Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	2017			2016			2015
	(in millions)
Federal —
Current	$	(62	)	$	1,184		$	(177	)
Deferred	(6		)	(342		)	1,266
	(68		)	842			1,089
State —
Current	37			(108		)	(33		)
Deferred	173			217			138
	210			109			105
Total	$	142		$	951		$	1,194

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017			2016
	(in millions)
Deferred tax liabilities —
Accelerated depreciation	$	10,267		$	15,392
Property basis differences	955			2,708
Leveraged lease basis differences	251			314
Employee benefit obligations	516			737
Premium on reacquired debt	54			89
Regulatory assets associated with employee benefit obligations	1,046			1,584
Regulatory assets associated with AROs	1,225			1,781
Other	697			907
Total	15,011			23,512
Deferred tax assets —
Federal effect of state deferred taxes	326			597
Employee benefit obligations	1,307			1,868
Over recovered fuel clause	—			66
Other property basis differences	446			401
Deferred costs	69			100
ITC carryforward	2,420			1,974
Federal NOL carryforward	518			1,084
Unbilled revenue	57			92
Other comprehensive losses	84			152
AROs	1,197			1,732
Estimated Loss on Kemper IGCC	722			484
Deferred state tax assets	328			266
Regulatory liability associated with the Tax Reform Legislation (not subject to normalization)	465			—
Other	485			679
Total	8,424			9,495
Valuation allowance	(149		)	(23		)
Total deferred income taxes	6,736			14,040
Portion included in accumulated deferred tax assets	(106		)	(52		)
Accumulated deferred income taxes	$	6,842		$	14,092

Summary of operating loss carryforward

At December 31, 2017, the state NOL carryforwards for Southern Company's subsidiaries were as follows:

Jurisdiction	Approximate NOL Carryforwards		Approximate Net State Income Tax Benefit		Tax Year NOL Begins Expiring
	(in millions)
Mississippi	$	2,890	$	114	2032
Oklahoma	986		47		2036
Georgia	524		23		2019
New York	229		13		2036
New York City	209		15		2036
Florida	304		13		2034
Other states	465		24		Various
Total	$	5,607	$	249

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2017		2016		2015
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal deduction	12.5		2.1		1.9
Employee stock plans dividend deduction	(4.1	)	(1.2	)	(1.2	)
Non-deductible book depreciation	3.1		0.9		1.2
AFUDC-Equity	(2.6	)	(2.0	)	(2.2	)
Non-deductible equity portion on Kemper IGCC write-off	15.7		—		—
ITC basis difference	(1.7	)	(5.0	)	(1.5	)
Federal PTCs	(12.1	)	(1.2	)	—
Amortization of ITC	(4.2	)	(0.9	)	(0.5	)
Tax Reform Legislation	(25.6	)	—		—
Other	(2.7	)	(0.4	)	0.2
Effective income tax rate	13.3	%	27.3	%	32.9	%

Changes in unrecognized tax benefits

Changes during the year in unrecognized tax benefits were as follows:

	2017			2016			2015
	(in millions)
Unrecognized tax benefits at beginning of year	$	484		$	433		$	170
Tax positions increase from current periods	10			45			43
Tax positions increase from prior periods	10			21			240
Tax positions decrease from prior periods	(196		)	(15		)	(20		)
Reductions due to settlements	(290		)	—			—
Balance at end of year	$	18		$	484		$	433

Impact on effective tax rate

The impact on Southern Company's effective tax rate, if recognized, is as follows:

	2017		2016		2015
	(in millions)
Tax positions impacting the effective tax rate	$	18	$	20	$	10
Tax positions not impacting the effective tax rate	—		464		423
Balance of unrecognized tax benefits	$	18	$	484	$	433

ALABAMA POWER CO

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	2017		2016		2015
	(in millions)
Federal —
Current	$	136	$	103	$	110
Deferred	336		339		320
	472		442		430
State —
Current	23		20		8
Deferred	73		69		68
	96		89		76
Total	$	568	$	531	$	506

