FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2020, 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 June 30, 2020:	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)	$	388	$	181	$	143	$	—	$	712
Interest rate derivatives	—		23		—		—		23
Investments in trusts:^(b)(c)
Domestic equity	703		128		—		—		831
Foreign equity	65		202		—		—		267
U.S. Treasury and government agency securities	—		268		—		—		268
Municipal bonds	—		106		—		—		106
Pooled funds – fixed income	—		16		—		—		16
Corporate bonds	19		369		—		—		388
Mortgage and asset backed securities	—		75		—		—		75
Private equity	—		—		—		61		61
Other	26		3		—		—		29
Cash equivalents	1,315		13		—		—		1,328
Other investments	9		21		—		—		30
Total	$	2,525	$	1,405	$	143	$	61	$	4,134
Liabilities:
Energy-related derivatives^(a)	$	468	$	187	$	63	$	—	$	718
Interest rate derivatives	—		23		—		—		23
Foreign currency derivatives	—		49		—		—		49
Contingent consideration	—		—		19		—		19
Total	$	468	$	259	$	82	$	—	$	809



	Fair Value Measurements Using:
As of June 30, 2020:	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	$	—	$	11	$	—	$	—	$	11
Nuclear decommissioning trusts:^(b)
Domestic equity	442		117		—		—		559
Foreign equity	65		59		—		—		124
U.S. Treasury and government agency securities	—		22		—		—		22
Municipal bonds	—		1		—		—		1
Corporate bonds	19		155		—		—		174
Mortgage and asset backed securities	—		28		—		—		28
Private equity	—		—		—		61		61
Other	8		—		—		—		8
Cash equivalents	692		13		—		—		705
Other investments	—		21		—		—		21
Total	$	1,226	$	427	$	—	$	61	$	1,714
Liabilities:
Energy-related derivatives	$	—	$	19	$	—	$	—	$	19

Georgia Power
Assets:
Energy-related derivatives	$	—	$	10	$	—	$	—	$	10
Nuclear decommissioning trusts:^(b)(c)
Domestic equity	261		1		—		—		262
Foreign equity	—		141		—		—		141
U.S. Treasury and government agency securities	—		246		—		—		246
Municipal bonds	—		105		—		—		105
Corporate bonds	—		214		—		—		214
Mortgage and asset backed securities	—		47		—		—		47
Other	18		3		—		—		21
Cash equivalents	349		—		—		—		349
Total	$	628	$	767	$	—	$	—	$	1,395
Liabilities:
Energy-related derivatives	$	—	$	40	$	—	$	—	$	40



	Fair Value Measurements Using:
As of June 30, 2020:	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	$	—	$	6	$	—	$	—	$	6
Liabilities:
Energy-related derivatives	$	—	$	22	$	—	$	—	$	22

Southern Power
Assets:
Energy-related derivatives	$	—	$	2	$	—	$	—	$	2
Liabilities:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Foreign currency derivatives	—		49		—		—		49
Contingent consideration	—		—		19		—		19
Total	$	—	$	52	$	19	$	—	$	71

Southern Company Gas
Assets:
Energy-related derivatives^(a)	$	388	$	152	$	143	$	—	$	683
Non-qualified deferred compensation trusts:
Domestic equity	—		10		—		—		10
Foreign equity	—		2		—		—		2
Pooled funds – fixed income	—		16		—		—		16
Cash equivalents and restricted cash	40		—		—		—		40
Total	$	428	$	180	$	143	$	—	$	751
Liabilities:
Energy-related derivatives^(a)	$	468	$	103	$	63	$	—	$	634
Interest rate derivatives	—		23		—		—		23
Total	$	468	$	126	$	63	$	—	$	657


(a)	Energy-related derivatives exclude cash collateral of $114 million.


(b)	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.

(c)

Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. As of June 30, 2020, approximately $45 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 (decreased) by the amounts shown in the table below for the three and six months ended June 30, 2020 and 2019. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.



Fair value increases (decreases)	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019		Six Months Ended June 30, 2020			Six Months Ended June 30, 2019
	(in millions)
Southern Company	$	223	$	75	$	(23	)	$	227
Alabama Power	124		38		(42		)	125
Georgia Power	99		37		19			102

Financial Instruments for Which Carrying Amount Did Not Equal Fair Value

As of June 30, 2020, 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	$	46,513	$	8,519	$	12,720	$	1,404	$	4,097	$	5,827
Fair value	53,079		10,008		15,092		1,571		4,423		6,817

(*)

The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the 2016 merger with Southern Company. 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 June 30, 2020			Six Months Ended June 30, 2020
	(in millions)
Beginning balance	$	76		$	14
Transfers to Level 3	—			70
Transfers from Level 3	—			(3		)
Instruments realized or otherwise settled during period	(6		)	(7		)
Changes in fair value	10			6
Ending balance	$	80		$	80