REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME

REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME

Revenue from Contracts with Customers

The Registrants generate revenues from a variety of sources, some of which are not accounted for as revenue from contracts with customers, such as leases, derivatives, and certain cost recovery mechanisms. See Note 1 to the financial statements under "Revenues" in Item 8 of the Form 10-K for additional information on the revenue policies of the Registrants. See "Lease Income" herein and Note (J) for additional information on revenue accounted for under lease and derivative accounting guidance, respectively.

The following table disaggregates revenue from contracts with customers for the three and six months ended June 30, 2020 and 2019:

	Southern Company			Alabama Power		Georgia Power			Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Three Months Ended June 30, 2020
Operating revenues
Retail electric revenues
Residential	$	1,430		$	549	$	817		$	64	$	—	$	—
Commercial	1,103			353		689			61		—		—
Industrial	642			302		273			67		—		—
Other	23			6		15			2		—		—
Total retail electric revenues	3,198			1,210		1,794			194		—		—
Natural gas distribution revenues
Residential	239			—		—			—		—		239
Commercial	58			—		—			—		—		58
Transportation	234			—		—			—		—		234
Industrial	5			—		—			—		—		5
Other	49			—		—			—		—		49
Total natural gas distribution revenues	585			—		—			—		—		585
Wholesale electric revenues
PPA energy revenues	167			28		7			2		134		—
PPA capacity revenues	108			25		13			1		71		—
Non-PPA revenues	50			5		2			73		59		—
Total wholesale electric revenues	325			58		22			76		264		—
Other natural gas revenues
Wholesale gas services	341			—		—			—		—		341
Gas marketing services	57			—		—			—		—		57
Other natural gas revenues	8			—		—			—		—		8
Total natural gas revenues	406			—		—			—		—		406
Other revenues	251			44		119			6		4		—
Total revenue from contracts with customers	4,765			1,312		1,935			276		268		991
Other revenue sources(a)	728			53		(7		)	7		171		518
Other adjustments(b)	(873		)	—		—			—		—		(873		)
Total operating revenues	$	4,620		$	1,365	$	1,928		$	283	$	439	$	636

	Southern Company			Alabama Power		Georgia Power			Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Six Months Ended June 30, 2020
Operating revenues
Retail electric revenues
Residential	$	2,801		$	1,103	$	1,577		$	121	$	—	$	—
Commercial	2,247			717		1,409			121		—		—
Industrial	1,323			623		555			145		—		—
Other	46			11		31			4		—		—
Total retail electric revenues	6,417			2,454		3,572			391		—		—
Natural gas distribution revenues
Residential	736			—		—			—		—		736
Commercial	188			—		—			—		—		188
Transportation	499			—		—			—		—		499
Industrial	17			—		—			—		—		17
Other	144			—		—			—		—		144
Total natural gas distribution revenues	1,584			—		—			—		—		1,584
Wholesale electric revenues
PPA energy revenues	326			55		15			4		259		—
PPA capacity revenues	213			52		25			2		136		—
Non-PPA revenues	100			24		4			142		117		—
Total wholesale electric revenues	639			131		44			148		512		—
Other natural gas revenues
Wholesale gas services	737			—		—			—		—		737
Gas marketing services	220			—		—			—		—		220
Other natural gas revenues	15			—		—			—		—		15
Total natural gas revenues	972			—		—			—		—		972
Other revenues	441			78		214			13		7		—
Total revenue from contracts with customers	10,053			2,663		3,830			552		519		2,556
Other revenue sources(a)	1,599			53		(76		)	7		295		1,343
Other adjustments(b)	(2,014		)	—		—			—		—		(2,014		)
Total operating revenues	$	9,638		$	2,716	$	3,754		$	559	$	814	$	1,885

	Southern Company			Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Three Months Ended June 30, 2019
Operating revenues
Retail electric revenues
Residential	$	1,491		$	592	$	831	$	68	$	—	$	—
Commercial	1,264			422		770		72		—		—
Industrial	766			369		327		70		—		—
Other	25			7		15		3		—		—
Total retail electric revenues	3,546			1,390		1,943		213		—		—
Natural gas distribution revenues
Residential	229			—		—		—		—		229
Commercial	65			—		—		—		—		65
Transportation	213			—		—		—		—		213
Industrial	5			—		—		—		—		5
Other	45			—		—		—		—		45
Total natural gas distribution revenues	557			—		—		—		—		557
Wholesale electric revenues
PPA energy revenues	208			35		17		3		163		—
PPA capacity revenues	109			25		13		1		81		—
Non-PPA revenues	53			3		1		89		68		—
Total wholesale electric revenues	370			63		31		93		312		—
Other natural gas revenues
Wholesale gas services	444			—		—		—		—		444
Gas marketing services	55			—		—		—		—		55
Other natural gas revenues	12			—		—		—		—		12
Total natural gas revenues	511			—		—		—		—		511
Other revenues	238			37		95		4		3		—
Total revenue from contracts with customers	5,222			1,490		2,069		310		315		1,068
Other revenue sources(a)	1,050			23		48		3		195		795
Other adjustments(b)	(1,174		)	—		—		—		—		(1,174		)
Total operating revenues	$	5,098		$	1,513	$	2,117	$	313	$	510	$	689

