included in CWIP related to these projects totaled $188 million. The ultimate outcome of these matters cannot be determined at this time.

Development Projects

During 2017, as part of Southern Power's renewable development strategy, Southern Power purchased wind turbine equipment from Siemens Wind Power, Inc. and Vestas-American Wind Technology, Inc. to be used for various development and construction projects, up to 900 MWs in total. Once these wind projects reach commercial operations, which is expected in 2021, they are expected to qualify for 80% PTCs.

During 2016, Southern Power entered into a joint development agreement with Renewable Energy Systems Americas, Inc. to develop and construct approximately 3,000 MWs of wind projects expected to be placed in service between 2018 and 2020. In addition, in 2016, Southern Power purchased wind turbine equipment from Siemens Wind Power, Inc. and Vestas-American Wind Technology, Inc. to be used for construction of the facilities. Once these wind projects reach commercial operations, they are expected to qualify for 100% PTCs.

The ultimate outcome of these matters cannot be determined at this time.

The following table presents Southern Power's acquisitions for the year ended December 31, 2016.

Project Facility	Resource	Seller, Acquisition Date	Approximate Nameplate Capacity (MW)	Location	Ownership Percentage			Actual COD	PPA Contract Period
Acquisitions for the Year Ended December 31, 2016
Boulder 1	Solar	SunPower November 16, 2016	100	Clark County, NV	51	%	(a)	December 2016	20 years
Calipatria	Solar	Solar Frontier Americas Holding LLC February 11, 2016	20	Imperial County, CA	100	%	(b)	February 2016	20 years
East Pecos	Solar	First Solar, Inc. March 4, 2016	120	Pecos County, TX	100	%		March 2017	15 years
Grant Plains	Wind	Apex Clean Energy Holdings, LLC August 26, 2016	147	Grant County, OK	100	%		December 2016	20 years and 12 years (c)
Grant Wind	Wind	Apex Clean Energy Holdings, LLC April 7, 2016	151	Grant County, OK	100	%		April 2016	20 years
Henrietta	Solar	SunPower July 1, 2016	102	Kings County, CA	51	%	(a)	July 2016	20 years
Lamesa	Solar	RES America Developments Inc. July 1, 2016	102	Dawson County, TX	100	%		April 2017	15 years
Mankato (d)	Natural Gas	Calpine Corporation October 26, 2016	375	Mankato, MN	100	%		N/A (e)	10 years
Passadumkeag	Wind	Quantum Utility Generation, LLC June 30, 2016	42	Penobscot County, ME	100	%		July 2016	15 years
Rutherford	Solar	Cypress Creek Renewables, LLC July 1, 2016	74	Rutherford County, NC	100	%	(b)	December 2016	15 years
Salt Fork	Wind	EDF Renewable Energy, Inc. December 1, 2016	174	Donley and Gray Counties, TX	100	%		December 2016	14 years and 12 years
Tyler Bluff	Wind	EDF Renewable Energy, Inc. December 21, 2016	125	Cooke County, TX	100	%		December 2016	12 years
Wake Wind	Wind	Invenergy October 26, 2016	257	Floyd and Crosby Counties, TX	90.1	%	(f)	October 2016	12 years

(a) Southern Power owns 100% of the class A membership interests and a wholly-owned subsidiary of the seller owns 100% of the class B membership interests. Southern Power and the class B member are entitled to 51% and 49%, respectively, of all cash distributions from the project. In addition, Southern Power is entitled to substantially all of the federal tax benefits with respect to the transaction.

(b) Southern Power originally purchased 90%, with a minority owner owning 10%. During 2017, Southern Power acquired the remaining 10% ownership interest.

(c) In addition to the 20-year and 12-year PPAs, the facility has a 10-year contract with Allianz Risk Transfer (Bermuda) Ltd.

(d) Under the terms of the PPA and the expansion PPA, approximately $442 million of assets, primarily related to property, plant, and equipment, are subject to lien at December 31, 2017.

(e) The acquisition included a fully operational 375-MW natural gas-fired combined-cycle facility.

(f) Southern Power owns 90.1%, with the minority owner, Invenergy Wind Global LLC, owning 9.9%.

