Southern Company Reports 2011 Fourth Quarter and Full-Year Earnings

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Jan 25, 2012, 07:30 ET

ATLANTA, Jan. 25, 2012 /PRNewswire/ -- Southern Company today reported fourth quarter 2011 earnings of $261 million, or 30 cents a share, compared with earnings of $153 million, or 18 cents a share, in the fourth quarter of 2010. Southern Company also reported full-year 2011 earnings of $2.20 billion, or $2.57 a share, compared with earnings for 2010 of $1.97 billion, or $2.37 a share.

Earnings for the quarter and the full year were positively influenced by regulatory actions -- primarily at subsidiary Georgia Power -- that became effective in 2011, as well as operating results at Southern Power, Southern Company's competitive generation subsidiary. Earnings were negatively affected by weather that was closer to normal in 2011 than it had been in 2010.

"In a year filled with challenges, our employees continued to deliver results on behalf of the customers and communities we serve," said Thomas A. Fanning, Southern Company chairman, president and chief executive officer. "They are helping to fulfill Southern Company's $20 billion commitment to build the energy future of the Southeast, a process that is expected to grow more than 250,000 jobs, according to analysis by the University of West Georgia."

Fanning noted that economic conditions in the region are improving, albeit slowly. "We see a still-challenged economy that is exhibiting sustained industrial growth alongside flat commercial and residential growth," he said. "In recent weeks, positive signs have emerged in the form of job growth and lower unemployment rates. Meanwhile, the future looks bright, as companies continue to show avid interest in locating and expanding their businesses here in the Southeast."

Revenues for the full year were $17.66 billion, compared with $17.46 billion in 2010, a 1.2 percent increase. Fourth quarter revenues were $3.70 billion, compared with $3.77 billion for the same period in 2010, a decrease of 2.0 percent.

Kilowatt-hour sales to retail customers in Southern Company's four-state service area decreased 2.7 percent in 2011, compared with 2010. Residential energy sales decreased 7.7 percent, commercial energy sales decreased 2.9 percent and industrial energy sales increased 3.2 percent.

Total energy sales to Southern Company's customers in the Southeast, including wholesale sales, decreased 3.4 percent in 2011 compared with 2010.

Southern Company's financial analyst call will begin at 1 p.m. Eastern time today, during which Fanning and Chief Financial Officer Art P. Beattie will discuss earnings and provide a general business update. Investors, media and the public may listen to a live webcast of the call and view associated slides at http://investor.southerncompany.com/events.cfm. A replay of the webcast only will be available at the site for 12 months.

Southern Company has also posted on its website detailed financial information on its fourth quarter and full-year performance. These materials are available at www.southerncompany.com.

With 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy company serving the Southeast. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are below the national average. Southern Company was named the World's Most Admired Electric and Gas Utility by Fortune magazine in 2011, and is consistently listed among the top U.S. electric service providers in customer satisfaction by the American Customer Satisfaction Index. Visit our website at www.southerncompany.com.

Cautionary Note Regarding Forward-Looking Statements:

Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the economy, job creation and capital expenditures. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company's Annual Report on Form 10-K for the year ended December 31, 2010, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory changes, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, environmental laws including regulation of water quality, coal combustion byproducts, and emissions of sulfur, nitrogen, carbon, soot, particulate matter, hazardous air pollutants, including mercury, and other substances, financial reform legislation, and also changes in tax and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings, or inquiries, including the pending Environmental Protection Agency civil actions against certain Southern Company subsidiaries and Internal Revenue Service audits; the effects, extent, and timing of the entry of additional competition in the markets in which Southern Company's subsidiaries operate; variations in demand for electricity, including those relating to weather, the general economy and recovery from the recent recession, population and business growth (and declines), and the effects of energy conservation measures; available sources and costs of fuels; effects of inflation; ability to control costs and avoid cost overruns during the development and construction of facilities; investment performance of Southern Company's employee benefit plans and nuclear decommissioning trust funds; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; regulatory approvals and actions related to the Plant Vogtle expansion, including Georgia Public Service Commission and Nuclear Regulatory Commission approvals and potential U.S. Department of Energy loan guarantees; regulatory approvals and actions related to the Kemper County integrated coal gasification combined cycle facility, including Mississippi Public Service Commission approvals and potential U.S. Department of Energy loan guarantees; the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due and to perform as required; the ability to obtain new short- and long-term contracts with wholesale customers; the direct or indirect effect on Southern Company's business resulting from terrorist incidents and the threat of terrorist incidents, including cyber intrusion; interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Company's and its subsidiaries' credit ratings; the impacts of any potential U.S. credit rating downgrade or other sovereign financial issues, including the impacts on interest rates, access to capital markets, impacts on currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the availability or benefits of proposed U.S. Department of Energy loan guarantees; the ability of Southern Company and its subsidiaries to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, droughts, pandemic health events such as influenzas, or other similar occurrences; the direct or indirect effects on Southern Company's business resulting from incidents affecting the U.S. electric grid or operation of generating resources; and the effect of accounting pronouncements issued periodically by standard setting bodies. Southern Company expressly disclaims any obligation to update any forward-looking information.


