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Retirement Benefits
6 Months Ended
Jun. 30, 2018
Retirement Benefits [Abstract]  
RETIREMENT BENEFITS
RETIREMENT BENEFITS
On January 1, 2018, the qualified defined benefit pension plan of Southern Company Gas was merged into the qualified defined benefit pension plan of Southern Company. Following the plan merger, Southern Company has a qualified defined benefit, trusteed, pension plan covering substantially all employees, with the exception of employees at PowerSecure. The Southern Company qualified defined benefit pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No mandatory contributions to the Southern Company qualified defined benefit pension plan are anticipated for the year ending December 31, 2018.
In addition, the Southern Company Gas non-qualified retirement plans were merged into the Southern Company non-qualified retirement plan (defined benefit and defined contribution). Following the non-qualified retirement plan mergers, Southern Company continues to provide certain non-qualified defined benefits for a select group of management and highly compensated employees, which are funded on a cash basis.
Furthermore, Southern Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional electric operating companies fund related other postretirement trusts to the extent required by their respective regulatory commissions. Southern Company Gas also provides certain medical care and life insurance benefits for eligible retired employees through a postretirement benefit plan. Southern Company Gas has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses.
As indicated in Note (A), the registrants adopted ASU 2017-07 as of January 1, 2018. ASU 2017-07 requires that an employer report the service cost component of net periodic benefit costs in the same line item or items as other compensation costs and requires the other components of net periodic benefit costs to be separately presented in the statements of income outside of income from operations. The presentation requirements of ASU 2017-07 have been applied retrospectively with the service cost component of net periodic benefit costs included in operations and maintenance and all other components of net periodic benefit costs included in other income (expense), net in the statements of income for the three and six months ended June 30, 2017.
With respect to the presentation requirements, the registrants have used the practical expedient provided by ASU 2017-07, which permits an employer to use the amounts disclosed in its retirement benefits footnote for prior comparative periods as the estimation basis for applying the retrospective presentation requirements to those periods. The amounts of the other components of net periodic benefit costs reclassified for the prior period are presented in the following tables.
See Note 2 to the financial statements of each registrant in Item 8 of the Form 10-K for additional information.
Components of the net periodic benefit costs for the three and six months ended June 30, 2018 and 2017 are presented in the following tables.
Three Months Ended June 30, 2018
Southern
Company
 
Alabama
Power
 
Georgia
Power
 
Gulf
Power
 
Mississippi
Power
 
Southern Power
 
Southern Company Gas
 
(in millions)
Pension Plans
Service cost
$
89

 
$
20

 
$
21

 
$
4

 
$
4

 
$
2

 
$
8

Interest cost
116

 
25

 
35

 
5

 
5

 
2

 
9

Expected return on plan assets
(235
)
 
(53
)
 
(74
)
 
(10
)
 
(10
)
 
(2
)
 
(17
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
1

 
1

 
1

 

 

 

 

Regulatory asset

 

 

 

 

 

 
4

Net (gain)/loss
54

 
13

 
17

 
3

 
2

 

 
3

Net periodic pension cost (income)
$
25

 
$
6

 
$

 
$
2

 
$
1

 
$
2

 
$
7

Postretirement Benefits
Service cost
$
6

 
$
2

 
$
1

 
$
1

 
$
1

 
$

 
$

Interest cost
18

 
4

 
7

 

 
1

 

 
3

Expected return on plan assets
(17
)
 
(7
)
 
(7
)
 
(1
)
 
(1
)
 

 
(2
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
1

 
1

 
1

 

 

 

 

Regulatory asset

 

 

 

 

 

 
2

Net (gain)/loss
4

 
1

 
2

 

 

 

 

Net periodic postretirement benefit cost
$
12

 
$
1

 
$
4

 
$

 
$
1

 
$

 
$
3

Six Months Ended June 30, 2018
Southern
Company
 
Alabama
Power
 
Georgia
Power
 
Gulf
Power
 
Mississippi
Power
 
Southern Power
 
Southern Company Gas
 
(in millions)
Pension Plans
Service cost
$
179

 
$
39

 
$
43

 
$
8

 
$
8

 
$
4

 
$
16

Interest cost
232

 
50

 
70

 
10

 
10

 
3

 
19

Expected return on plan assets
(471
)
 
