PR Newswire
ATLANTA
, Oct. 27, 2022 /PRNewswire/ — Southern Company today reported third-quarter earnings of $1.5 billion, or $1.36 per share, in 2022 compared with $1.1 billion, or $1.04 per share, in 2021. For the nine months ended September 30, 2022, Southern Company reported earnings of $3.6 billion, or $3.38 per share, compared with $2.6 billion, or $2.46 per share, for the same period in 2021.
Excluding the items described under “Net Income – Excluding Items” in the table below, Southern Company earned $1.4 billion, or $1.31 per share, during the third quarter of 2022, compared with $1.3 billion, or $1.23 per share, during the third quarter 2021. For the nine months ended September 30, 2022, excluding these items, Southern Company earned $3.6 billion, or $3.35 per share, compared with $3.2 billion, or $3.05 per share, for the same period in 2021.
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2021 |
|
2021 |
||
|
Net Income – As Reported |
|
$1,101 |
|
$2,608 |
||
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Less: |
||||||
|
Estimated Loss on Plants Under Construction |
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(271) |
|
(779) |
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Tax Impact |
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69 |
|
198 |
||
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Acquisition and Disposition Impacts |
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119 |
|
120 |
||
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Tax Impact |
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(112) |
|
(112) |
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Wholesale Gas Services |
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– |
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18 |
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Tax Impact |
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1 |
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(3) |
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Asset Impairments |
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(2) |
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(91) |
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Tax Impact |
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(7) |
|
19 |
||
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|
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$1,304 |
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$3,238 |
||
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Average Shares Outstanding – (in millions) |
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1,061 |
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1,060 |
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Basic Earnings Per Share – Excluding Items |
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$1.23 |
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$3.05 |
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NOTE: For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package. |
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Adjusted earnings drivers for the third quarter 2022, as compared with the same period in 2021, were higher revenues associated with increased usage, rates and pricing at the company’s regulated utilities, partially offset by higher non-fuel operations and maintenance costs, reflecting a rising cost environment and the company’s long-term commitment to reliability and resilience, along with higher interest expense.
Third-quarter 2022 operating revenues were $8.4 billion, compared with $6.2 billion for the third quarter of 2021, an increase of 34.3 percent. For the nine months ended September 30, 2022, operating revenues were $22.2 billion, compared with $17.3 billion for the corresponding period in 2021, an increase of 28.2 percent. These increases were primarily due to higher fuel costs.
“Our premier, state-regulated electric and gas utilities continued to perform well during the third quarter,” commented Chairman, President and CEO, Thomas A. Fanning. “The economies within our service territories remain strong, and customer growth outpaced our expectations.”
Added Fanning, “At Plant Vogtle Unit 3, we successfully completed initial fuel load with the safe transfer of all 157 fuel assemblies from the spent fuel pool to the reactor core. This historic milestone marks the completion of another critical step toward start-up and commercial operation of Unit 3.”
Southern Company’s third-quarter earnings slides with supplemental financial information, including earnings guidance, 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 Daniel S. Tucker 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. 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.
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2021 |
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2021 |
|||
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Traditional Electric Operating Companies |
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$ 1,085 |
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$ 2,352 |
|||
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Southern Power |
|
78 |
|
211 |
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Southern Company Gas |
|
56 |
|
389 |
|||
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1,219 |
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2,952 |
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Parent Company and Other |
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(118) |
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(344) |
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$ 1,101 |
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$ 2,608 |
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Basic Earnings Per Share1 |
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$ 1.04 |
|
$ 2.46 |
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Average Shares Outstanding (in millions) |
|
1,061 |
|
1,060 |
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End of Period Shares Outstanding (in millions) |
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1,060 |
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2021 |
|
2021 |
|||
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Net Income–As Reported |
|
$ 1,101 |
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$ 2,608 |
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Less: |
|||||||
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Estimated Loss on Plants Under Construction2 |
|
(271) |
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(779) |
|||
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Tax Impact |
|
69 |
|
198 |
|||
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Acquisition and Disposition Impacts3 |
|
119 |
|
120 |
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|
Tax Impact |
|
(112) |
|
(112) |
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Wholesale Gas Services4 |