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017		2016
	(in millions)
Deferred tax liabilities —
Accelerated depreciation	$	2,336	$	4,307
Property basis differences	398		456
Premium on reacquired debt	16		26
Employee benefit obligations	162		201
Regulatory assets associated with employee benefit obligations	260		393
Asset retirement obligations	220		289
Regulatory assets associated with asset retirement obligations	249		347
Other	147		179
Total	3,788		6,198
Deferred tax assets —
Federal effect of state deferred taxes	143		266
Unbilled fuel revenue	22		36
Storm reserve	5		21
Employee benefit obligations	286		427
Other comprehensive losses	10		19
Asset retirement obligations	469		636
Other	93		139
Total	1,028		1,544
Accumulated deferred income taxes, net	$	2,760	$	4,654

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2017	2016	2015
Federal statutory rate	35.0%	35.0%	35.0%
State income tax, net of federal deduction	4.4	4.2	3.8
Non-deductible book depreciation	0.9	1.0	1.2
AFUDC equity	(1.0)	(0.7)	(1.6)
Tax Reform Legislation	0.3	—	—
Other	—	(0.7)	—
Effective income tax rate	39.6%	38.8%	38.4%

GEORGIA POWER CO

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	2017			2016		2015
	(in millions)
Federal –
Current	$	256		$	391	$	515
Deferred	504			319		176
	760			710		691
State –
Current	116			6		81
Deferred	(46		)	64		(3		)
	70			70		78
Total	$	830		$	780	$	769

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017		2016
	(in millions)
Deferred tax liabilities –
Accelerated depreciation	$	3,540	$	5,266
Property basis differences	—		957
Employee benefit obligations	287		428
Premium on reacquired debt	34		56
Regulatory assets –
Storm damage reserves	89		83
Employee benefit obligations	348		546
Asset retirement obligations	501		726
Retired assets	30		55
Asset retirement obligations	132		182
Other	100		83
Total	5,061		8,382
Deferred tax assets –
Federal effect of state deferred taxes	72		173
Employee benefit obligations	423		661
Property basis differences	92		105
Other deferred costs	69		100
State investment tax credit carryforward	318		201
Federal tax credit carryforward	97		84
Unbilled fuel revenue	26		47
Regulatory liabilities associated with asset retirement obligations	5		33
Asset retirement obligations	631		908
Regulatory liability associated with Tax Reform Legislation (not subject to normalization)	123		—
Other	30		70
Total	1,886		2,382
Accumulated deferred income taxes	$	3,175	$	6,000

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2017		2016		2015
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal deduction	2.0		2.1		2.5
Non-deductible book depreciation	0.7		0.8		1.2
AFUDC equity	(0.6	)	(0.8	)	(0.7	)
Tax Reform Legislation	(0.4	)	—		—
Other	—		(0.4	)	(0.4	)
Effective income tax rate	36.7	%	36.7	%	37.6	%

GULF POWER CO

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	2017			2016		2015
	(in millions)
Federal -
Current	$	19		$	34	$	(3	)
Deferred	58			45		80
	77			79		77
State -
Current	(1		)	—		5
Deferred	14			12		10
	13			12		15
Total	$	90		$	91	$	92

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017		2016
	(in millions)
Deferred tax liabilities-
Accelerated depreciation	$	552	$	834
Property basis differences	105		123
Pension and other employee benefits	38		58
Regulatory assets	22		45
Regulatory assets associated with employee benefit obligations	44		65
Regulatory assets associated with asset retirement obligations	38		55
Other	13		12
Total	812		1,192
Deferred tax assets-
Federal effect of state deferred taxes	25		37
Postretirement benefits	17		26
Pension and other employee benefits	49		72
Property differences	98		1
Regulatory liability associated with Tax Reform Legislation (not subject to normalization)	19		—
Property reserve	10		17
Asset retirement obligations	38		55
Alternative minimum tax carryforward	7		18
Other	12		18
Total	275		244
Accumulated deferred income taxes	$	537	$	948

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2017	2016	2015
Federal statutory rate	35.0%	35.0%	35.0%
State income tax, net of federal deduction	3.7	3.4	3.9
Non-deductible book depreciation	0.2	0.6	0.5
Differences in prior years' deferred and current tax rates	—	(0.1)	(0.1)
AFUDC equity	—	—	(1.8)
Other, net	0.5	0.6	(0.6)
Effective income tax rate	39.4%	39.5%	36.9%