Southern Company
Financial Highlights
*(In Millions of Dollars Except Earnings Per Share)*


	Three Months Ended December				Year-to-Date December
		2011		2010		2011		2010
Consolidated Earnings–As Reported
(See Notes)
Traditional Operating Companies	$	248	$	146	$	2,052	$	1,859
Southern Power		24		22		162		131
Total		272		168		2,214		1,990
Parent Company and Other		(11)		(15)		(11)		(15)
Net Income–As Reported	$	261	$	153	$	2,203	$	1,975

Basic Earnings Per Share	$	0.30	$	0.18	$	2.57	$	2.37


Average Shares Outstanding (in millions)		865		842		857		832
End of Period Shares Outstanding (in millions)						867		844



Notes
- For the three months and twelve months ended December 31, 2011 and 2010, dilution does not change basic earnings per share by more than 2 cents and is not material.

- Certain prior year data has been reclassified to conform with current year presentation.

- Information contained in this report is subject to audit and adjustments. Certain classifications and rounding may be different from final results published in the Form 10-K.

Southern Company

Significant Factors Impacting EPS

Three Months Ended December

Year-to-Date December

2011

2010

Change

2011

2010

Change

Consolidated Earnings Per Share–

As Reported (See Notes)

$0.30

$0.18

$0.12

$2.57

$2.37

$0.20

Significant Factors:

Traditional Operating Companies

0.12

0.23

Southern Power

0.04

Parent Company and Other

0.01

Additional Shares

(0.01)

(0.08)

Total–As Reported

$0.12

$0.20

Notes

- For the three months and twelve months ended December 31, 2011 and 2010, dilution does not change basic earnings per share by more than 2 cents and is not material.

- Certain prior year data has been reclassified to conform with current year presentation.

- Information contained in this report is subject to audit and adjustments. Certain classifications and rounding may be different from final results published in the Form 10-K.


Southern Company
EPS Earnings Analysis
Year-to-Date December 2011


	Cents	Description

	2 cents	Retail Sales

	60	Retail Revenue Impacts

	(21)	Weather

	(5)	Wholesale Revenues

	2	Other Operating Revenues

	6	Non-Fuel O&M

	(15)	Depreciation and Amortization

	(5)	Other Income & Deductions

	2	Interest Expense

	(2)	Taxes Other Than Income Taxes

	(1)	Income Taxes

	23 cents	Total Traditional Operating Companies

	4	Southern Power

	1	Parent and Other

	(8)	Increase in Shares

	20 cents	Total Change in YTD EPS


Notes
- Information contained in this report is subject to audit and adjustments. Certain classifications
and rounding may be different from final results published in the Form 10-K.