Acquisitions During the Year Ended December 31, 2016

Southern Power's aggregate purchase price for acquisitions during the year ended December 31, 2016 was approximately $2.3 billion. The total aggregate purchase price including minority ownership contributions and the assumption of non-recourse construction debt to Southern Power was approximately $2.6 billion for these acquisitions. In connection with Southern Power's 2016 acquisitions, allocations of the purchase price to individual assets were finalized during the year ended December 31, 2017 with no changes to amounts originally reported for Boulder 1, Grant Plains, Grant Wind, Henrietta, Mankato, Passadumkeag, Salt Fork, Tyler Bluff, and Wake Wind. The fair values of the assets and liabilities acquired through the business combinations were recorded as follows:

	2016
	(in millions)
CWIP	$	2,354
Property, plant, and equipment	302
Intangible assets (a)	128
Other assets	52
Accounts payable	(16		)
Debt	(217		)
Total purchase price	$	2,603
Funded by:
Southern Power (b) (c)	$	2,345
Noncontrolling interests (d) (e)	258
Total purchase price	$	2,603

(a) Intangible assets consist of acquired PPAs that will be amortized over 10- and 20-year terms. The estimated amortization for future periods is approximately $9 million per year. See Note 1 for additional information.

(b) At December 31, 2016, $461 million is included in acquisitions payable on the balance sheets.

(c) Includes approximately $281 million of contingent consideration, of which $29 million was payable at December 31, 2017.

(d) Includes approximately $51 million of non-cash contributions recorded as capital contributions from noncontrolling interests in the statements of stockholders' equity.

(e) Includes approximately $142 million of contingent consideration, all of which had been paid at December 31, 2016 by the noncontrolling interests.

Southern Company Gas

Investment in Southern Natural Gas

In September 2016, Southern Company Gas completed its acquisition from Kinder Morgan, Inc. of a 50% equity interest in Southern Natural Gas Company, L.L.C. (SNG), which is the owner of a 7,000-mile pipeline system connecting natural gas supply basins in Texas, Louisiana, Mississippi, and Alabama to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, and Tennessee. The purchase price of the acquisition was approximately $1.4 billion. The investment in SNG is accounted for using the equity method.

Acquisition of Remaining Interest in SouthStar

SouthStar Energy Services, LLC (SouthStar) is a retail natural gas marketer and markets natural gas to residential, commercial, and industrial customers, primarily in Georgia and Illinois. Southern Company Gas previously had an 85% ownership interest in SouthStar, with Piedmont Natural Gas Company, Inc.'s (Piedmont) owning the remaining 15%. In October 2016, Southern Company Gas purchased Piedmont's 15% interest in SouthStar for $160 million.

Proposed Sale of Elizabethtown Gas and Elkton Gas

On October 15, 2017, Southern Company Gas subsidiary, Pivotal Utility Holdings, entered into agreements for the sale of the assets of two of its natural gas distribution utilities, Elizabethtown Gas and Elkton Gas, to South Jersey Industries, Inc. for a total cash purchase price of $1.7 billion. The completion of each asset sale is subject to the satisfaction or waiver of certain conditions, including, among other customary closing conditions, the receipt of required regulatory approvals, including the FERC, the Federal Communications Commission, the New Jersey BPU, and, with respect to the sale of Elkton Gas, the Maryland PSC. Southern Company Gas and South Jersey Industries, Inc. made joint filings on December 22, 2017 and January 16, 2018 with the New Jersey BPU and the Maryland PSC, respectively, requesting regulatory approval. The asset sales are expected to be completed by the end of the third quarter 2018.

The ultimate outcome of these matters cannot be determined at this time.

SOUTHERN POWER CO

Business Acquisition [Line Items]

MERGER, ACQUISITION, AND DISPOSITIONS

ACQUISITIONS

During 2017 and 2016, in accordance with its overall growth strategy, the Company or one of its wholly-owned subsidiaries, acquired or contracted to acquire the projects discussed below. Also, in March 2016, the Company acquired an additional 15% interest in Desert Stateline, 51% of which was initially acquired in 2015. As a result, the Company and the class B member are now entitled to 66% and 34%, respectively, of all cash distributions from Desert Stateline. In addition, the Company will continue to be entitled to substantially all of the federal tax benefits with respect to the transaction. Acquisition-related costs were expensed as incurred and were not material for any of the years presented.