MISSISSIPPI POWER CO

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	2017			2016			2015
	(in millions)
Federal —
Current	$	194		$	(31	)	$	(768	)
Deferred	(753		)	(60		)	704
	(559		)	(91		)	(64		)
State —
Current	—			(6		)	(81		)
Deferred	27			(7		)	73
	27			(13		)	(8		)
Total	$	(532	)	$	(104	)	$	(72	)

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017			2016
	(in millions)
Deferred tax liabilities —
Accelerated depreciation	$	373		$	386
Property basis difference	242			852
Regulatory assets associated with AROs	34			72
Pensions and other benefits	28			49
Regulatory assets associated with employee benefit obligations	45			70
Regulatory assets associated with the Kemper County energy facility	31			82
Regulatory assets associated with Plant Daniel	9			13
Rate differential	—			141
Federal effect of state deferred taxes	9			—
Ad valorem over/under recovery	11			14
Regulatory assets for Mercury and Air Toxics Standards compliance	11			8
Other	11			91
Total	804			1,778
Deferred tax assets —
Fuel clause over recovered	—			26
Estimated loss on Kemper IGCC	722			484
Pension and other benefits	62			96
Federal NOL	40			109
Property insurance	15			27
Premium on long-term debt	7			14
AROs	34			72
Property basis difference	70			—
Affirmative adjustments	31			—
Regulatory liability associated with Tax Reform Legislation (not subject to normalization)	27			—
Deferred state tax assets	133			113
Deferred federal tax assets	—			31
Federal effect of state deferred taxes	—			19
Other	32			31
Total	1,173			1,022
Valuation allowance (net of $35 million in federal benefit)	122			—
Accumulated deferred income tax (assets)/liabilities	(247		)	756

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2017		2016		2015
Federal statutory rate	(35.0	)%	(35.0	)%	(35.0	)%
State income tax, net of federal deduction	0.6		(5.7	)	(6.3	)
Non-deductible book depreciation	0.1		0.7		1.3
AFUDC-equity	—		(28.5	)	(49.6	)
Non-deductible equity portion on Kemper IGCC write-off	5.3		—		—
Tax Reform Legislation	11.9		—		—
Other	—		—		(2.9	)
Effective income tax rate (benefit rate)	(17.1	)%	(68.5	)%	(92.5	)%

Changes in unrecognized tax benefits

Changes during the year in unrecognized tax benefits were as follows:

	2017			2016		2015
	(in millions)
Unrecognized tax benefits at beginning of year	$	465		$	421	$	165
Tax positions increase from current periods	—			26		32
Tax positions increase from prior periods	2			18		224
Tax positions decrease from prior periods	(177		)	—		—
Reductions due to settlements	(290		)	—		—
Balance at end of year	$	—		$	465	$	421

Impact on effective tax rate

The impact on the Company's effective tax rate, if recognized, is as follows:

	2017		2016		2015
	(in millions)
Tax positions impacting the effective tax rate	$	—	$	1	$	(2	)
Tax positions not impacting the effective tax rate	—		464		423
Balance of unrecognized tax benefits	$	—	$	465	$	421

Accrued interest for unrecognized tax benefits

Accrued interest for unrecognized tax benefits was as follows:

	2017			2016		2015
	(in millions)
Interest accrued at beginning of year	$	28		$	13	$	3
Interest accrued during the year	(28		)	15		10
Balance at end of year	$	—		$	28	$	13

SOUTHERN POWER CO

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	2017			2016			2015
	(in millions)
Federal —
Current (*)	$	(566	)	$	928		$	12
Deferred (*)	(312		)	(1,098		)	10
	(878		)	(170		)	22
State —
Current	(110		)	(60		)	(32		)
Deferred	49			35			31
	(61		)	(25		)	(1		)
Total	$	(939	)	$	(195	)	$	21

(*) ITCs and PTCs generated in the current tax year and carried forward from prior tax years that cannot be utilized in the current tax year are reclassified from current to deferred taxes in federal income tax expense above. ITCs and PTCs reclassified in this manner include $316 million for 2017, $1.13 billion for 2016, and $246 million for 2015. These ITCs and PTCs are included in the following table of temporary differences as unrealized tax credits.