Southern Company
Consolidated Earnings
*(In Millions of Dollars)*

		Three Months Ended December						Year-to-Date December
		2011		2010		Change		2011		2010		Change
Income Account-
Retail Revenues-
Fuel	$	1,144	$	1,297	$	(153)	$	5,686	$	5,944	$	(258)
Non-Fuel		1,996		1,891		105		9,385		8,847		538
Wholesale Revenues		392		414		(22)		1,905		1,994		(89)
Other Electric Revenues		147		151		(4)		611		589		22
Non-regulated Operating Revenues		17		18		(1)		70		82		(12)
Total Revenues		3,696		3,771		(75)		17,657		17,456		201
Fuel and Purchased Power		1,353		1,554		(201)		6,870		7,262		(392)
Non-fuel O & M		1,101		1,164		(63)		3,938		4,010		(72)
Depreciation and Amortization		438		376		62		1,717		1,513		204
Taxes Other Than Income Taxes		215		207		8		901		869		32
Total Operating Expenses		3,107		3,301		(194)		13,426		13,654		(228)
Operating Income		589		470		119		4,231		3,802		429
Other Income, net		3		29		(26)		113		159		(46)
Interest Charges		219		229		(10)		857		895		(38)
Income Taxes		96		101		(5)		1,219		1,026		193
Net Income		277		169		108		2,268		2,040		228
Dividends on Preferred and Preference Stock of Subsidiaries		16		16		0		65		65		0
NET INCOME AFTER DIVIDENDS ON PREFERRED
AND PREFERENCE STOCK (See Notes)	$	261	$	153	$	108	$	2,203	$	1,975	$	228


Notes
- Certain prior year data has been reclassified to conform with current year presentation.

- Information contained in this report is subject to audit and adjustments. Certain classifications and rounding may be different from final results published in the Form 10-K.


Southern Company
Kilowatt-Hour Sales
*(In Millions of KWHs)*

	Three Months Ended December				Year-to-Date December
				Weather				Weather
				Adjusted				Adjusted
As Reported (See Notes)	2011	2010	Change	Change	2011	2010	Change	Change
Kilowatt-Hour Sales-
Total Sales	41,558	43,694	-4.9%		190,047	196,787	-3.4%

Total Retail Sales-	35,183	37,225	-5.5%	0.5%	159,702	164,217	-2.7%	1.0%
Residential	10,447	12,036	-13.2%	0.5%	53,341	57,798	-7.7%	0.0%
Commercial	12,183	12,808	-4.9%	-0.5%	53,855	55,492	-2.9%	-0.3%
Industrial	12,323	12,148	1.4%	1.6%	51,570	49,984	3.2%	3.3%
Other	230	233	-1.2%	-0.8%	936	943	-0.8%	-0.7%

Total Wholesale Sales	6,375	6,469	-1.5%	N/A	30,345	32,570	-6.8%	N/A

Notes
- Certain prior year data has been reclassified to conform with current year presentation.

- Information contained in this report is subject to audit and adjustments. Certain classifications and rounding may be different from final results published
in the Form 10-K.


Southern Company
Financial Overview
*(In Millions of Dollars)*

	Three Months Ended December			Year-to-Date December

	2011	2010	% Change		2011	2010	% Change

Consolidated –
Operating Revenues	$3,696	$3,771	-2.0%		$17,657	$17,456	1.2%
Earnings Before Income Taxes	373	270	37.8%		3,487	3,066	13.7%
Net Income Available to Common	261	153	69.5%		2,203	1,975	11.5%

Alabama Power –
Operating Revenues	$1,271	$1,313	-3.2%		$5,702	$5,976	-4.6%
Earnings Before Income Taxes	182	128	42.3%		1,225	1,209	1.3%
Net Income Available to Common	102	55	85.7%		708	707	0.1%

Georgia Power –
Operating Revenues	$1,758	$1,737	1.2%		$8,800	$8,349	5.4%
Earnings Before Income Taxes	156	78	99.8%		1,787	1,420	25.8%
Net Income Available to Common	110	54	103.3%		1,145	950	20.5%

Gulf Power –
Operating Revenues	$328	$347	-5.5%		$1,520	$1,590	-4.4%
Earnings Before Income Taxes	29	34	-14.1%		173	199	-13.4%
Net Income Available to Common	19	21	-10.7%		105	122	-13.6%

Mississippi Power –
Operating Revenues	$238	$256	-6.9%		$1,113	$1,143	-2.6%
Earnings Before Income Taxes	20	25	-18.5%		138	128	7.7%
Net Income Available to Common	16	16	0.7%		94	80	17.4%

Southern Power –
Operating Revenues	$286	$268	6.6%		$1,236	$1,130	9.3%
Earnings Before Income Taxes	22	50	-56.5%		238	207	15.2%
Net Income Available to Common	24	22	6.1%		162	131	23.5%




Notes
- Certain prior year data has been reclassified to conform with current year presentation.

- Information contained in this report is subject to audit and adjustments. Certain classifications and rounding may be different from final results
published in the Form 10-K.