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Derivatives (Tables)

12 Months Ended

Dec. 31, 2017

Notional amount of interest rate derivatives

At December 31, 2017, the following interest rate derivatives were outstanding:



	Notional Amount		Interest Rate Received	Weighted Average Interest Rate Paid	Hedge Maturity Date	Fair Value Gain (Loss) December 31, 2017
	(in millions)					(in millions)
Cash Flow Hedges of Existing Debt
	$	900	1-month LIBOR	0.79%	March 2018	$	1
Fair Value Hedges of Existing Debt
	250		5.40%	3-month LIBOR + 4.02%	June 2018	—
	500		1.95%	3-month LIBOR + 0.76%	December 2018	(3		)
	200		4.25%	3-month LIBOR + 2.46%	December 2019	(1		)
	300		2.75%	3-month LIBOR + 0.92%	June 2020	(2		)
	1,500		2.35%	1-month LIBOR + 0.87%	July 2021	(31		)
Total	$	3,650				$	(36	)

Schedule of foreign exchange contracts

At December 31, 2017, the following foreign currency derivatives were outstanding:



	Pay Notional		Pay Rate	Receive Notional		Receive Rate	Hedge Maturity Date	Fair Value Gain (Loss) at December 31, 2017
	(in millions)			(in millions)				(in millions)
Cash Flow Hedges of Existing Debt
	$	677	2.95%	€	600	1.00%	June 2022	$	55
	564		3.78%	500		1.85%	June 2026	51
Total	$	1,241		€	1,100			$	106

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected in the balance sheets as follows:



	2017						2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	10		$	43		$	73		$	27
Other deferred charges and assets/Other deferred credits and liabilities	7			24			25			33
Total derivatives designated as hedging instruments for regulatory purposes	$	17		$	67		$	98		$	60
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities	$	3		$	14		$	23		$	7
Interest rate derivatives:
Other current assets/Other current liabilities	1			4			12			1
Other deferred charges and assets/Other deferred credits and liabilities	—			34			1			28
Foreign currency derivatives:
Other current assets/Other current liabilities	—			23			—			25
Other deferred charges and assets/Other deferred credits and liabilities	129			—			—			33
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	133		$	75		$	36		$	94
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities	$	380		$	437		$	489		$	483
Other deferred charges and assets/Other deferred credits and liabilities	170			215			66			81
Interest rate derivatives:
Other current assets/Other current liabilities	—			—			1			—
Total derivatives not designated as hedging instruments	$	550		$	652		$	556		$	564
Gross amounts recognized	$	700		$	794		$	690		$	718
Gross amounts offset^(a)	$	(405	)	$	(598	)	$	(462	)	$	(524	)
Net amounts recognized in the Balance Sheets^(b)	$	295		$	196		$	228		$	194


(a)	Gross amounts offset include cash collateral held on deposit in broker margin accounts of $193 million and $62 million as of December 31, 2017 and 2016, respectively.


(b)	Net amounts of derivative instruments outstanding exclude premiums and intrinsic value associated with weather derivatives of $11 million as of December 31, 2017.

Pre-tax effects on the balance sheets

At December 31, 2017 and 2016, the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivatives designated as regulatory hedging instruments and deferred were as follows:



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2017			2016			Balance Sheet Location	2017		2016
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(34	)	$	(16	)	Other regulatory liabilities, current	$	7	$	56
	Other regulatory assets, deferred	(18		)	(19		)	Other regulatory liabilities, deferred	1		12
Total energy-related derivative gains (losses)^(*)		$	(52	)	$	(35	)		$	8	$	68


(*)	Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $6 million and $8 million as of December 31, 2017 and 2016, respectively.

Pre-tax effects on the statements of income

For the years ended December 31, 2017, 2016, and 2015, the pre-tax effects of energy-related derivatives, interest rate derivatives, and foreign currency derivatives designated as cash flow hedging instruments on the statements of income were as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)									Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Amount										Amount
Derivative Category	2017			2016			2015			Statements of Income Location	2017			2016			2015
	(in millions)										(in millions)
Energy-related derivatives	$	(47	)	$	18		$	—		Depreciation and amortization	$	(16	)	$	2		$	—
										Cost of natural gas	(2		)	(1		)	—
Interest rate derivatives	(2		)	(180		)	(22		)	Interest expense, net of amounts capitalized	(21		)	(18		)	(9		)
Foreign currency derivatives	140			(58		)	—			Interest expense, net of amounts capitalized	(23		)	(13		)	—
										Other income (expense), net^(*)	160			(82		)	—
Total	$	91		$	(220	)	$	(22	)		$	98		$	(112	)	$	(9	)


(*)	The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record euro-denominated notes.