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017			2016
	(in millions)
Deferred tax liabilities —
Accelerated depreciation and other property basis differences	$	1,922		$	2,440
Levelized capacity revenues	26			28
Other	6			27
Total deferred income tax liabilities	1,954			2,495
Deferred tax assets —
Federal effect of state deferred taxes	42			53
Basis difference on ITCs	184			292
Alternative minimum tax carryforward	21			15
Unrealized tax credits	2,002			1,685
Federal net operating loss (NOL)	333			808
Deferred state tax assets	77			60
Other partnership basis differences	24			16
Other	10			8
Total deferred income tax assets	2,693			2,937
Valuation Allowance	(13		)	—
Net deferred income tax assets	2,680			2,937
Total deferred income tax asset (liability)	$	726		$	442
Recognized in the consolidated balance sheets:
Accumulated deferred income taxes – assets	$	925		$	594
Accumulated deferred income taxes – liability	$	(199	)	$	(152	)

Summary of operating loss carryforward

The state NOL carryforwards by state jurisdiction were as follows:

Jurisdiction	Approximate NOL Carryforwards		Approximate Net State Income Tax Benefit		Tax Year NOL Expires
	(in millions)
Oklahoma	$	978	$	46	2035
Florida	283		12		2033
South Carolina	48		2		2035
Other states	23		1		2029-2035
Balance at year end	$	1,332	$	61

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2017		2016		2015
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income tax, net of federal deduction	(22.2	)	(9.1	)	(0.3	)
Amortization of ITC	(31.8	)	(20.6	)	(5.0	)
ITC basis difference	(10.0	)	(89.0	)	(21.5	)
Production tax credits	(72.5	)	(23.3	)	(0.6	)
Tax Reform Legislation	(416.1	)	—		—
Noncontrolling interests	(8.6	)	(6.2	)	(1.7	)
Other	0.5		4.6		2.5
Effective income tax rate (benefit)	(525.7	)%	(108.6	)%	8.4	%

Changes in unrecognized tax benefits

Changes during the year in unrecognized tax benefits were as follows:

	2017			2016			2015
	(in millions)
Balance at beginning of year	$	17		$	8		$	5
Tax positions increase from current periods	—			17			9
Tax positions decrease from prior periods	(17		)	(8		)	(6		)
Balance at end of year	$	—		$	17		$	8

SOUTHERN Co GAS

Income Tax Disclosure [Line Items]

Details of income tax provisions

Details of income tax provisions are as follows:

	Successor					Predecessor
	Year ended December 31, 2017		July 1, 2016 through December 31, 2016			January 1, 2016 through June 30, 2016		Year ended December 31, 2015
	(in millions)					(in millions)
Federal —
Current	$	103	$	—		$	67	$	(13	)
Deferred	170		65			8		198
	273		65			75		185
State —
Current	27		(16		)	12		10
Deferred	67		27			—		18
	94		11			12		28
Total	$	367	$	76		$	87	$	213

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	2017			2016
	(in millions)
Deferred tax liabilities —
Accelerated depreciation	$	1,436		$	1,954
Property basis differences	204			311
Regulatory assets associated with employee benefit obligations	79			125
Other	208			164
Total	1,927			2,554
Deferred tax assets —
Federal net operating loss	92			59
Federal effect of state deferred taxes	54			42
Employee benefit obligations	185			165
Regulatory liability associated with the Tax Reform Legislation (not subject to normalization)	295			—
Other	223			332
Total	849			598
Less valuation allowances	(11		)	(19		)
Total, net of valuation allowances	838			579
Accumulated deferred income taxes, net	$	1,089		$	1,975

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	Successor		Predecessor
	Year ended December 31, 2017	July 1, 2016 through December 31, 2016	January 1, 2016 through June 30, 2016	Year ended December 31, 2015
Federal statutory rate	35.0%	35.0%	35.0%	35.0%
State income tax, net of federal deduction	4.0	4.0	3.5	3.4
Tax Reform Legislation	15.0	—	—	—
State tax legislation and rate changes	6.2	—	—	—
Other	—	1.0	(0.9)	(2.0)
Effective income tax rate	60.2%	40.0%	37.6%	36.4%