Southern Company Reports First-Quarter 2021 Earnings
ATLANTA, April 29, 2021 /PRNewswire/ -- Southern Company today reported first-quarter 2021 earnings of $1.14 billion, or $1.07 per share, compared with $868 million, or 82 cents per share, in the first quarter of 2020.
Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $1.04 billion, or 98 cents per share, during the first quarter of 2021, compared with $825 million, or 78 cents per share, during the first quarter of 2020.
Non-GAAP Financial Measures | Three Months Ended March | ||
Net Income - Excluding Items (in millions) | 2021 | 2020 | |
Net Income - As Reported | $1,135 | $868 | |
Less: | |||
Estimated Loss on Plants Under Construction | (45) | (3) | |
Tax Impact | 11 | 1 | |
Acquisition and Disposition Impacts | - | 38 | |
Tax Impact | - | (16) | |
Wholesale Gas Services | 166 | 31 | |
Tax Impact | (40) | (8) | |
Net Income – Excluding Items | $1,043 | $825 | |
Average Shares Outstanding – (in millions) | 1,060 | 1,057 | |
Basic Earnings Per Share – Excluding Items | $0.98 | $0.78 | |
NOTE: | For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package. |
Earnings drivers for the first quarter of 2021, as compared with 2020, were robust customer growth, higher residential sales and colder weather, partially offset by lower commercial and industrial sales.
"Southern Company experienced a strong start to the year," said Chairman, President and CEO, Thomas A. Fanning. "The economies in our service territories are starting to recover from the COVID-19 pandemic," added Fanning. "Customer demand is improving faster than we anticipated. Importantly, programs we implemented to keep customers connected during the pandemic – including alternative payment arrangements -- have helped those in need of assistance as we have continued to reliably provide for their energy needs. I am extremely proud of our employees and the ways we have partnered with our communities during this time."
First-quarter 2021 operating revenues were $5.9 billion, compared with $5.0 billion for the first quarter of 2020, an increase of 17.8 percent. This increase was primarily due to colder weather and higher fuel costs.
Southern Company's first-quarter earnings slides with supplemental financial information are available at http://investor.southerncompany.com.
Southern Company's financial analyst call will begin at 1 p.m. Eastern Time today, during which Fanning and Chief Financial Officer Andrew W. Evans will discuss earnings and provide a general business update, including an update on the Vogtle units 3 and 4 construction project. Investors, media and the public may listen to a live webcast of the call and view associated slides at http://investor.southerncompany.com/webcasts. A replay of the webcast will be available on the site for 12 months.
About Southern Company
Southern Company (NYSE: SO) is a leading energy company serving 9 million customers through its subsidiaries. The company provides clean, safe, reliable and affordable energy through electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company serving wholesale customers across America, a leading distributed energy infrastructure company, a fiber optics network and telecommunications services. Southern Company brands are known for excellent customer service, high reliability and affordable prices below the national average. For more than a century, we have been building the future of energy and developing the full portfolio of energy resources, including carbon-free nuclear, advanced carbon capture technologies, natural gas, renewables, energy efficiency and storage technology. Through an industry-leading commitment to innovation and a low-carbon future, Southern Company and its subsidiaries develop the customized energy solutions our customers and communities require to drive growth and prosperity. Our uncompromising values ensure we put the needs of those we serve at the center of everything we do and govern our business to the benefit of our world. Our corporate culture and hiring practices have been recognized nationally by the U.S. Department of Defense, G.I. Jobs magazine, DiversityInc, Black Enterprise, Forbes and the Women's Choice Award. To learn more, visit www.southerncompany.com.
