Segment and Related Information

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segment and Related Information

SEGMENT AND RELATED INFORMATION

Southern Company

The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The traditional electric operating companies are vertically integrated utilities providing electric service in three Southeastern states. Southern Power develops, constructs, acquires, owns, and manages power generation assets, including renewable energy and battery energy storage projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through its natural gas distribution utilities and is involved in several other complementary businesses including gas pipeline investments and gas marketing services.

Southern Company's reportable business segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other complementary products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $135 million and $105 million for the three months ended March 31, 2023 and 2022, respectively. Revenues from sales of natural gas from Southern Company Gas to the traditional electric operating companies and Southern Power were immaterial for both periods presented. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include providing distributed energy and resilience solutions and deploying microgrids for commercial, industrial, governmental, and utility customers, as well as investments in telecommunications and, for the three months ended March 31, 2022, leveraged lease projects. All other inter-segment revenues are not material.

Financial data for business segments and products and services for the three months ended March 31, 2023 and 2022 was as follows:

	Electric Utilities
	Traditional Electric Operating Companies		Southern Power		Eliminations		Total		Southern Company Gas		All Other		Eliminations		Consolidated
	(in millions)
Three Months Ended March 31, 2023
Operating revenues	$	4,113	$	508	$	(138)	$	4,483	$	1,875	$	166	$	(44)	$	6,480
Segment net income (loss)(a)(b)	610		102		—		712		309		(154)		(5)		862
At March 31, 2023
Goodwill	$	—	$	2	$	—	$	2	$	5,015	$	144	$	—	$	5,161
Total assets	96,223		13,134		(575)		108,782		24,222		2,606		(854)		134,756
Three Months Ended March 31, 2022
Operating revenues	$	4,191	$	539	$	(221)	$	4,509	$	2,058	$	123	$	(42)	$	6,648
Segment net income (loss)(a)	774		72		—		846		319		(125)		(8)		1,032
At December 31, 2022
Goodwill	$	—	$	2	$	—	$	2	$	5,015	$	144	$	—	$	5,161
Total assets	95,861		13,081		(659)		108,283		24,621		2,665		(678)		134,891

(a)Attributable to Southern Company.

(b)For Southern Power, includes a $16 million pre-tax gain ($12 million after tax) on the sale of spare parts.

Products and Services

	Electric Utilities' Revenues
	Retail		Wholesale		Other		Total
	(in millions)
Three Months Ended March 31, 2023	$	3,599	$	599	$	285	$	4,483
Three Months Ended March 31, 2022	3,613		664		232		4,509

	Southern Company Gas' Revenues
	Gas Distribution Operations		Gas Marketing Services		Other		Total
	(in millions)
Three Months Ended March 31, 2023	$	1,610	$	246	$	19	$	1,875
Three Months Ended March 31, 2022	1,791		243		24		2,058

Southern Company Gas

Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services. The non-reportable segments are combined and presented as all other.

Gas distribution operations is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities in four states.

Gas pipeline investments consists of joint ventures in natural gas pipeline investments including a 50% interest in SNG and a 50% joint ownership interest in the Dalton Pipeline. These natural gas pipelines enable the provision of diverse sources of natural gas supplies to the customers of Southern Company Gas. See Note 7 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.

Gas marketing services provides natural gas marketing to end-use customers primarily in Georgia and Illinois through SouthStar.

The all other column includes segments and subsidiaries that fall below the quantitative threshold for separate disclosure, including storage and fuels operations. The all other column included a natural gas storage facility in Texas through its sale in November 2022. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information, including the sale of a natural gas storage facility in California expected to be completed later in 2023.

Business segment financial data for the three months ended March 31, 2023 and 2022 was as follows:

	Gas Distribution Operations		Gas Pipeline Investments		Gas Marketing Services		Total		All Other		Eliminations		Consolidated
	(in millions)
Three Months Ended March 31, 2023
Operating revenues	$	1,618	$	8	$	246	$	1,872	$	12	$	(9)	$	1,875
Segment net income	221		31		50		302		7		—		309
Total assets at March 31, 2023	22,223		1,583		1,596		25,402		9,598		(10,778)		24,222
Three Months Ended March 31, 2022
Operating revenues	$	1,803	$	8	$	243	$	2,054	$	16	$	(12)	$	2,058
Segment net income	214		29		66		309		10		—		319
Total assets at December 31, 2022	22,040		1,577		1,616		25,233		8,943		(9,555)		24,621