(104
)
 
(148
)
 
(20
)
 
(20
)
 
(5
)
 
(35
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
2

 
1

 
1

 

 

 

 
(1
)
Regulatory asset

 

 

 

 

 

 
7

Net (gain)/loss
107

 
27

 
34

 
5

 
5

 
1

 
6

Net periodic pension cost (income)
$
49

 
$
13

 
$

 
$
3

 
$
3

 
$
3

 
$
12

Postretirement Benefits
Service cost
$
12

 
$
3

 
$
3

 
$
1

 
$
1

 
$

 
$
1

Interest cost
37

 
8

 
14

 
1

 
2

 

 
5

Expected return on plan assets
(34
)
 
(13
)
 
(13
)
 
(1
)
 
(1
)
 

 
(4
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
Regulatory asset
3

 
2

 
1

 

 

 

 
3

Net (gain)/loss
7

 
1

 
4

 

 

 

 

Net periodic postretirement benefit cost
$
25

 
$
1

 
$
9

 
$
1

 
$
2

 
$

 
$
5

Three Months Ended
June 30, 2017(*)
Southern
Company
 
Alabama
Power
 
Georgia
Power
 
Gulf
Power
 
Mississippi
Power
 
Southern Company Gas
 
(in millions)
Pension Plans
Service cost
$
74


$
16


$
18


$
4


$
3


$
5

Interest cost
113


24


35


5


5


10

Expected return on plan assets
(225
)

(49
)

(70
)

(9
)

(10
)

(17
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
3




1




1


(1
)
Net (gain)/loss
41


11


14


1


2


5

Net periodic pension cost (income)
$
6


$
2


$
(2
)

$
1


$
1


$
2

Postretirement Benefits
Service cost
$
6

 
$
2

 
$
1

 
$
1

 
$
1

 
$

Interest cost
20

 
4

 
8

 

 
1

 
2

Expected return on plan assets
(17
)
 
(8
)
 
(6
)
 
(1
)
 
(1
)
 
(1
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
1

 
1

 
1

 

 

 

Net (gain)/loss
5

 
1

 
1

 

 

 
1

Net periodic postretirement benefit cost
$
15

 
$

 
$
5

 
$

 
$
1

 
$
2

(*)
Excludes Southern Power since Southern Power did not participate in the qualified pension and postretirement benefit plans until December 2017.
Six Months Ended
June 30, 2017(*)
Southern
Company
 
Alabama
Power
 
Georgia
Power
 
Gulf
Power
 
Mississippi
Power
 
Southern Company Gas
 
(in millions)
Pension Plans
Service cost
$
147

 
$
32

 
$
37

 
$
7

 
$
7

 
$
11

Interest cost
227

 
48

 
69

 
10

 
10

 
20

Expected return on plan assets
(449
)
 
(98
)
 
(141
)
 
(19
)
 
(20
)
 
(35
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
6

 
1

 
2

 

 
1

 
(1
)
Net (gain)/loss
81

 
21

 
28

 
3

 
4

 
10

Net periodic pension cost (income)
$
12

 
$
4

 
$
(5
)
 
$
1

 
$
2

 
$
5

Postretirement Benefits
Service cost
$
12

 
$
3

 
$
3

 
$
1

 
$
1

 
$
1

Interest cost
40

 
9

 
15

 
1

 
2

 
5

Expected return on plan assets
(33
)
 
(14
)
 
(12
)
 
(1
)
 
(1
)
 
(3
)
Amortization:
 
 
 
 
 
 
 
 
 
 
 
Prior service costs
3

 
2

 
1

 

 

 
(1
)
Net (gain)/loss
7

 
1

 
3

 

 

 
2

Net periodic postretirement benefit cost
$
29

 
$
1

 
$
10

 
$
1

 
$
2

 
$
4

(*)
Excludes Southern Power since Southern Power did not participate in the qualified pension and postretirement benefit plans until December 2017.