The following table presents the Company's acquisition activity for the year ended, and subsequent to, December 31, 2017.

Project Facility	Resource	Seller, Acquisition Date	Approximate Nameplate Capacity (MW)	Location	Ownership Percentage			Actual / Expected COD	PPA Contract Period
Business Acquisitions During the Year Ended December 31, 2017
Bethel	Wind	Invenergy Wind Global LLC, January 6, 2017	276	Castro County, TX	100	%		January 2017	12 years
Cactus Flats(a)	Wind	RES America Developments, Inc., July 31, 2017	148	Concho County, TX	100	%		Third quarter 2018	12 years and 15 years
Asset Acquisitions Subsequent to December 31, 2017
Gaskell West 1	Solar	Recurrent Energy Development Holdings, LLC, January 26, 2018	20	Kern County, CA	100% of Class B		(b)	March 2018	20 years

(a) On July 31, 2017, the Company purchased 100% of the Cactus Flats facility and commenced construction. Upon placing the facility in service, the Company expects to close on a tax equity partnership agreement that has already been executed, subject to various customary conditions at closing, and will then own 100% of the class B membership interests.

(b) The Company owns 100% of the class B membership interest under a tax equity partnership agreement.

Business Acquisitions During the Year Ended December 31, 2017

The Company's aggregate purchase price for acquisitions during the year ended December 31, 2017 was $539 million. The fair values of the assets acquired and liabilities assumed were finalized in 2017 and recorded as follows:

	2017
	(in millions)
Restricted cash	$	16
CWIP	534
Other assets	5
Accounts payable	(16		)
Total purchase price	$	539

In 2017, total revenues of $15 million and net income of $17 million, primarily as a result of PTCs, was recognized in the consolidated statements of income by the Company related to the 2017 acquisitions. The Bethel facility did not have operating revenues or activities prior to completion of construction and being placed in service, and the Cactus Flats facility is still under construction. Therefore, supplemental pro forma information as though the acquisitions occurred as of the beginning of 2017 and for the comparable 2016 period is not meaningful and has been omitted.

Construction Projects in Progress

During the year ended December 31, 2017, in accordance with its overall growth strategy, the Company continued construction on the 345-MW Mankato expansion project and commenced construction on the Cactus Flats facility. Total aggregate construction costs for these facilities, excluding acquisition costs and including construction costs to complete the subsequently-acquired Gaskell West 1 solar project, are expected to be between $385 million and $430 million. At December 31, 2017, construction costs included in CWIP related to these projects totaled $188 million. The ultimate outcome of these matters cannot be determined at this time.

Development Projects

During 2017, as part of the Company's renewable development strategy, the Company purchased wind turbine equipment from Siemens Wind Power, Inc. and Vestas-American Wind Technology, Inc. to be used for various development and construction projects, up to900 MWs in total. Once these wind projects reach commercial operations, which is expected in 2021, they are expected to qualify for80%PTCs.

During 2016, the Company entered into a joint development agreement with Renewable Energy Systems Americas, Inc. to develop and construct approximately 3,000 MWs of wind projects expected to be placed in service between 2018 and 2020. In addition, in 2016, the Company purchased wind turbine equipment from Siemens Wind Power, Inc. and Vestas-American Wind Technology, Inc. to be used for construction of the facilities. Once these wind projects reach commercial operations, they are expected to qualify for100%PTCs.

The ultimate outcome of these matters cannot be determined at this time.

The following table presents the Company's acquisitions for the year ended December 31, 2016.

