Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2018

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of September 30, 2018, 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:
As of September 30, 2018:	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)(b)	$	271	$	150	$	—	$	—	$	421
Foreign currency derivatives	—		122		—		—		122
Nuclear decommissioning trusts^(c)	828		1,007		—		37		1,872
Non-qualified deferred compensation trusts:
Domestic equity	—		11		—		—		11
Foreign equity	—		6		—		—		6
Pooled funds – fixed income	—		13		—		—		13
Cash equivalents	15		—		—		—		15
Other	9		—		—		—		9
Cash equivalents	1,309		—		—		—		1,309
Total	$	2,432	$	1,309	$	—	$	37	$	3,778
Liabilities:
Energy-related derivatives^(a)(b)	$	416	$	159	$	—	$	—	$	575
Interest rate derivatives	—		72		—		—		72
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		22		—		22
Total	$	416	$	254	$	22	$	—	$	692



	Fair Value Measurements Using:
As of September 30, 2018:	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	$	—	$	7	$	—	$	—	$	7
Nuclear decommissioning trusts:^(d)
Domestic equity	469		89		—		—		558
Foreign equity	60		56		—		—		116
U.S. Treasury and government agency securities	—		18		—		—		18
Corporate bonds	26		154		—		—		180
Mortgage and asset backed securities	—		22		—		—		22
Private equity	—		—		—		37		37
Other	7		—		—		—		7
Cash equivalents	513		—		—		—		513
Total	$	1,075	$	346	$	—	$	37	$	1,458
Liabilities:
Energy-related derivatives	$	—	$	10	$	—	$	—	$	10

Georgia Power
Assets:
Energy-related derivatives	$	—	$	8	$	—	$	—	$	8
Nuclear decommissioning trusts:^(d)(e)
Domestic equity	250		1		—		—		251
Foreign equity	—		134		—		—		134
U.S. Treasury and government agency securities	—		236		—		—		236
Municipal bonds	—		82		—		—		82
Corporate bonds	—		163		—		—		163
Mortgage and asset backed securities	—		42		—		—		42
Other	16		9		—		—		25
Cash equivalents	350		—		—		—		350
Total	$	616	$	675	$	—	$	—	$	1,291
Liabilities:
Energy-related derivatives	$	—	$	22	$	—	$	—	$	22
Interest rate derivatives	—		6		—		—		6
Total	$	—	$	28	$	—	$	—	$	28

Gulf Power
Assets:
Cash equivalents	$	27	$	—	$	—	$	—	$	27
Liabilities:
Energy-related derivatives	$	—	$	8	$	—	$	—	$	8



	Fair Value Measurements Using:
As of September 30, 2018:	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	$	—	$	3	$	—	$	—	$	3
Cash equivalents	346		—		—		—		346
Total	$	346	$	3	$	—	$	—	$	349
Liabilities:
Energy-related derivatives	$	—	$	9	$	—	$	—	$	9

Southern Power
Assets:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Foreign currency derivatives	—		122		—		—		122
Total	$	—	$	125	$	—	$	—	$	125
Liabilities:
Energy-related derivatives	$	—	$	7	$	—	$	—	$	7
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		22		—		22
Total	$	—	$	30	$	22	$	—	$	52

Southern Company Gas
Assets:
Energy-related derivatives^(a)(b)	$	271	$	129	$	—	$	—	$	400
Non-qualified deferred compensation trusts:
Domestic equity	—		11		—		—		11
Foreign equity	—		6		—		—		6
Pooled funds – fixed income	—		13		—		—		13
Cash equivalents	4		—		—		—		4
Cash equivalents	26		—		—		—		26
Total	$	301	$	159	$	—	$	—	$	460
Liabilities:
Energy-related derivatives^(a)(b)	$	416	$	101	$	—	$	—	$	517


(a)	Excludes $5 million associated with premiums and certain weather derivatives accounted for based on intrinsic value rather than fair value.


(b)	Excludes cash collateral of $189 million.


(c)	For additional detail, see the nuclear decommissioning trusts sections for Alabama Power and Georgia Power in this table.


(d)	Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies.


(e)	Includes the investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. As of September 30, 2018, approximately $37 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.

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 for the three and nine months ended September 30, 2018 and 2017 by the amounts shown in the table below. The increases were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.



	Three Months Ended September 30, 2018		Three Months Ended September 30, 2017		Nine Months Ended September 30, 2018		Nine Months Ended September 30, 2017
	(in millions)
Southern Company	$	58	$	50	$	68	$	168
Alabama Power	39		25		49		87
Georgia Power	19		25		19		81

Fair Value Measurements of Investments Calculated at Net Asset Value per Share as Well as the Nature and Risk of Those Investments

As of September 30, 2018, the fair value measurements of private equity investments held in the nuclear decommissioning trusts that are calculated at net asset value per share (or its equivalent) as a practical expedient, as well as the nature and risks of those investments, were as follows:



As of September 30, 2018:	Fair Value		Unfunded Commitments
	(in millions)
Southern Company	$	37	$	47
Alabama Power	$	37	$	47

Financial Instruments for Which Carrying Amount Did Not Equal Fair Value

As of September 30, 2018, other financial instruments for which the carrying amount did not equal fair value were as follows:



	Carrying Amount		Fair Value
	(in millions)
Long-term debt, including securities due within one year:
Southern Company	$	45,524	$	45,500
Alabama Power	8,120		8,321
Georgia Power	10,227		10,159
Gulf Power	1,285		1,290
Mississippi Power	1,736		1,702
Southern Power	5,029		5,058
Southern Company Gas	5,908		5,935