Southern Company | |||||||
Financial Highlights | |||||||
(In Millions of Dollars Except Earnings Per Share) | |||||||
Three Months Ended March | |||||||
Net Income–As Reported (See Notes) | 2021 | 2020 | |||||
Traditional Electric Operating Companies | $ | 756 | $ | 642 | |||
Southern Power | 97 | 75 | |||||
Southern Company Gas | 398 | 275 | |||||
Total | 1,251 | 992 | |||||
Parent Company and Other | (116) | (124) | |||||
Net Income–As Reported | $ | 1,135 | $ | 868 | |||
Basic Earnings Per Share1 | $ | 1.07 | $ | 0.82 | |||
Average Shares Outstanding (in millions) | 1,060 | 1,057 | |||||
End of Period Shares Outstanding (in millions) | 1,059 | 1,056 | |||||
Non-GAAP Financial Measures | Three Months Ended March | ||||||
Net Income–Excluding Items (See Notes) | 2021 | 2020 | |||||
Net Income–As Reported | $ | 1,135 | $ | 868 | |||
Less: | |||||||
Estimated Loss on Plants Under Construction2 | (45) | (3) | |||||
Tax Impact | 11 | 1 | |||||
Acquisition and Disposition Impacts3 | — | 38 | |||||
Tax Impact | — | (16) | |||||
Wholesale Gas Services4 | 166 | 31 | |||||
Tax Impact | (40) | (8) | |||||
Net Income–Excluding Items | $ | 1,043 | $ | 825 | |||
Basic Earnings Per Share–Excluding Items | $ | 0.98 | $ | 0.78 | |||
-See Notes on the following page. | |||||||
Southern Company | |
Notes | |
(1) | Dilution is not material in any period presented. Diluted earnings per share was $1.06 and $0.81 for the three months ended March 31, 2021 and 2020, respectively. |
(2) | Earnings for the three months ended March 31, 2021 include a charge of $48 million pre tax ($36 million after tax) for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4. Further charges may occur; however, the amount and timing of any such charges are uncertain. Earnings for the three months ended March 31, 2021 and 2020 include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, totaling $10 million to $20 million annually through 2025. |
(3) | Earnings for the three months ended March 31, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Further impacts may be recorded in future periods in connection with acquisition and disposition activity. |
(4) | Earnings for the three months ended March 31, 2021 and 2020 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments. |
Southern Company | |||||||||||
Significant Factors Impacting EPS | |||||||||||
Three Months Ended March | |||||||||||
2021 | 2020 | Change | |||||||||
Earnings Per Share– | |||||||||||
As Reported1 (See Notes) | $ | 1.07 | $ | 0.82 | $ | 0.25 | |||||
Significant Factors: | |||||||||||
Traditional Electric Operating Companies | $ | 0.11 | |||||||||
Southern Power | 0.02 | ||||||||||
Southern Company Gas | 0.12 | ||||||||||
Parent Company and Other | — | ||||||||||
Increase in Shares | — | ||||||||||
Total–As Reported | $ | 0.25 | |||||||||
Three Months Ended March | |||||||||||
Non-GAAP Financial Measures | 2021 | 2020 | Change | ||||||||
Earnings Per Share– | |||||||||||
Excluding Items (See Notes) | $ | 0.98 | $ | 0.78 | $ | 0.20 | |||||
Total–As Reported | $ | 0.25 | |||||||||
Less: | |||||||||||
Estimated Loss on Plants Under Construction2 | (0.03) | ||||||||||
Acquisition and Disposition Impacts3 | (0.02) | ||||||||||
Wholesale Gas Services4 | 0.10 | ||||||||||
Total–Excluding Items | $ | 0.20 | |||||||||
- See Notes on the following page. | |||||||||||
Southern Company | |
Notes | |
(1) | Dilution is not material in any period presented. Diluted earnings per share was $1.06 and $0.81 for the three months ended March 31, 2021 and 2020, respectively. |