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— |
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18 |
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Tax Impact |
|
1 |
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(3) |
|||
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Asset Impairments5 |
|
(2) |
|
(91) |
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Tax Impact |
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(7) |
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19 |
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$ 1,304 |
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$ 3,238 |
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Basic Earnings Per Share–Excluding Items |
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$ 1.23 |
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$ 3.05 |
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– See Notes on the following page. |
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Page 4
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(1) |
Dilution is not material in any period presented. Diluted earnings per share was $1.35 and $3.36 for the three and nine months ended September 30, 2022 and was $1.03 and $2.44 for the three and nine months ended September 30, 2021, respectively. |
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(2) |
Earnings for the three and nine months ended September 30, 2022 include a net credit of $70 million pre tax ($52 million after tax) and $18 million pre tax ($13 million after tax), respectively, earnings for the three months ended September 30, 2021 include a charge of $264 million pre tax ($197 million after tax), and earnings for the nine months ended September 30, 2021 include charges totaling $772 million pre tax ($576 million after tax) for estimated probable losses on Georgia Power Company’s construction of Plant Vogtle Units 3 and 4. Further charges and credits may occur; however, the amount and timing are uncertain. Earnings for the three and nine months ended September 30, 2022 and 2021 also 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, net of salvage, totaling $10 million to $20 million annually through 2025. |
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(3) |
Earnings for the three and nine months ended September 30, 2022 include a $14 million pre-tax ($11 million after-tax) gain as a result of the early termination of the transition services agreement related to the 2019 sale of Gulf Power. Earnings for the three and nine months ended September 30, 2021 include a preliminary $121 million pre-tax ($93 million after-tax) gain on the sale of Sequent, as well as $85 million in additional tax expense resulting from the sale. Further impacts may result from future acquisition and disposition activities; however, the amount and timing of any such impacts are uncertain. |
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(4) |
Earnings for the three and nine months ended September 30, 2021 include results of the Wholesale Gas Services business. Presenting earnings and earnings per share excluding Wholesale Gas Services provided an additional measure of operating performance that excluded the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments. Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments. |
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(5) |
Earnings for the three and nine months ended September 30, 2021 include pre-tax impairment charges of $2 million ($9 million after tax) and $84 million ($67 million after tax), respectively, related to Southern Company Gas’ investment in the PennEast Pipeline project. Earnings for the nine months ended September 30, 2021 also include a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment. Southern Company Gas expects to record a pre-tax impairment charge totaling approximately $125 million ($95 million after tax) in the fourth quarter 2022 related to the pending sale of two natural gas storage facilities. Additional impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain. |
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2021 |
Change |
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2021 |
Change |
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$ 1.04 |
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$ 2.46 |
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Traditional Electric Operating Companies |
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Southern Power |
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Southern Company Gas |
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Parent Company and Other |
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Increase in Shares |
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2021 |
Change |
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2021 |
Change |
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$ 1.23 |
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$ 3.05 |
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Less: |
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Estimated Loss on Plants Under Construction2 |
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|||||||||
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Acquisition and Disposition Impacts3 |
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Wholesale Gas Services4 |
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Asset Impairments5 |
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– See Notes on the following page. |
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Page 6 |
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(1) |
Dilution is not material in any period presented. Diluted earnings per share was $1.35 and $3.36 for the three and nine months ended September 30, 2022 and was $1.03 and $2.44 for the three and nine months ended September 30, 2021, respectively. |
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(2) |
Earnings for the three and nine months ended September 30, 2022 include a net credit of $70 million pre tax ($52 million after tax) and $18 million pre tax ($13 million after tax), respectively, earnings for the three months ended September 30, 2021 include a charge of $264 million pre tax ($197 million after tax), and earnings for the nine months ended September 30, 2021 include charges totaling $772 million pre tax ($576 million after tax) for estimated probable losses on Georgia Power Company’s construction of Plant Vogtle Units 3 and 4. Further charges and credits may occur; however, the amount and timing are uncertain. Earnings for the three and nine months ended September 30, 2022 and 2021 also 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, net of salvage, totaling $10 million to $20 million annually through 2025. |
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(3) |