Pre-tax effect of interest rate and energy related derivatives

For the years ended December 31, 2017, 2016, and 2015, the pre-tax effects of interest rate derivatives designated as fair value hedging instruments were as follows:



Derivatives in Fair Value Hedging Relationships		Gain (Loss)
Derivative Category	Statements of Income Location	2017			2016			2015
		(in millions)
Interest rate derivatives:	Interest expense, net of amounts capitalized	$	(22	)	$	(21	)	$	2

Pre-tax effect of interest rate and energy related derivatives

For the years ended December 31, 2017, 2016, and 2015, the pre-tax effects of energy-related derivatives not designated as hedging instruments on the statements of income were as follows:



Derivatives Not Designated as Hedging Instruments		Unrealized Gain (Loss) Recognized in Income
		Amount
Derivative Category	Statements of Income Location	2017			2016		2015
		(in millions)
Energy-related derivatives	Wholesale electric revenues	$	(4	)	$	2	$	(5	)
	Fuel	—			—		3
	Natural gas revenues^(*)	(80		)	33		—
	Cost of natural gas	(2		)	3		—
Total		$	(86	)	$	38	$	(2	)


(*)	Excludes gains (losses) recorded in natural gas revenues associated with weather derivatives of $23 million and $6 million for the years ended December 31, 2017 and 2016, respectively.

ALABAMA POWER CO

Derivative [Line Items]

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related derivatives was reflected on the balance sheets as follows:



	2017						2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	2		$	6		$	13		$	5
Other deferred charges and assets/Other deferred credits and liabilities	2			4			7			4
Total derivatives designated as hedging instruments for regulatory purposes	$	4		$	10		$	20		$	9
Gross amounts recognized	$	4		$	10		$	20		$	9
Gross amounts offset	$	(4	)	$	(4	)	$	(8	)	$	(8	)
Net amounts recognized in the Balance Sheets	$	—		$	6		$	12		$	1

Pre-tax effects on the balance sheets

At December 31, 2017 and 2016, the pre-tax effect of unrealized derivative gains (losses) arising from energy-related derivatives designated as regulatory hedging instruments and deferred were as follows:



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2017			2016			Balance Sheet Location	2017		2016
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(4	)	$	(1	)	Other regulatory liabilities, current	$	1	$	8
	Other regulatory assets, deferred	(3		)	—			Other regulatory liabilities, deferred	—		4
Total energy-related derivative gains (losses)		$	(7	)	$	(1	)		$	1	$	12

Pre-tax effects on the statements of income

For the years ended December 31, 2017, 2016, and 2015, the pre-tax effect of interest rate derivatives designated as cash flow hedging instruments on the statements of income was as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)								Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships										Amount
Derivative Category	2017		2016			2015			Statements of Income Location	2017			2016			2015
	(in millions)									(in millions)
Interest rate derivatives	$	—	$	(3	)	$	(7	)	Interest expense, net of amounts capitalized	$	(6	)	$	(6	)	$	(3	)

GEORGIA POWER CO

Derivative [Line Items]

Notional amount of interest rate derivatives

At December 31, 2017, the following interest rate derivatives were outstanding:



	Notional Amount		Interest Rate Received	Weighted Average Interest Rate Paid	Hedge Maturity Date	Fair Value Gain (Loss) December 31, 2017
	(in millions)					(in millions)
Fair Value Hedges of Existing Debt
	$	250	5.40%	3-month LIBOR + 4.02%	June 2018	$	—
	500		1.95%	3-month LIBOR + 0.76%	December 2018	(3		)
	200		4.25%	3-month LIBOR + 2.46%	December 2019	(1		)
Total	$	950				$	(4	)

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	2017						2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	2		$	(9	)	$	30		$	1
Other deferred charges and assets/Other deferred credits and liabilities	4			(10		)	14			7
Total derivatives designated as hedging instruments for regulatory purposes	$	6		$	(19	)	$	44		$	8
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets/Other current liabilities	$	—		$	(4	)	$	2		$	—
Other deferred charges and assets/Other deferred credits and liabilities	—			(1		)	—			3
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	—		$	(5	)	$	2		$	3
Gross amounts recognized	$	6		$	(24	)	$	46		$	11
Gross amounts offset	$	(6	)	$	6		$	(8	)	$	(8	)
Net amounts recognized in the Balance Sheets	$	—		$	(18	)	$	38		$	3

Pre-tax effects on the balance sheets



	Unrealized Losses						Unrealized Gains
Derivative Category	Balance Sheet Location	2017			2016		Balance Sheet Location	2017		2016
		(in millions)						(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(7	)	$	—	Other regulatory liabilities, current	$	—	$	29
	Other regulatory assets, deferred	(6		)	—		Other deferred credits and liabilities	—		7
Total energy-related derivative gains (losses)		$	(13	)	$	—		$	—	$	36