(2) | Earnings for the three months ended March 31, 2021 include a charge of $48 million pre tax ($36 million after tax) for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4. Further charges may occur; however, the amount and timing of any such charges are uncertain. Earnings for the three months ended March 31, 2021 and 2020 include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, totaling $10 million to $20 million annually through 2025. |
(3) | Earnings for the three months ended March 31, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Further impacts may be recorded in future periods in connection with acquisition and disposition activity. |
(4) | Earnings for the three months ended March 31, 2021 and 2020 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments. |
Southern Company | ||
EPS Earnings Analysis | ||
Three Months Ended March 2021 vs. March 2020 | ||
Description | Cents | |
Retail Sales | (1)¢ | |
Retail Revenue Impacts | 2 | |
Weather | 6 | |
Wholesale & Other Operating Revenues | 4 | |
Depreciation and Amortization, Interest Expense, Other | 3 | |
Total Traditional Electric Operating Companies | 14¢ | |
Southern Power | 4 | |
Southern Company Gas | 2 | |
Total Change in EPS (Excluding Items) | 20¢ | |
Estimated Loss on Plants Under Construction1 | (3) | |
Acquisition and Disposition Impacts2 | (2) | |
Wholesale Gas Services3 | 10 | |
Total Change in EPS (As Reported) | 25¢ | |
- See Notes on the following page. | ||
Southern Company | |
Notes | |
(1) | Earnings for the three months ended March 31, 2021 include a charge of $48 million pre tax ($36 million after tax) for an estimated probable loss on Georgia Power Company's construction of Plant Vogtle Units 3 and 4. Further charges may occur; however, the amount and timing of any such charges are uncertain. Earnings for the three months ended March 31, 2021 and 2020 include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi. Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, totaling $10 million to $20 million annually through 2025. |
(2) | Earnings for the three months ended March 31, 2020 primarily include a $39 million pre-tax ($23 million after-tax) gain on the sale of Southern Power Company's Plant Mankato. Further impacts may be recorded in future periods in connection with acquisition and disposition activity. |
(3) | Earnings for the three months ended March 31, 2021 and 2020 include Wholesale Gas Services business results. Presenting earnings and earnings per share excluding Wholesale Gas Services provides an additional measure of operating performance that excludes the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments. |
Southern Company | |||||||||||
Consolidated Earnings | |||||||||||
As Reported | |||||||||||
(In Millions of Dollars) | |||||||||||
Three Months Ended March | |||||||||||
2021 | 2020 | Change | |||||||||
Income Account- | |||||||||||
Retail Electric Revenues- | |||||||||||
Fuel | $ | 838 | $ | 677 | $ | 161 | |||||
Non-Fuel | 2,504 | 2,401 | 103 | ||||||||
Wholesale Electric Revenues | 545 | 418 | 127 | ||||||||
Other Electric Revenues | 170 | 151 | 19 | ||||||||
Natural Gas Revenues | 1,694 | 1,249 | 445 | ||||||||
Other Revenues | 159 | 122 | 37 | ||||||||
Total Revenues | 5,910 | 5,018 | 892 | ||||||||
Fuel and Purchased Power | 1,055 | 817 | 238 | ||||||||
Cost of Natural Gas | 583 | 439 | 144 | ||||||||
Cost of Other Sales | 82 | 55 | 27 | ||||||||
Non-Fuel O&M | 1,372 | 1,296 | 76 | ||||||||
Depreciation and Amortization | 871 | 857 | 14 | ||||||||
Taxes Other Than Income Taxes | 345 | 330 | 15 | ||||||||
Estimated Loss on Plant Vogtle Units 3 and 4 | 48 | — | 48 | ||||||||
(Gain) Loss on Dispositions, net | (44) | (39) | (5) | ||||||||
Total Operating Expenses | 4,312 | 3,755 | 557 | ||||||||
Operating Income | 1,598 | 1,263 | 335 | ||||||||
Allowance for Equity Funds Used During Construction | 46 | 34 | 12 | ||||||||
Earnings from Equity Method Investments | 45 | 42 | 3 | ||||||||
