Southern Company reports third quarter earnings

ATLANTA, Oct. 28, 2015 /PRNewswire/ -- Southern Company today reported third quarter 2015 earnings of $959 million, or $1.05 per share, compared with earnings of $718 million, or 80 cents per share, in the third quarter of 2014. 

For the nine months ended Sept. 30, 2015, earnings were $2.1 billion, or $2.30 per share, compared with earnings of $1.7 billion, or $1.88 per share, for the same period in 2014.

Earnings for the three and nine months ended Sept. 30, 2015, include after-tax charges of $93 million (11 cents per share) and $112 million (13 cents per share), respectively, related to increased cost estimates for the construction of Mississippi Power's Kemper County integrated gasification combined cycle (IGCC) project. Earnings for the three and nine months ended Sept. 30, 2014, include after-tax charges of $258 million (29 cents per share) and $493 million (55 cents per share), respectively, related to the Kemper County IGCC project. Earnings for the three and nine months ended Sept. 30, 2015, include after-tax charges of $12 million related to the proposed acquisition of AGL Resources Inc. Earnings for the nine months ended Sept. 30, 2015, also include a $4 million after-tax charge related to the discontinued operations of Mirant and the March 2009 settlement agreement with MC Asset Recovery, LLC.

Excluding these items, Southern Company earned $1.06 billion, or $1.17 per share, during the third quarter of 2015, compared with $976 million, or $1.09 per share, during the third quarter of 2014. For the first nine months of 2015, excluding these items, Southern Company earned $2.22 billion, or $2.45 per share, compared with earnings of $2.17 billion, or $2.43 per share, for the same period in 2014.

Earnings for the third quarter of 2015 were positively influenced by retail revenue effects at Southern Company's traditional operating companies and stronger than expected performance of its Southern Power subsidiary. Earnings were negatively influenced by increased non-fuel operations and maintenance expenses.

"We not only achieved great financial results for the third quarter, but also delivered major accomplishments that position us well for the future," said Southern Company Chairman, President and CEO Thomas A. Fanning. "Our financial performance was bolstered by Southern Power's solar investments, and we see positive momentum from the pending settlement of litigation related to Plant Vogtle units 3 and 4 and tremendous success with testing on the first of two gasifiers at the Kemper County facility."

Third quarter 2015 operating revenues were $5.40 billion, compared with $5.34 billion for the same period in 2014, an increase of 1.2 percent. Operating revenues for the first nine months of 2015 were $13.92 billion, compared with $14.45 billion for the same period in 2014, a 3.7 percent decrease.

Kilowatt-hour sales to retail customers in Southern Company's four-state service area increased 1.3 percent in the third quarter of 2015, compared with the third quarter of 2014. Residential energy sales increased 2.7 percent, commercial energy sales increased 1.9 percent and industrial energy sales decreased 0.6 percent.  For the first nine months of 2015, retail sales increased 0.8 percent, compared with the same period in 2014. Residential energy sales increased 0.9 percent, commercial energy sales increased 1.1 percent and industrial energy sales increased 0.4 percent.

Weather-adjusted kilowatt-hour sales to retail customers in Southern Company's four-state service area increased 0.2 percent in the third quarter of 2015, compared with the third quarter of 2014. Weather-adjusted residential energy sales increased 0.1 percent, weather-adjusted commercial energy sales increased 1.0 percent and industrial energy sales decreased 0.6 percent. For the first nine months of 2015, weather-adjusted retail sales increased 0.6 percent, compared with the same period in 2014. Weather-adjusted residential energy sales increased 0.5 percent, weather-adjusted commercial energy sales increased 0.8 percent and industrial energy sales increased 0.5 percent.

Total energy sales to the Southern Company system's customers in the Southeast, including wholesale sales were flat in the third quarter of 2015 compared with the same period in 2014. For the first nine months of 2015, total energy sales decreased 0.4 percent compared with the same period in 2014.

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/webcasts. A replay of the webcast will be available at the site for 12 months.

Southern Company has also posted on its website detailed financial information on its third quarter performance. These materials are available at www.southerncompany.com.

With more than 4.5 million customers and approximately 46,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy company serving the Southeast through its subsidiaries. A leading U.S. producer of clean, safe, reliable and affordable 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 affordable prices that are below the national average. Through an industry-leading commitment to innovation, Southern Company and its subsidiaries are inventing America's energy future by developing the full portfolio of energy resources, including nuclear, 21^st century coal, natural gas, renewables and energy efficiency, and creating new products and services for the benefit of customers. Southern Company has been named by the U.S. Department of Defense and G.I. Jobs magazine as a top military employer, listed by Black Enterprise magazine as one of the 40 Best Companies for Diversity and designated a 2014 Top Employer for Hispanics by Hispanic Network. The company earned the 2014 National Award of Nuclear Science and History from the National Atomic Museum Foundation for its leadership and commitment to nuclear development, and is continually ranked among the top utilities in Fortune's annual World's Most Admired Electric and Gas Utility rankings. Visit our website at www.southerncompany.com.