	Southern Company			Alabama Power			Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Six Months Ended June 30, 2019
Operating revenues
Retail electric revenues
Residential	$	2,818		$	1,151		$	1,539	$	128	$	—	$	—
Commercial	2,390			790			1,463		137		—		—
Industrial	1,474			707			623		144		—		—
Other	44			13			25		6		—		—
Total retail electric revenues	6,726			2,661			3,650		415		—		—
Natural gas distribution revenues
Residential	830			—			—		—		—		830
Commercial	235			—			—		—		—		235
Transportation	469			—			—		—		—		469
Industrial	22			—			—		—		—		22
Other	161			—			—		—		—		161
Total natural gas distribution revenues	1,717			—			—		—		—		1,717
Wholesale electric revenues
PPA energy revenues	398			67			28		5		314		—
PPA capacity revenues	217			52			27		2		163		—
Non-PPA revenues	108			62			3		164		109		—
Total wholesale electric revenues	723			181			58		171		586		—
Other natural gas revenues
Wholesale gas services	1,165			—			—		—		—		1,165
Gas marketing services	276			—			—		—		—		276
Other natural gas revenues	22			—			—		—		—		22
Total natural gas revenues	1,463			—			—		—		—		1,463
Other revenues	502			83			186		10		6		—
Total revenue from contracts with customers	11,131			2,925			3,894		596		592		3,180
Other revenue sources(a)	2,413			(4		)	57		4		361		2,017
Other adjustments(b)	(3,034		)	—			—		—		—		(3,034		)
Total operating revenues	$	10,510		$	2,921		$	3,951	$	600	$	953	$	2,163

(a) Other revenue sources primarily relate to revenues from customers accounted for as derivatives and leases, as well as alternative revenue programs at Southern Company Gas and other cost recovery mechanisms at the traditional electric operating companies.

(b)

Other adjustments relate to the cost of Southern Company Gas' energy and risk management activities. Wholesale gas services revenues are presented net of the related costs of those activities on the statement of income. See Note (L) under "Southern Company Gas" for additional information on the components of wholesale gas services' operating revenues.

Contract Balances

The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at June 30, 2020 and December 31, 2019:

	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Accounts Receivables
As of June 30, 2020	$	2,283	$	592	$	796	$	84	$	115	$	523
As of December 31, 2019	2,413		586		688		79		97		749
Contract Assets
As of June 30, 2020	$	103	$	—	$	54	$	1	$	—	$	—
As of December 31, 2019	117		—		69		—		—		—
Contract Liabilities
As of June 30, 2020	$	57	$	6	$	23	$	—	$	1	$	2
As of December 31, 2019	52		10		13		—		1		1

As of June 30, 2020 and December 31, 2019, Georgia Power had contract assets primarily related to unregulated service agreements, where payment is contingent on project completion, and fixed retail customer bill programs, where the payment is contingent upon Georgia Power's continued performance and the customer's continued participation in the program over a one-year contract term. Contract liabilities for Georgia Power relate to cash collections recognized in advance of revenue for certain unregulated service agreements. Alabama Power had contract liabilities for outstanding performance obligations primarily related to extended service agreements. Southern Company's unregulated distributed generation business had $41 million and $40 million of contract assets and $26 million and $28 million of contract liabilities at June 30, 2020 and December 31, 2019, respectively, for outstanding performance obligations.

Revenues recognized by Southern Company in the three and six months ended June 30, 2020, which were included in contract liabilities at December 31, 2019, were $11 million and $21 million, respectively, and immaterial for all other applicable Registrants.

Remaining Performance Obligations

The traditional electric operating companies and Southern Power have long-term contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. These contracts primarily relate to PPAs whereby the traditional electric operating companies and Southern Power provide electricity and generation capacity to a customer. The revenue recognized for the delivery of electricity is variable; however, certain PPAs include a fixed payment for fixed generation capacity over the term of the contract. Southern Company's unregulated distributed generation business also has partially satisfied performance obligations related to certain fixed price contracts. Revenue from contracts with customers related to these performance obligations remaining at June 30, 2020 are expected to be recognized as follows:

	2020 (remaining)		2021		2022		2023		2024		2025 and Thereafter
	(in millions)
Southern Company	$	319	$	432	$	362	$	339	$	319	$	3,062
Alabama Power	12		33		31		24		7		5
Georgia Power	37		70		39		34		23		62
Southern Power	156		290		292		282		290		3,013

Revenue expected to be recognized for performance obligations remaining at June 30, 2020 was immaterial for Mississippi Power.

Lease Income

Lease income for the three and six months ended June 30, 2020 and 2019 is as follows:

	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
For the Three Months Ended June 30, 2020
Lease income - interest income on sales-type leases	$	3	$	—	$	—	$	3	$	—	$	—
Lease income - operating leases	47		6		15		—		21		9
Variable lease income	126		—		—		—		136		—
Total lease income	$	176	$	6	$	15	$	3	$	157	$	9
For the Six Months Ended June 30, 2020
Lease income - interest income on sales-type leases	$	6	$	—	$	—	$	5	$	—	$	—
Lease income - operating leases	97		13		30		—		45		17
Variable lease income	200		—		—		—		215		—
Total lease income	$	303	$	13	$	30	$	5	$	260	$	17
For the Three Months Ended June 30, 2019
Lease income - interest income on sales-type leases	$	2	$	—	$	—	$	2	$	—	$	—
Lease income - operating leases	67		7		19		—		44		9
Variable lease income	115		—		—		—		129		—
Total lease income	$	184	$	7	$	19	$	2	$	173	$	9
For the Six Months Ended June 30, 2019
Lease income - interest income on sales-type leases	$	5	$	—	$	—	$	5	$	—	$	—
Lease income - operating leases	139		13		39		—		90		17
Variable lease income	182		—		—		—		204		—
Total lease income	$	326	$	13	$	39	$	5	$	294	$	17

Lease income for Southern Power is included in wholesale revenues. Lease payments received under tolling arrangements and PPAs consist of either scheduled payments or variable payments based on the amount of energy produced by the underlying electric generating units.