Pre-tax effects on the statements of income

For the years ended December 31, 2017, 2016, and 2015, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on the statements of income were as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
									Amount
Derivative Category	2017		2016		2015			Statements of Income Location	2017			2016			2015
	(in millions)								(in millions)
Interest rate derivatives	$	1	$	—	$	(15	)	Interest expense, net of amounts capitalized	$	(4	)	$	(4	)	$	(3	)

GULF POWER CO

Derivative [Line Items]

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related derivatives was reflected on the balance sheets as follows:



	2017				2016
Derivative Category and Balance Sheet Location	Assets		Liabilities		Assets			Liabilities
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	—	$	14	$	4		$	12
Other deferred charges and assets/Other deferred credits and liabilities	—		7		1			17
Total derivatives designated as hedging instruments for regulatory purposes	$	—	$	21	$	5		$	29
Gross amounts recognized	$	—	$	21	$	5		$	29
Gross amounts offset	$	—	$	—	$	(4	)	$	(4	)
Net amounts recognized on the Balance Sheets	$	—	$	21	$	1		$	25

Pre-tax effects on the balance sheets



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2017			2016			Balance Sheet Location	2017		2016
		(in millions)							(in millions)
Energy-related derivatives:^(*)	Other regulatory assets, current	$	(14	)	$	(9	)	Other regulatory liabilities, current	$	—	$	1
	Other regulatory assets, deferred	(7		)	(16		)	Other regulatory liabilities, deferred	—		—
Total energy-related derivative gains (losses)		$	(21	)	$	(25	)		$	—	$	1


(*)	The unrealized gains and losses for derivative contracts subject to netting arrangements were presented net on the balance sheets.

MISSISSIPPI POWER CO

Derivative [Line Items]

Notional amount of interest rate derivatives

At December 31, 2017, the following interest rate derivatives were outstanding:

Notional
Amount

Interest
Rate
Received

Weighted Average Interest
Rate Paid

Hedge
Maturity
Date

Fair Value
Gain (Loss)
December 31,
2017

(in millions)

Cash Flow Hedges of Existing Debt

900

1-month LIBOR

0.79%

March 2018

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related derivatives and interest rate derivatives was reflected on the balance sheets as follows:



	2017						2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	1		$	6		$	2		$	6
Other deferred charges and assets/Other deferred credits and liabilities	1			3			2			5
Total derivatives designated as hedging instruments for regulatory purposes	$	2		$	9		$	4		$	11
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets/Other current liabilities	$	1		$	—		$	2		$	—
Other deferred charges and assets/Other deferred credits and liabilities	—			—			1			—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	1		$	—		$	3		$	—
Gross amounts recognized	$	3		$	9		$	7		$	11
Gross amounts offset	$	(2	)	$	(2	)	$	(3	)	$	(3	)
Net amounts recognized in the Balance Sheets	$	1		$	7		$	4		$	8

Pre-tax effects on the balance sheets



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2017			2016			Balance Sheet Location	2017		2016
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(5	)	$	(5	)	Other current liabilities	$	—	$	1
	Other regulatory assets, deferred	(2		)	(3		)	Other regulatory liabilities, deferred	—		—
Total energy-related derivative gains (losses)		$	(7	)	$	(8	)		$	—	$	1

SOUTHERN POWER CO

Derivative [Line Items]

Schedule of foreign exchange contracts

At December 31, 2017, the following foreign currency derivatives were outstanding:



	Pay Notional		Pay Rate	Receive Notional		Receive Rate	Hedge Maturity Date	Fair Value Gain (Loss) at December 31, 2017
	(in millions)			(in millions)				(in millions)
Cash Flow Hedges of Existing Debt
	$	677	2.95%	€	600	1.00%	June 2022	$	55
	564		3.78%	500		1.85%	June 2026	51
Total	$	1,241		€	1,100			$	106

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related, interest rate, and foreign currency derivatives reflected in the consolidated balance sheets is as follows:



	2017						2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities	$	3		$	11		$	18		$	4
Foreign currency derivatives:
Other current assets/Other current liabilities	—			23			—			25
Other deferred charges and assets/Other deferred credits and liabilities	129			—			—			33
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	132		$	34		$	18		$	62
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities	$	—		$	2		$	3		$	1
Interest rate derivatives:
Other current assets/Other current liabilities	—			—			1			—
Total derivatives not designated as hedging instruments	$	—		$	2		$	4		$	1
Gross amounts of recognized assets and liabilities	$	132		$	36		$	22		$	63
Gross amounts offset	$	(3	)	$	(3	)	$	(5	)	$	(5	)
Net amounts of assets and liabilities	$	129		$	33		$	17		$	58