Project Facility	Resource	Seller, Acquisition Date	Approximate Nameplate Capacity (MW)	Location	Ownership Percentage			Actual COD	PPA Contract Period
Acquisitions for the Year Ended December 31, 2016
Boulder 1	Solar	SunPower Corporation, November 16, 2016	100	Clark County, NV	51	%	(a)	December 2016	20 years
Calipatria	Solar	Solar Frontier Americas Holding LLC, February 11, 2016	20	Imperial County, CA	100	%	(b)	February 2016	20 years
East Pecos	Solar	First Solar, Inc., March 4, 2016	120	Pecos County, TX	100	%		March 2017	15 years
Grant Plains	Wind	Apex Clean Energy Holdings, LLC, August 26, 2016	147	Grant County, OK	100	%		December 2016	20 years and 12 years (c)
Grant Wind	Wind	Apex Clean Energy Holdings, LLC, April 7, 2016	151	Grant County, OK	100	%		April 2016	20 years
Henrietta	Solar	SunPower Corporation, July 1, 2016	102	Kings County, CA	51	%	(a)	July 2016	20 years
Lamesa	Solar	RES America Developments Inc., July 1, 2016	102	Dawson County, TX	100	%		April 2017	15 years
Mankato (d)	Natural Gas	Calpine Corporation, October 26, 2016	375	Mankato, MN	100	%		N/A (e)	10 years
Passadumkeag	Wind	Quantum Utility Generation, LLC, June 30, 2016	42	Penobscot County, ME	100	%		July 2016	15 years
Rutherford	Solar	Cypress Creek Renewables, LLC, July 1, 2016	74	Rutherford County, NC	100	%	(b)	December 2016	15 years
Salt Fork	Wind	EDF Renewable Energy, Inc., December 1, 2016	174	Donley and Gray Counties, TX	100	%		December 2016	14 years and 12 years
Tyler Bluff	Wind	EDF Renewable Energy, Inc., December 21, 2016	125	Cooke County, TX	100	%		December 2016	12 years
Wake Wind	Wind	Invenergy Wind Global LLC, October 26, 2016	257	Floyd and Crosby Counties, TX	90.1	%	(f)	October 2016	12 years

(a) The Company owns 100% of the class A membership interests and a wholly-owned subsidiary of the seller owns 100% of the class B membership interests. The Company and the class B member are entitled to 51% and 49%, respectively, of all cash distributions from the project. In addition, the Company is entitled to substantially all of the federal tax benefits with respect to the transaction.

(b) The Company originally purchased 90%, with a minority owner owning 10%. During 2017, the Company acquired the remaining 10% ownership interest. See Note 10 for additional information.

(c) In addition to the 20-year and 12-year PPAs, the facility has a 10-year contract with Allianz Risk Transfer (Bermuda) Ltd.

(d) Under the terms of the PPA and the expansion PPA, approximately $442 million of assets, primarily related to property, plant, and equipment, are subject to lien at December 31, 2017.

(e) The acquisition included a fully operational 375-MW natural gas-fired combined-cycle facility.

(f) The Company owns 90.1%, with the minority owner, Invenergy Wind Global LLC, owning 9.9%.

Acquisitions During the Year Ended December 31, 2016

The Company's aggregate purchase price for acquisitions during the year ended December 31, 2016 was approximately $2.3 billion. The total aggregate purchase price including minority ownership contributions and the assumption of non-recourse construction debt to the Company was approximately $2.6 billion for these acquisitions. In connection with the Company's 2016 acquisitions, allocations of the purchase price to individual assets were finalized during the year ended December 31, 2017 with no changes to amounts originally reported for Boulder 1, Grant Plains, Grant Wind, Henrietta, Mankato, Passadumkeag, Salt Fork, Tyler Bluff, and Wake Wind. The fair values of the assets and liabilities acquired through the business combinations were recorded as follows:

	2016
	(in millions)
CWIP	$	2,354
Property, plant, and equipment	302
Intangible assets (a)	128
Other assets	52
Accounts payable	(16		)
Debt	(217		)
Total purchase price	$	2,603
Funded by:
The Company (b) (c)	$	2,345
Noncontrolling interests (d) (e)	258
Total purchase price	$	2,603

(a) Intangible assets consist of acquired PPAs that will be amortized over 10- and 20-year terms. The estimated amortization for future periods is approximately $9 million per year. See Note 1 for additional information.