Interest Expense, Net of Amounts Capitalized | 450 | 456 | (6) | ||||||||
Other Income (Expense), net | 58 | 103 | (45) | ||||||||
Income Taxes | 190 | 145 | 45 | ||||||||
Net Income | 1,107 | 841 | 266 | ||||||||
Less: | |||||||||||
Dividends on Preferred Stock of Subsidiaries | 4 | 4 | — | ||||||||
Net Loss Attributable to Noncontrolling Interests | (32) | (31) | (1) | ||||||||
NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY | $ | 1,135 | $ | 868 | $ | 267 | |||||
Notes | |
- Certain prior year data may have been reclassified to conform with current year presentation. |
Southern Company | ||||||||||||||||||||||
Kilowatt-Hour Sales and Customers | ||||||||||||||||||||||
(In Millions of KWHs) | ||||||||||||||||||||||
Three Months Ended March | ||||||||||||||||||||||
2021 | 2020 | Change | Weather | |||||||||||||||||||
Kilowatt-Hour Sales- | ||||||||||||||||||||||
Total Sales | 46,422 | 44,263 | 4.9 | % | ||||||||||||||||||
Total Retail Sales- | 34,651 | 34,045 | 1.8 | % | (1.6) | % | ||||||||||||||||
Residential | 12,040 | 10,866 | 10.8 | % | 1.1 | % | ||||||||||||||||
Commercial | 10,743 | 10,939 | (1.8) | % | (3.1) | % | ||||||||||||||||
Industrial | 11,708 | 12,066 | (3.0) | % | (3.0) | % | ||||||||||||||||
Other | 160 | 174 | (7.7) | % | (8.2) | % | ||||||||||||||||
Total Wholesale Sales | 11,771 | 10,218 | 15.2 | % | N/A | |||||||||||||||||
(In Thousands of Customers) | ||||||||||||||||||||||
Period Ended March | ||||||||||||||||||||||
2021 | 2020 | Change | ||||||||||||||||||||
Regulated Utility Customers- | ||||||||||||||||||||||
Total Utility Customers- | 8,673 | 8,578 | 1.1% | |||||||||||||||||||
Total Traditional Electric | 4,338 | 4,280 | 1.4% | |||||||||||||||||||
Southern Company Gas | 4,335 | 4,298 | 0.9% | |||||||||||||||||||
Southern Company | ||||||||||||||||||||||
Financial Overview | ||||||||||||||||||||||
As Reported | ||||||||||||||||||||||
(In Millions of Dollars) | ||||||||||||||||||||||
Three Months Ended March | ||||||||||||||||||||||
2021 | 2020 | % Change | ||||||||||||||||||||
Southern Company – | ||||||||||||||||||||||
Operating Revenues | $ | 5,910 | $ | 5,018 | 17.8 | % | ||||||||||||||||
Earnings Before Income Taxes | 1,297 | 986 | 31.5 | % | ||||||||||||||||||
Net Income Available to Common | 1,135 | 868 | 30.8 | % | ||||||||||||||||||
Alabama Power – | ||||||||||||||||||||||
Operating Revenues | $ | 1,559 | $ | 1,351 | 15.4 | % | ||||||||||||||||
Earnings Before Income Taxes | 473 | 368 | 28.5 | % | ||||||||||||||||||
Net Income Available to Common | 359 | 280 | 28.2 | % | ||||||||||||||||||
Georgia Power – | ||||||||||||||||||||||
Operating Revenues | $ | 1,970 | $ | 1,825 | 7.9 | % | ||||||||||||||||
Earnings Before Income Taxes | 369 | 347 | 6.3 | % | ||||||||||||||||||
Net Income Available to Common | 351 | 331 | 6.0 | % | ||||||||||||||||||
Mississippi Power – | ||||||||||||||||||||||
Operating Revenues | $ | 307 | $ | 277 | 10.8 | % | ||||||||||||||||
Earnings Before Income Taxes | 49 | 38 | 28.9 | % | ||||||||||||||||||
Net Income Available to Common | 45 | 32 | 40.6 | % | ||||||||||||||||||
Southern Power – | ||||||||||||||||||||||
Operating Revenues | $ | 440 | $ | 375 | 17.3 | % | ||||||||||||||||
Earnings Before Income Taxes | 55 | 51 | 7.8 | % | ||||||||||||||||||
Net Income Available to Common | 97 | 75 | 29.3 | % | ||||||||||||||||||
Southern Company Gas – | ||||||||||||||||||||||
Operating Revenues | $ | 1,694 | $ | 1,249 | 35.6 | % | ||||||||||||||||
Earnings Before Income Taxes | 519 | 354 | 46.6 | % | ||||||||||||||||||
Net Income Available to Common | 398 | 275 | 44.7 | % | ||||||||||||||||||
Notes | |
- See Financial Highlights pages for discussion of certain significant items occurring during the periods |
SOURCE Southern Company
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