Pre-tax effects on the statements of income

For the years ended December 31, 2017, 2016, and 2015, the pre-tax effects of energy-related, interest rate, and foreign currency derivatives designated as cash flow hedging instruments on the consolidated statements of income were as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)								Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Derivative Category	2017			2016			2015		Statements of Income Location	2017			2016			2015
	(in millions)									(in millions)
Energy-related derivatives	$	(38	)	$	14		$	—	Amortization	$	(17	)	$	2		$	—
Interest rate derivatives	—			—			—		Interest expense, net of amounts capitalized	—			(1		)	(1		)
Foreign currency derivatives	140			(58		)	—		Interest expense, net of amounts capitalized	(23		)	(13		)	—
									Other income (expense), net	159			(82		)	—
Total	$	102		$	(44	)	$	—		$	119		$	(94	)	$	(1	)

SOUTHERN Co GAS

Derivative [Line Items]

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2017 and 2016, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	2017						2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)						(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	5		$	8		$	24		$	3
Other deferred charges and assets/Other deferred credits and liabilities	—			—			1			—
Total derivatives designated as hedging instruments for regulatory purposes	$	5		$	8		$	25		$	3
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	—		$	3		$	4		$	3
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	379		$	434		$	486		$	482
Other deferred charges and assets/Other deferred credits and liabilities	170			215			66			81
Total derivatives not designated as hedging instruments	$	549		$	649		$	552		$	563
Gross amounts recognized	$	554		$	660		$	581		$	569
Gross amounts offset^(a)	$	(390	)	$	(583	)	$	(435	)	$	(497	)
Net amounts recognized in the Balance Sheets ^(b)	$	164		$	77		$	146		$	72


(a)	Gross amounts offset include cash collateral held on deposit in broker margin accounts of $193 million and $62 million as of December 31, 2017 and 2016, respectively.


(b)	Net amount of derivative instruments outstanding excludes premiums and intrinsic value associated with weather derivatives of $11 million as of December 31, 2017.

Pre-tax effects on the balance sheets



		Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2017			2016			Balance Sheet Location	2017		2016
		(in millions)							(in millions)
Energy-related derivatives:
	Other regulatory assets, current	$	(4	)	$	(1	)	Other regulatory liabilities, current	$	7	$	17
	Other regulatory assets, deferred	—			—			Other regulatory liabilities, deferred	—		1
Total energy-related derivative gains (losses)^(*)		$	(4	)	$	(1	)		$	7	$	18

(*) Fair value gains and losses included in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $6 million as of December 31, 2017 and $8 million as of December 31, 2016.

Pre-tax effects on the statements of income

For all periods presented, the pre-tax effect of energy-related derivatives and interest rate derivatives designated as cash flow hedging instruments recognized in OCI and those reclassified from accumulated OCI into earnings were as follows:



	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)				Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Successor				Successor
Derivatives in Cash Flow Hedging Relationships	2017			Statements of Income Location	2017
	(in millions)				(in millions)
Energy-related derivatives	$	(9	)	Cost of natural gas	$	(2	)



	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Successor			Predecessor				Successor			Predecessor
Derivatives in Cash Flow Hedging Relationships	July 1, 2016 through December 31, 2016			January 1, 2016 through June 30, 2016			Statements of Income Location	July 1, 2016 through December 31, 2016			January 1, 2016 through June 30, 2016
	(in millions)			(in millions)				(in millions)			(in millions)
Energy-related derivatives	$	2		$	—		Cost of natural gas	$	(1	)	$	(1	)
Interest rate derivatives	(5		)	(64		)	Interest expense, net of amounts capitalized	—			—
Total derivatives in cash flow hedging relationships	$	(3	)	$	(64	)		$	(1	)	$	(1	)



	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Predecessor			Predecessor
Derivatives in Cash Flow Hedging Relationships	2015		Statements of Income Location	2015
	(in millions)			(in millions)
Energy-related derivatives	$	3	Cost of natural gas	$	(10	)
			Other operations and maintenance	(1		)
Interest rate derivatives	—		Interest expense, net of amounts capitalized	2
Total derivatives in cash flow hedging relationships	$	3		$	(9	)

Pre-tax effect of interest rate and energy related derivatives

For all periods presented, the pre-tax effects of energy-related derivatives not designated as hedging instruments on the statements of income were as follows:



		Gain (Loss)
		Successor					Predecessor
Derivatives in Non-Designated Hedging Relationships	Statements of Income Location	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)
Energy-related derivatives	Natural gas revenues^(*)	$	(80	)	$	33	$	(1	)	$	56
	Cost of natural gas	(2		)	3		(62		)	(6		)
Total derivatives in non-designated hedging relationships		$	(82	)	$	36	$	(63	)	$	50


(*)	Excludes the impact of weather derivatives recorded in natural gas revenues of $23 million for the successor year ended December 31, 2017, $6 million for the successor period of July 1, 2016 through December 31, 2016, $3 million for the predecessor period of January 1, 2016 through June 30, 2016, and $12 million for the predecessor year ended December 31, 2015.