Segment and Related Information

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

SEGMENT AND RELATED INFORMATION

SEGMENT AND RELATED INFORMATION

The primary business of the Southern Company system is electricity sales by the traditional electric operating companies and Southern Power and, as a result of closing the Merger, the distribution of natural gas by Southern Company Gas. The four traditional electric operating companies – Alabama Power, Georgia Power, Gulf Power, and Mississippi Power – are vertically integrated utilities providing electric service in four Southeastern states. Southern Power constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas through seven natural gas distribution utilities and is involved in several other complementary businesses including gas marketing services, wholesale gas services, and gas midstream operations.

Southern Company's reportable business segments are the sale of electricity by the four traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $110 million and $313 million for the three and nine months ended September 30, 2016, respectively, and $104 million and $303 million for the three and nine months ended September 30, 2015, respectively. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include products and services in the areas of distributed generation, energy efficiency, and utility infrastructure, as well as investments in telecommunications and leveraged lease projects. All other inter-segment revenues are not material.

Financial data for business segments and products and services for the three and nine months ended September 30, 2016 and 2015 was as follows:

	Electric Utilities
	Traditional Electric Operating Companies		Southern Power		Eliminations			Total		Southern Company Gas		All Other			Eliminations			Consolidated
	(in millions)
Three Months Ended September 30, 2016:
Operating revenues	$	5,236	$	500	$	(117	)	$	5,619	$	543	$	139		$	(37	)	$	6,264
Segment net income (loss)(a)(b)	1,018		176		—			1,194		4		(67		)	(1		)	1,130
Nine Months Ended September 30, 2016:
Operating revenues	$	13,120	$	1,189	$	(330	)	$	13,979	$	543	$	311		$	(118	)	$	14,715
Segment net income (loss)(a)(c)	2,076		315		—			2,391		4		(161		)	(8		)	2,226
Total assets at September 30, 2016	$	71,448	$	12,351	$	(440	)	$	83,359	$	21,185	$	2,974		$	(1,156	)	$	106,362
Three Months Ended September 30, 2015:
Operating revenues	$	5,098	$	401	$	(109	)	$	5,390	$	—	$	37		$	(26	)	$	5,401
Segment net income (loss)(a)(b)	874		102		—			976		—		(18		)	1			959
Nine Months Ended September 30, 2015:
Operating revenues	$	13,123	$	1,086	$	(322	)	$	13,887	$	—	$	120		$	(86	)	$	13,921
Segment net income (loss)(a)(c)	1,912		181		—			2,093		—		3			—			2,096
Total assets at December 31, 2015	$	69,052	$	8,905	$	(397	)	$	77,560	$	—	$	1,819		$	(1,061	)	$	78,318

(a) Attributable to Southern Company.

(b) Segment net income (loss) for the traditional electric operating companies includes pre-tax charges for estimated probable losses on the Kemper IGCC of $88 million ($54 million after tax) and $150 million ($93 million after tax) for the three months ended September 30, 2016 and 2015, respectively. See Note (B) under "Integrated Coal Gasification Combined Cycle – Kemper IGCC Schedule and Cost Estimate" for additional information.

(c) Segment net income (loss) for the traditional electric operating companies includes pre-tax charges for estimated probable losses on the Kemper IGCC of $222 million ($137 million after tax) and $182 million ($112 million after tax) for the nine months ended September 30, 2016 and 2015, respectively. See Note (B) under "Integrated Coal Gasification Combined Cycle – Kemper IGCC Schedule and Cost Estimate" for additional information.

Products and Services

	Electric Utilities' Revenues
Period	Retail		Wholesale		Other		Total
	(in millions)
Three Months Ended September 30, 2016	$	4,808	$	613	$	198	$	5,619
Three Months Ended September 30, 2015	4,701		520		169		5,390
Nine Months Ended September 30, 2016	$	11,932	$	1,455	$	592	$	13,979
Nine Months Ended September 30, 2015	11,958		1,435		494		13,887

	Southern Company Gas' Revenues
Period	Gas Distribution Operations		Gas Marketing Services		All Other			Total
	(in millions)
Three and Nine Months Ended September 30, 2016	$	420	$	126	$	(3	)	$	543