(b) At December 31, 2016, $461 million is included in acquisitions payable on the consolidated balance sheets.

(c) Includes approximately $281 million of contingent consideration, of which $29 million was payable at December 31, 2017.

(d) Includes approximately $51 million of non-cash contributions recorded as capital contributions from noncontrolling interests in the consolidated statements of stockholders' equity.

(e) Includes approximately $142 million of contingent consideration, all of which had been paid at December 31, 2016 by the noncontrolling interests.

SOUTHERN Co GAS

Business Acquisition [Line Items]

MERGER, ACQUISITION, AND DISPOSITIONS

MERGER, ACQUISITION, AND DISPOSITIONS

Merger with Southern Company

On July 1, 2016, the Company completed the Merger with Southern Company. A wholly-owned, direct subsidiary of Southern Company merged with and into Southern Company Gas, with the Company surviving as a wholly-owned, direct subsidiary of Southern Company.

At the effective time of the Merger, each share of Southern Company Gas common stock, other than certain excluded shares, was converted into the right to receive $66 in cash, without interest. Also at the effective time of the Merger, all of the outstanding restricted stock units, restricted stock awards, non-employee director stock awards, stock options, and performance share units were either redeemed or converted into Southern Company's restricted stock units. See Note 8 for additional information.

The application of the acquisition method of accounting was pushed down to the Company. The excess of the purchase price over the fair values of the Company's assets and liabilities was recorded as goodwill, which represents a different basis of accounting from the historical basis prior to the Merger. The following table presents the final purchase price allocation:

	Successor			Predecessor
	New Basis			Old Basis			Change in Basis
	(in millions)			(in millions)
Current assets	$	1,557		$	1,474		$	83
Property, plant, and equipment	10,108			10,148			(40		)
Goodwill	5,967			1,813			4,154
Other intangible assets	400			101			299
Regulatory assets	1,118			679			439
Other assets	229			273			(44		)
Current liabilities	(2,201		)	(2,205		)	4
Other liabilities	(4,742		)	(4,600		)	(142		)
Long-term debt	(4,261		)	(3,709		)	(552		)
Contingently redeemable noncontrolling interest	(174		)	(41		)	(133		)
Total purchase price/equity	$	8,001		$	3,933		$	4,068

Measurement period adjustments were recorded to the purchase price allocation during the fourth quarter 2016, which resulted in a net $30 million increase in goodwill to establish intangible liabilities for transportation contracts at wholesale services, partially offset by adjustments to deferred tax balances.

In determining the fair value of assets and liabilities subject to rate regulation that allows recovery of costs and/or a fair return on investments, historical cost was deemed to be a reasonable proxy for fair value, as it is included in rate base or otherwise specified in regulatory recovery mechanisms. Property, plant, and equipment subject to rate regulation was reflected based on the historical gross amount of assets in service and accumulated depreciation, as they are included in rate base. For certain assets and liabilities subject to rate regulation (such as debt instruments and employee benefit obligations), the fair value adjustment was applied to historical cost with a corresponding offset to regulatory asset or liability based on the assessment of probable future recovery in rates.

For unregulated assets and liabilities, fair value adjustments were applied to historical cost of natural gas for sale, property, plant, and equipment, debt instruments, and noncontrolling interest. The valuation of other intangible assets included customer relationships, trade names, and favorable/unfavorable contracts. The valuation of these assets and liabilities applied either the market approach or income approach. The market approach was utilized when prices and other relevant market information were available. The income approach, which is based on discounted cash flows, was primarily based on significant unobservable inputs (Level 3). Key estimates and inputs included forecasted profitability and cash flows, customer retention rates, royalty rates, and discount rates.

The estimated fair value of deferred income taxes was determined by applying the appropriate enacted statutory tax rate to the temporary differences that arose on the differences between the financial reporting value and tax basis of the assets acquired and liabilities assumed.

The excess of the purchase price over the estimated fair value of assets and liabilities of $6 billion was recognized as goodwill, which is primarily attributable to positioning Southern Company to provide natural gas infrastructure to meet customers' growing energy needs and to compete for growth across the energy value chain. The Company anticipates that the majority of the value assigned to goodwill will not be deductible for tax purposes.

