On January 1, 2019, Southern Company completed the sale of all of the capital stock of Gulf Power to 700 Universe, LLC, a wholly-owned subsidiary of NextEra Energy, for an aggregate cash purchase price of approximately $5.8 billion (less $1.3 billion of indebtedness assumed), subject to customary working capital adjustments. The preliminary gain associated with the sale of Gulf Power totaled $2.5 billion pre-tax ($1.3 billion after tax). The assets and liabilities of Gulf Power were classified as assets held for sale and liabilities held for sale on Southern Company's balance sheet as of December 31, 2018.

On July 22, 2019, PowerSecure completed the sale of its utility infrastructure services business unit for approximately $71 million, subject to customary working capital adjustments. The related assets and liabilities were classified as held for sale on Southern Company's balance sheet as of June 30, 2019. In contemplation of this sale, a goodwill impairment charge of $32 million was recorded in the second quarter 2019.

During the six months ended June 30, 2019, Southern Power completed construction of and placed in service the 385-MW Plant Mankato expansion and continued construction of two other projects as described in the table below. Total aggregate construction costs, excluding acquisition costs, are expected to be between $405 million and $450 million for the Wildhorse Mountain and Reading facilities. At June 30, 2019, total costs of construction incurred for these projects were $186 million and are included in CWIP. The ultimate outcome of these matters cannot be determined at this time.



Project Facility	Resource	Approximate Nameplate Capacity (MW)	Location	Actual/Expected COD	PPA Contract Period
Projects Completed During the Six Months Ended June 30, 2019
Mankato expansion^(a)	Natural Gas	385	Mankato, MN	May 2019	20 years
Projects Under Construction as of June 30, 2019
Wildhorse Mountain^(b)	Wind	100	Pushmataha County, OK	Fourth quarter 2019	20 years
Reading^(c)	Wind	200	Osage and Lyon Counties, KS	Second quarter 2020	12 years

Southern Power continues to evaluate and refine the deployment of wind turbine equipment purchased in 2016 and 2017 to potential joint development and construction projects as well as the amount of MW capacity to be

On June 14, 2019, Southern Power entered into an agreement with Bloom Energy to acquire a majority interest in its affiliate DSGP, which owns and operates fuel cell generation facilities in Delaware, for a total amount not to exceed $173 million. In June 2019, Southern Power, through an affiliate, contributed a total of $116 million in exchange for Class B membership interests in DSGP, with the remainder expected to be contributed by the end of 2019. FERC approval of the transfer of the facilities is expected to occur in the third quarter 2019; however, the ultimate outcome of this matter cannot be determined at this time.

On June 13, 2019, Southern Power completed the sale of its equity interests in Nacogdoches Power, LLC, the owner of an approximately 115-MW biomass facility located in Nacogdoches County, Texas, to Austin Energy, for an aggregate cash purchase price of approximately $461 million, including working capital adjustments. This sale resulted in an $88 million after-tax gain.

On May 4, 2019, Southern Power achieved commercial operation of the 385-MW natural gas expansion unit at Plant Mankato and started providing energy under a PPA with Northern States Power on June 1, 2019. The sale of Plant Mankato to Northern States Power remains subject to Minnesota and North Dakota state commission approvals and is expected to close in fall 2019. If these state commission approvals are not obtained by October 1, 2019, either party has the option to terminate the sale, which, if elected, would result in the payment of a $15 million termination fee by Northern States Power to Southern Power. The ultimate outcome of this matter cannot be determined at this time. The assets and liabilities of Plant Mankato are classified as assets held for sale and liabilities held for sale on Southern Company's and Southern Power's balance sheets as of June 30, 2019 and December 31, 2018. See "Assets Held for Sale" herein for additional information.

As discussed above, Southern Company and Southern Power each have assets and liabilities held for sale on their balance sheets at June 30, 2019 and December 31, 2018. Assets and liabilities held for sale have been classified separately on each company's balance sheet at the lower of carrying value or fair value less costs to sell at the time the criteria for held-for-sale classification were met. For assets and liabilities held for sale recorded at fair value on a nonrecurring basis, the fair value of assets held for sale is based primarily on unobservable inputs (Level 3), which includes the agreed upon sales prices in executed sales agreements.

Upon classification as held for sale in November 2018 and April 2019 for Plant Mankato and Plant Nacogdoches, respectively, Southern Power ceased recognizing depreciation and amortization on the long-lived assets to be sold.



	Southern Company		Southern Power
	(in millions)
At June 30, 2019
Assets Held for Sale:
Current assets	$	58	$	10
Total property, plant, and equipment	588		559
Goodwill and other intangible assets	51		40
Other non-current assets	46		—
Total Assets Held for Sale	$	743	$	609

Liabilities Held for Sale:
Current liabilities	$	36	$	10
Other non-current liabilities	39		—
Total Liabilities Held for Sale	$	75	$	10

At December 31, 2018
Assets Held for Sale:
Current assets	$	393	$	8
Total property, plant, and equipment	4,583		536
Other intangible assets	40		40
Other non-current assets	727		—
Total Assets Held for Sale	$	5,743	$	584

Liabilities Held for Sale:
Current liabilities	$	425	$	15
Long-term debt	1,286		—
Accumulated deferred income taxes	618		—
Other non-current liabilities	932		—
Total Liabilities Held for Sale	$	3,261	$	15

Southern Company and Southern Power each concluded that the sale of their assets, both individually and combined, did not represent a strategic shift in operations that has, or is expected to have, a major effect on its operations and financial results; therefore, none of the assets related to the sales have been classified as discontinued operations for any of the periods presented.

Gulf Power and Southern Power's equity interests in Plant Oleander and Plant Stanton Unit A (together, the Florida Plants) and Plant Nacogdoches represented individually significant components of Southern Company and Southern Power, respectively; therefore, pre-tax profit for these components for the three and six months ended June 30, 2019 and 2018 is presented below:



	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2019		2018		2019		2018
	(in millions)
Earnings before income taxes:
Gulf Power	$	—	$	31	$	—	$	87
Southern Power's Florida Plants	$	—	$	14	$	—	$	24
Southern Power's Plant Nacogdoches^(*)	$	9	$	7	$	16	$	13

Earnings before income taxes for Plant Nacogdoches for the three and six months ended June 30, 2019 represents the beginning of the corresponding period through June 13, 2019 (the divestiture date).