Leases (Tables)

3 Months Ended

Mar. 31, 2019

The major categories of lease obligations are as follows:



	As of March 31, 2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Electric generating units	$	1,094	$	159	$	1,606	$	—	$	—	$	—
Real estate/land	803		3		63		2		393		83
Communication towers	131		1		3		—		—		—
Railcars	55		25		26		3		—		—
Other	153		10		16		3		—		1
Total	$	2,236	$	198	$	1,714	$	8	$	393	$	84

Balance Sheet Amounts Recorded for Operating and Financing Leases

Balance sheet amounts recorded for operating and finance leases are as follows:



	As of March 31, 2019
	Southern Company^(*)		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Operating Leases
Operating lease ROU assets, net	$	1,926	$	160	$	1,519	$	8	$	372	$	86

Operating lease obligations - current	$	239	$	47	$	139	$	3	$	22	$	13
Operating lease obligations - non current	1,752		147		1,404		5		371		71
Total operating lease obligations	$	1,991	$	194	$	1,543	$	8	$	393	$	84

Finance Leases
Finance lease ROU assets, net	$	242	$	4	$	145	$	—	$	—	$	—

Finance lease obligations - current	$	38	$	1	$	10	$	—	$	—	$	—
Finance lease obligations - noncurrent	207		3		161		—		—		—
Total finance lease obligations	$	245	$	4	$	171	$	—	$	—	$	—


(*)	Includes operating lease ROU assets, net and operating lease obligations classified as held for sale.

Lease Costs and Other Information

Lease costs for the three months ended March 31, 2019, which includes both amounts recognized as operations and maintenance expense and amounts capitalized as part of the cost of another asset, are as follows:



	For the Three Months Ended March 31, 2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Lease cost
Operating lease cost	$	69	$	7	$	49	$	1	$	7	$	4
Finance lease cost:
Amortization of ROU assets	7		—		4		—		—		—
Interest on lease obligations	3		—		4		—		—		—
Total finance lease cost	10		—		8		—		—		—
Short-term lease costs	14		5		3		—		—		—
Variable lease cost	19		—		16		—		1		—
Sublease income	—		—		—		—		—		—
Total lease cost	$	112	$	12	$	76	$	1	$	8	$	4

Georgia Power has variable lease payments that are based on the amount of energy produced by certain renewable generating facilities subject to PPAs.

Other information with respect to cash and noncash activities related to leases, as well as weighted-average lease terms and discount rates, is as follows:



	For the Three Months Ended March 31, 2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases	$	74	$	13	$	32	$	1	$	7	$	4
Operating cash flows from finance leases	6		—		13		—		—		—
Financing cash flows from finance leases	8		—		2		—		—		—
ROU assets obtained in exchange for new operating lease obligations	15		2		4		—		—		—
ROU assets obtained in exchange for new finance lease obligations	29		—		28		—		—		—



	As of March 31, 2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
Weighted-average remaining lease term in years:
Operating leases	13.5		3.8		10.1		6.8		33.7		9.0
Finance leases	18.5		14.8		11.3		—		—		—
Weighted-average discount rate:
Operating leases	4.49	%	3.33	%	4.42	%	4.03	%	5.68	%	3.70	%
Finance leases	5.00	%	3.75	%	10.68	%	—	%	—	%	—	%

Maturities of Operating Lease Liabilities

Maturities of lease liabilities are as follows:



	As of March 31, 2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Maturity Analysis
Operating leases:
2019 (remaining)	$	253	$	46	$	182	$	2	$	17	$	12
2020	291		53		202		2		22		16
2021	274		52		197		1		23		16
2022	263		52		195		1		23		12
2023	198		3		196		1		24		10
Thereafter	1,637		1		984		2		848		36
Total	2,916		207		1,956		9		957		102
Less: Present value discount	925		13		413		1		564		18
Operating lease obligations	$	1,991	$	194	$	1,543	$	8	$	393	$	84
Finance leases:
2019 (remaining)	$	24	$	1	$	22	$	—	$	—	$	—
2020	32		1		28		—		—		—
2021	26		1		25		—		—		—
2022	22		1		25		—		—		—
2023	18		1		25		—		—		—
Thereafter	273		—		165		—		—		—
Total	395		5		290		—		—		—
Less: Present value discount	150		1		119		—		—		—
Finance lease obligations	$	245	$	4	$	171	$	—	$	—	$	—

Maturities of Finance Lease Liabilities

Maturities of lease liabilities are as follows:



	As of March 31, 2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Maturity Analysis
Operating leases:
2019 (remaining)	$	253	$	46	$	182	$	2	$	17	$	12
2020	291		53		202		2		22		16
2021	274		52		197		1		23		16
2022	263		52		195		1		23		12
2023	198		3		196		1		24		10
Thereafter	1,637		1		984		2		848		36
Total	2,916		207		1,956		9		957		102
Less: Present value discount	925		13		413		1		564		18
Operating lease obligations	$	1,991	$	194	$	1,543	$	8	$	393	$	84
Finance leases:
2019 (remaining)	$	24	$	1	$	22	$	—	$	—	$	—
2020	32		1		28		—		—		—
2021	26		1		25		—		—		—
2022	22		1		25		—		—		—
2023	18		1		25		—		—		—
Thereafter	273		—		165		—		—		—
Total	395		5		290		—		—		—
Less: Present value discount	150		1		119		—		—		—
Finance lease obligations	$	245	$	4	$	171	$	—	$	—	$	—

Lease Income, Sales-type Leases

Lease income for the three months ended March 31, 2019 is as follows:



	For the Three Months Ended March 31, 2019
	Southern Company		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Lease income - interest income on sales-type leases	$	2	$	—	$	2	$	—	$	—
Lease income - operating leases	71		19		—		41		9
Variable lease income	66		—		—		72		—
Total lease income	$	139	$	19	$	2	$	113	$	9

Lease Income, Operating Leases

Lease income for the three months ended March 31, 2019 is as follows:



	For the Three Months Ended March 31, 2019
	Southern Company		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Lease income - interest income on sales-type leases	$	2	$	—	$	2	$	—	$	—
Lease income - operating leases	71		19		—		41		9
Variable lease income	66		—		—		72		—
Total lease income	$	139	$	19	$	2	$	113	$	9

Undiscounted Cash Flows to be Received Under Tolling Arrangements Accounted for as Sales-type Leases

The undiscounted cash flows to be received under tolling arrangements accounted for as sales-type leases are as follows:



	As of March 31, 2019
	Southern Company		Mississippi Power
	(in millions)
2019 (remaining)	$	11	$	11
2020	14		14
2021	14		14
2022	13		13
2023	12		12
Thereafter	135		135
Total undiscounted cash flows	$	199	$	199
Lease receivable	108		108
Difference between undiscounted cash flows and discounted cash flows	$	91	$	91

Undiscounted Cash Flows to be Received Under PPAs Accounted for as Operating Leases

The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases (adjusted for intercompany eliminations) are as follows:



	As of March 31, 2019
	Southern Company		Georgia Power		Southern Power		Southern Company Gas
	(in millions)
2019 (remaining)	$	163	$	20	$	123	$	26
2020	188		26		128		34
2021	183		18		131		34
2022	174		8		134		34
2023	171		2		137		34
Thereafter	1,809		—		1,017		498
Total	$	2,688	$	74	$	1,670	$	660