Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of March 31, 2019, 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 March 31, 2019:	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)	$	322	$	128	$	4	$	—	$	454
Foreign currency derivatives	—		38		—		—		38
Investments in trusts:^(c)(d)
Domestic equity	682		120		—		—		802
Foreign equity	60		195		—		—		255
U.S. Treasury and government agency securities	—		283		—		—		283
Municipal bonds	—		73		—		—		73
Pooled funds – fixed income	—		14		—		—		14
Corporate bonds	24		298		—		—		322
Mortgage and asset backed securities	—		72		—		—		72
Private equity	—		—		—		48		48
Cash and cash equivalents	1		—		—		—		1
Other	28		4		—		—		32
Cash equivalents	907		3		—		—		910
Other investments	9		14		—		—		23
Total	$	2,033	$	1,242	$	4	$	48	$	3,327
Liabilities:
Energy-related derivatives^(a)(b)	$	466	$	106	$	23	$	—	$	595
Interest rate derivatives	—		35		—		—		35
Foreign currency derivatives	—		24		—		—		24
Contingent consideration	—		—		21		—		21
Total	$	466	$	165	$	44	$	—	$	675



	Fair Value Measurements Using:
As of March 31, 2019:	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	$	—	$	6	$	—	$	—	$	6
Nuclear decommissioning trusts:^(c)
Domestic equity	446		108		—		—		554
Foreign equity	60		57		—		—		117
U.S. Treasury and government agency securities	—		18		—		—		18
Municipal bonds	—		1		—		—		1
Corporate bonds	24		139		—		—		163
Mortgage and asset backed securities	—		24		—		—		24
Private equity	—		—		—		48		48
Other	5		—		—		—		5
Cash equivalents	569		3		—		—		572
Other investments	—		14		—		—		14
Total	$	1,104	$	370	$	—	$	48	$	1,522
Liabilities:
Energy-related derivatives	$	—	$	7	$	—	$	—	$	7

Georgia Power
Assets:
Energy-related derivatives	$	—	$	9	$	—	$	—	$	9
Nuclear decommissioning trusts:^(c)(d)
Domestic equity	236		1		—		—		237
Foreign equity	—		134		—		—		134
U.S. Treasury and government agency securities	—		265		—		—		265
Municipal bonds	—		72		—		—		72
Corporate bonds	—		160		—		—		160
Mortgage and asset backed securities	—		47		—		—		47
Other	23		4		—		—		27
Total	$	259	$	692	$	—	$	—	$	951
Liabilities:
Energy-related derivatives	$	—	$	16	$	—	$	—	$	16
Interest rate derivatives	—		2		—		—		2
Total	$	—	$	18	$	—	$	—	$	18



	Fair Value Measurements Using:
As of March 31, 2019:	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	202		—		—		—		202
Total	$	202	$	3	$	—	$	—	$	205
Liabilities:
Energy-related derivatives	$	—	$	6	$	—	$	—	$	6

Southern Power
Assets:
Energy-related derivatives	$	—	$	1	$	—	$	—	$	1
Foreign currency derivatives	—		38		—		—		38
Cash equivalents	10		—		—		—		10
Total	$	10	$	39	$	—	$	—	$	49
Liabilities:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Foreign currency derivatives	—		24		—		—		24
Contingent consideration	—		—		21		—		21
Total	$	—	$	27	$	21	$	—	$	48

Southern Company Gas
Assets:
Energy-related derivatives^(a)(b)	$	322	$	108	$	4	$	—	$	434
Non-qualified deferred compensation trusts:
Domestic equity	—		11		—		—		11
Foreign equity	—		4		—		—		4
Pooled funds – fixed income	—		14		—		—		14
Cash equivalents	1		—		—		—		1
Cash equivalents	13		—		—		—		13
Total	$	336	$	137	$	4	$	—	$	477
Liabilities:
Energy-related derivatives^(a)(b)	$	466	$	73	$	23	$	—	$	562


(a)	Energy-related derivatives exclude $11 million associated with premiums and certain weather derivatives accounted for based on intrinsic value rather than fair value.


(b)	Energy-related derivatives exclude cash collateral of $190 million.


(c)	Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

(d)

Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. As of March 31, 2019, approximately $72 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. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

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 months ended March 31, 2019 and decreased for the three months ended March 31, 2018 by the amounts shown in the table below. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.



	Three Months Ended March 31, 2019		Three Months Ended March 31, 2018
	(in millions)
Southern Company	$	152	$	(11	)
Alabama Power	87		(5		)
Georgia Power	65		(6		)

Financial Instruments for Which Carrying Amount Did Not Equal Fair Value

As of March 31, 2019, other financial instruments for which the carrying amount did not equal fair value were as follows:



	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas^(*)
	(in millions)
Long-term debt, including securities due within one year:
Carrying amount	$	42,535	$	7,921	$	10,910	$	1,619	$	4,995	$	5,928
Fair value	43,910		8,424		11,249		1,619		5,131		6,176


(*)	The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the Merger. Southern Company Gas amortizes the fair value adjustments over the lives of the respective bonds.

Fair Value of Commodity Derivative Contracts that Include a Significant Unobservable Component

The following table includes transfers to Level 3, which represent the fair value of Southern Company Gas' commodity derivative contracts that include a significant unobservable component for the first time during the period.



	Three Months Ended March 31, 2019
	(in millions)
Beginning balance	$	—
Transfers to Level 3	(30		)
Changes in fair value	11
Ending balance	$	(19	)