Cautionary Notes Regarding Forward-Looking Statements:

Certain information contained in this release is forwardlooking information based on current expectations and plans that involve risks and uncertainties. Forwardlooking information includes, among other things, statements concerning the completion and start-up of ongoing construction projects and the proposed settlement of the Plant Vogtle Units 3 and 4 commercial dispute. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forwardlooking information that has been provided. The reader is cautioned not to put undue reliance on this forwardlooking 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 10K for the year ended December 31, 2014, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forwardlooking 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, environmental laws including regulation of water, coal combustion residuals, and emissions of sulfur, nitrogen, carbon dioxide, soot, particulate matter, hazardous air pollutants, including mercury, and other substances, 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, Federal Energy Regulatory Commission matters, and Internal Revenue Service and state tax 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 last recession, population and business growth (and declines), the effects of energy conservation and efficiency measures, including from the development and deployment of alternative energy sources such as self-generation and distributed generation technologies, and any potential economic impacts resulting from federal fiscal decisions; available sources and costs of fuels; effects of inflation; the ability to control costs and avoid cost overruns during the development and construction of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed, including changes in labor costs and productivity, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, contractor or supplier delay, non-performance under construction or other agreements, operational readiness, including specialized operator training and required site safety programs, unforeseen engineering or design problems, start-up activities (including major equipment failure and system integration), and/or operational performance (including additional costs to satisfy any operational parameters ultimately adopted by any Public Service Commission ("PSC")); the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction; investment performance of Southern Company's employee and retiree benefit plans and the Southern Company system's 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; legal proceedings and regulatory approvals and actions related to Plant Vogtle Units 3 and 4, including Georgia PSC approvals and Nuclear Regulatory Commission actions and related legal proceedings involving the commercial parties; the ability to complete the proposed settlement among the Plant Vogtle Units 3 and 4 commercial parties; actions related to cost recovery for the integrated coal gasification combined cycle facility under construction in Kemper County, Mississippi ("Kemper IGCC"), including the ultimate impact of the 2015 decision of the Mississippi Supreme Court, the Mississippi PSC's August 2015 interim rate order, and related legal or regulatory proceedings, Mississippi PSC review of the prudence of Kemper IGCC project costs and approval of permanent rate recovery plans, actions relating to proposed securitization, the ability to utilize bonus depreciation, which currently requires that assets be placed in service in 2015, satisfaction of requirements to utilize investment tax credits and grants, and the ultimate impact of the termination of the proposed sale of an interest in the Kemper IGCC to South Mississippi Electric Power Association; the ability to successfully operate the electric utilities' generating, transmission, and distribution facilities and the successful performance of necessary corporate functions; the inherent risks involved in operating and constructing nuclear generating facilities, including environmental, health, regulatory, natural disaster, terrorism, and financial risks; 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 expected timing, likelihood, and benefits of completion of the proposed acquisition of AGL Resources Inc., including the failure to receive, on a timely basis or otherwise, the required approvals by AGL Resources' shareholders and government or regulatory agencies (including the terms of such approvals), the possibility that long-term financing for the acquisition may not be put in place prior to the closing, the risk that a condition to closing of the acquisition or funding of the bridge financing may not be satisfied, the possibility that the anticipated benefits from the acquisition cannot be fully realized or may take longer to realize than expected, the possibility that costs related to the integration of Southern Company and AGL Resources will be greater than expected, the credit ratings of the combined company or its subsidiaries may be different from what the parties expect, the ability to retain and hire key personnel and maintain relationships with customers, suppliers, or other business partners, the diversion of management time on acquisition-related issues, and the impact of legislative, regulatory, and competitive changes; 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 the Southern Company system's business resulting from cyber intrusion or terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts; changes in Southern Company's and any of its subsidiaries' credit ratings, including impacts on interest rates, access to capital markets, and collateral requirements; the impacts of any sovereign financial issues, including 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 benefits of the U.S. Department of Energy loan guarantees; the ability of Southern Company's subsidiaries to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes and other storms, droughts, pandemic health events such as influenzas, or other similar occurrences; the direct or indirect effects on the Southern Company system'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 forwardlooking information.

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