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Introduction
 9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Introduction INTRODUCTION
The condensed quarterly financial statements of each Registrant included herein have been prepared by such Registrant, without audit, pursuant to the rules and regulations of the SEC. The Condensed Balance Sheets at December 31, 2020 have been derived from the audited financial statements of each Registrant. In the opinion of each Registrant's management, the information regarding such Registrant furnished herein reflects all adjustments, which, except as otherwise disclosed, are of a normal recurring nature, necessary to present fairly the results of operations for the periods ended September 30, 2021 and 2020. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although each Registrant believes that the disclosures regarding such Registrant are adequate to make the information presented not misleading. Disclosures which would substantially duplicate the disclosures in the Form 10-K and details which have not changed significantly in amount or composition since the filing of the Form 10-K are generally omitted from this Quarterly Report on Form 10-Q unless specifically required by GAAP. Therefore, these Condensed Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K. Due to the seasonal variations in the demand for energy and other factors, including the impacts of the COVID-19 pandemic, operating results for the periods presented are not necessarily indicative of the operating results to be expected for the full year.
Certain prior year data presented in the financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the overall results of operations, financial position, or cash flows of any Registrant.
Goodwill and Other Intangible Assets
Goodwill at September 30, 2021 and December 31, 2020 was as follows:
Goodwill
(in millions)
Southern Company$5,280 
Southern Company Gas:
Gas distribution operations$4,034 
Gas marketing services981 
Southern Company Gas total$5,015 
Goodwill is not amortized but is subject to an annual impairment test in the fourth quarter of the year and on an interim basis as events and changes in circumstances occur.
Other intangible assets were as follows:
At September 30, 2021At December 31, 2020
Gross Carrying AmountAccumulated AmortizationOther
Intangible Assets, Net		Gross Carrying AmountAccumulated AmortizationOther
Intangible Assets, Net
(in millions)(in millions)
Southern Company
Other intangible assets subject to amortization:
Customer relationships$212 $(148)$64 $212 $(135)$77 
Trade names64 (36)28 64 (31)33 
Storage and transportation contracts(*)
— — — 64 (64)— 
PPA fair value adjustments390 (104)286 390 (89)301 
Other10 (8)2 10 (9)1 
Total other intangible assets subject to amortization$676 $(296)$380 $740 $(328)$412 
Other intangible assets not subject to amortization:
Federal Communications Commission licenses75 — 75 75 — 75 
Total other intangible assets$751 $(296)$455 $815 $(328)$487 
Southern Power
Other intangible assets subject to amortization:
PPA fair value adjustments$390 $(104)$286 $390 $(89)$301 
Southern Company Gas
Other intangible assets subject to amortization:
Gas marketing services
Customer relationships$156 $(128)$28 $156 $(119)$37 
Trade names26 (14)12 26 (12)14 
Wholesale gas services
Storage and transportation contracts(*)
— — — 64 (64)— 
Total other intangible assets subject to amortization$182 $(142)$40 $246 $(195)$51 
(*)See Note (K) under "Southern Company Gas" for information regarding the sale of Sequent.
Amortization associated with other intangible assets was as follows:
Three Months EndedNine Months Ended
September 30, 2021
(in millions)
Southern Company(a)
$11 $33 
Southern Power(b)
5 15 
Southern Company Gas(c)
4 11 
(a)Includes $5 million and $15 million for the three and nine months ended September 30, 2021, respectively, recorded as a reduction to operating revenues.
(b)Recorded as a reduction to operating revenues.
(c)Relates to gas marketing services.
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed balance sheets that total to the amount shown in the condensed statements of cash flows for the applicable Registrants:
Southern
Company		Southern PowerSouthern
Company Gas
September 30, 2021December 31, 2020September 30, 2021September 30, 2021December 31, 2020
(in millions)(in millions)(in millions)
Cash and cash equivalents$2,078 $1,065 $192 $29 $17 
Restricted cash(a):
Other current assets3 2 — 3 2 
Other deferred charges and assets21 — 21 — — 
Total cash, cash equivalents, and restricted cash(b)
$2,101 $1,068 $213 $32 $19 
(a)For Southern Company Gas, reflects restricted cash held as collateral for workers' compensation, life insurance, and long-term disability insurance. For Southern Power, reflects restricted cash held for construction payables.
(b)Total may not add due to rounding.
Natural Gas for Sale
With the exception of Nicor Gas, Southern Company Gas records natural gas inventories on a WACOG basis. For any declines in market prices below the WACOG considered to be other than temporary, an adjustment is recorded to reduce the value of natural gas inventories to market value. Nicor Gas' natural gas inventory is carried at cost on a LIFO basis. Inventory decrements occurring during the year that are restored prior to year end are charged to cost of natural gas at the estimated annual replacement cost. Inventory decrements that are not restored prior to year end are charged to cost of natural gas at the actual LIFO cost of the inventory layers liquidated.
Southern Company Gas recorded no material adjustments to natural gas inventories for any period presented. Nicor Gas' inventory decrement at September 30, 2021 is expected to be restored prior to year end.
Asset Retirement Obligations
See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.
Details of changes in AROs for Southern Company, Alabama Power, Georgia Power, and Mississippi Power during the first nine months of 2021 are shown in the following table. There were no material changes in AROs for the other Registrants during the first nine months of 2021.
Southern CompanyAlabama PowerGeorgia
Power		Mississippi Power
(in millions)
Balance at December 31, 2020$10,684 $3,974 $6,265 $176 
Liabilities incurred17 — 3 — 
Liabilities settled(341)(152)(154)(18)
Accretion304 116 176 6 
Cash flow revisions945 385 475 30 
Balance at September 30, 2021$11,609 $4,323 $6,765 $194 
In August 2021, Alabama Power recorded an increase of approximately $385 million to its AROs related to the CCR Rule and the related state rule based on updated estimates for post-closure costs at its ash ponds and inflation rates.
In September 2021, Georgia Power recorded an increase of approximately $435 million to its AROs related to the CCR Rule and the related state rule based on updated estimates for inflation rates and the timing of closure activities.
In September 2021, Mississippi Power recorded an increase of approximately $30 million to its AROs related to the CCR Rule based on updated estimates for the timing of closure activities, post-closure costs at one of its ash ponds, and inflation rates.
The traditional electric operating companies have periodically updated, and expect to continue periodically updating, their related cost estimates and ARO liabilities for each CCR unit as additional information related to these assumptions becomes available. Some of these updates have been, and future updates may be, material. Additionally, the closure designs and plans in the States of Alabama and Georgia are subject to approval by environmental regulatory agencies. Absent continued recovery of ARO costs through regulated rates, results of operations, cash flows, and financial condition for Southern Company and the traditional electric operating companies could be materially impacted. See Note (B) under "Georgia Power – Rate Plan" for additional information. The ultimate outcome of these matters cannot be determined at this time.