The receipt of required regulatory approvals was conditioned upon certain terms and commitments. In connection with these regulatory approvals, certain regulatory agencies prohibited the Company from recovering goodwill and Merger-related expenses, required the Company to maintain a minimum number of employees for a set period of time to ensure that certain pipeline safety standards and the competence level of the employee workforce is not degraded, and/or required the Company to maintain its pre-Merger level of support for various social and charitable programs. The most notable terms and commitments with potential financial impacts included:

• rate credits of $18 million to be paid to customers in New Jersey and Maryland;

• sharing of Merger savings with customers in Georgia starting in 2020;

• phasing-out the use of the Nicor name or logo by certain of the Company's gas marketing services subsidiaries in conducting non-utility business in Illinois;

• reaffirming that Elizabethtown Gas would file a base rate case no later than September 1, 2016, with another base rate case no later than three years after the 2016 rate case; and

• requiring Elkton Gas to file a base rate case within two years of closing the Merger.

There is no restriction on the Company's other utilities' ability to file future rate cases. The rate credits to customers in New Jersey and Maryland were paid during the third and fourth quarters of 2016, respectively. The use of the Nicor name and logo was phased out, effective November 1, 2017, by certain of the Company's gas marketing services subsidiaries in conducting non-utility business in Illinois. Elizabethtown Gas filed a base rate case with the New Jersey BPU on September 1, 2016. See Note 3 under "Base Rate Cases" for additional information. Upon completion of the Merger, the Company amended and restated its Bylaws and Articles of Incorporation, under which it now has the authority to issue no more than 110 million shares of stock consisting of (i) 100 million shares of common stock and (ii) 10 million shares of preferred stock, both categories of which have a par value of $0.01 per share. The amended and restated Articles of Incorporation do not allow any treasury shares to be held.

Investment in SNG

In September 2016, the Company, through a wholly-owned, indirect subsidiary, acquired a 50% equity interest in SNG pursuant to a definitive agreement between Southern Company and Kinder Morgan, Inc. in July 2016, to which Southern Company assigned all rights and obligations to the Company in August 2016. SNG owns a 7,000-mile pipeline system connecting natural gas supply basins in Texas, Louisiana, Mississippi, and Alabama to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, and Tennessee. The purchase price of $1.4 billion was financed by a $1.05 billion equity contribution from Southern Company and $360 million of cash paid by the Company, which was financed by a promissory note from Southern Company repaid with a portion of the proceeds from senior notes issued in September 2016. The purchase price of the 50% equity interest exceeded the underlying ownership interest in the net assets of SNG by approximately $700 million. This basis difference is attributable to goodwill and deferred tax assets. While the deferred tax assets will be amortized through deferred tax expense, the goodwill will not be amortized and is not required to be tested for impairment on an annual basis. The Company's investment in SNG decreased by $104 million related to the impact of the Tax Reform Legislation and new income tax apportionment factors in several states resulting from the Company's inclusion in the consolidated Southern Company state tax filings.

On March 31, 2017, the Company made an additional $50 million contribution to maintain its 50% equity interest in SNG. See Note 4 under "Equity Method Investments" for additional information on this investment.

Proposed Sale of Elizabethtown Gas and Elkton Gas

On October 15, 2017, the Company's subsidiary, Pivotal Utility Holdings, entered into agreements for the sale of the assets of two of its natural gas distribution utilities, Elizabethtown Gas and Elkton Gas, to South Jersey Industries, Inc. for a total cash purchase price of $1.7 billion. The completion of each asset sale is subject to the satisfaction or waiver of certain conditions, including, among other customary closing conditions, the receipt of required regulatory approvals, including the FERC, the Federal Communications Commission, the New Jersey BPU, and, with respect to the sale of Elkton Gas, the Maryland PSC. The Company and South Jersey Industries, Inc. made joint filings on December 22, 2017 and January 16, 2018 with the New Jersey BPU and the Maryland PSC, respectively, requesting regulatory approval. The asset sales are expected to be completed by the end of the third quarter 2018.

The ultimate outcome of these matters cannot be determined at this time.