Earnings for the three and nine months ended September 30, 2022 include a $14 million pre-tax ($11 million after-tax) gain as a result of the early termination of the transition services agreement related to the 2019 sale of Gulf Power. Earnings for the three and nine months ended September 30, 2021 include a preliminary $121 million pre-tax ($93 million after-tax) gain on the sale of Sequent, as well as $85 million in additional tax expense resulting from the sale. Further impacts may result from future acquisition and disposition activities; however, the amount and timing of any such impacts are uncertain. |
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(4) |
Earnings for the three and nine months ended September 30, 2021 include results of the Wholesale Gas Services business. Presenting earnings and earnings per share excluding Wholesale Gas Services provided an additional measure of operating performance that excluded the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments. Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments. |
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(5) |
Earnings for the three and nine months ended September 30, 2021 include pre-tax impairment charges of $2 million ($9 million after tax) and $84 million ($67 million after tax), respectively, related to Southern Company Gas’ investment in the PennEast Pipeline project. Earnings for the nine months ended September 30, 2021 also include a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment. Southern Company Gas expects to record a pre-tax impairment charge totaling approximately $125 million ($95 million after tax) in the fourth quarter 2022 related to the pending sale of two natural gas storage facilities. Additional impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain. |
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Page 7 |
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Retail Sales |
6¢ |
13¢ |
|
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Retail Revenue Impacts |
11 |
32 |
|
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Weather |
2 |
13 |
|
|
Wholesale & Other Operating Revenues |
2 |
4 |
|
|
Non-Fuel O&M(*) |
(5) |
(19) |
|
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Depreciation and Amortization, Interest Expense, Other |
(4) |
(7) |
|
|
Income Taxes |
(1) |
(6) |
|
|
|
|
|
|
|
Southern Power |
2 |
5 |
|
|
Southern Company Gas |
2 |
7 |
|
|
Parent and Other |
(4) |
(9) |
|
|
Increase in Shares |
(3) |
(3) |
|
|
|
|
|
|
|
Estimated Loss on Plants Under Construction1 |
23 |
56 |
|
|
Acquisition and Disposition Impacts2 |
— |
1 |
|
|
Wholesale Gas Services3 |
— |
(2) |
|
|
Asset Impairments4 |
1 |
7 |
|
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|
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(*) Includes non-service cost-related benefits income |
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– See additional Notes on the following page. |
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Page 8 |
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(1) |
Earnings for the three and nine months ended September 30, 2022 include a net credit of $70 million pre tax ($52 million after tax) and $18 million pre tax ($13 million after tax), respectively, earnings for the three months ended September 30, 2021 include a charge of $264 million pre tax ($197 million after tax), and earnings for the nine months ended September 30, 2021 include charges totaling $772 million pre tax ($576 million after tax) for estimated probable losses on Georgia Power Company’s construction of Plant Vogtle Units 3 and 4. Further charges and credits may occur; however, the amount and timing are uncertain. Earnings for the three and nine months ended September 30, 2022 and 2021 also 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, net of salvage, totaling $10 million to $20 million annually through 2025. |
|
(2) |
Earnings for the three and nine months ended September 30, 2022 include a $14 million pre-tax ($11 million after-tax) gain as a result of the early termination of the transition services agreement related to the 2019 sale of Gulf Power. Earnings for the three and nine months ended September 30, 2021 include a preliminary $121 million pre-tax ($93 million after-tax) gain on the sale of Sequent, as well as $85 million in additional tax expense resulting from the sale. Further impacts may result from future acquisition and disposition activities; however, the amount and timing of any such impacts are uncertain. |
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(3) |
Earnings for the three and nine months ended September 30, 2021 include results of the Wholesale Gas Services business. Presenting earnings and earnings per share excluding Wholesale Gas Services provided an additional measure of operating performance that excluded the volatility resulting from mark-to-market and lower of weighted average cost or current market price accounting adjustments. Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments. |
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(4) |
Earnings for the three and nine months ended September 30, 2021 include pre-tax impairment charges of $2 million ($9 million after tax) and $84 million ($67 million after tax), respectively, related to Southern Company Gas’ investment in the PennEast Pipeline project. Earnings for the nine months ended September 30, 2021 also include a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment. Southern Company Gas expects to record a pre-tax impairment charge totaling approximately $125 million ($95 million after tax) in the fourth quarter 2022 related to the pending sale of two natural gas storage facilities. Additional impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain. |
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Page 9 |
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|
2021 |
Change |
|
2021 |
Change |
||||||
|
Retail Electric Revenues- |
|||||||||||
|
Fuel |
|
$ 1,186 |
$ 1,134 |
|
$ 2,899 |
$ 2,043 |
|||||
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Non-Fuel |
|
3,365 |
276 |
|
8,593 |
828 |
|||||
|
Wholesale Electric Revenues |
|
731 |
466 |
|
1,822 |
976 |
|||||
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Other Electric Revenues |
|
179 |
6 |
|
525 |
29 |
|||||
|
Natural Gas Revenues |
|
623 |
234 |
|
2,994 |
1,004 |
|||||
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Other Revenues |
|
154 |
24 |
|
513 |
6 |
|||||
|
|
|
6,238 |
2,140 |
|
17,346 |
4,886 |
|||||
|
Fuel and Purchased Power |
|
1,522 |
1,546 |
|
3,642 |
2,892 |
|||||
|
Cost of Natural Gas |
|
129 |
165 |
|
943 |
897 |
|||||
|
Cost of Other Sales |
|
71 |
21 |
|
255 |
20 |
|||||
|
Non-Fuel O&M |
|
1,446 |
101 |
|
4,257 |
364 |
|||||
|
Depreciation and Amortization |
|
896 |
26 |
|
2,658 |
70 |
|||||
|
Taxes Other Than Income Taxes |
|
312 |
40 |
|
969 |
104 |
|||||
|
Estimated Loss on Plant Vogtle Units 3 and 4 |
|
264 |
(334) |
|
772 |
(790) |
|||||
|
Gain on Dispositions, net |
|
(125) |
105 |
|
(179) |
126 |
|||||
|
|
|
4,515 |
1,670 |
|
13,317 |
3,683 |
|||||
|
Operating Income |
|
1,723 |
470 |
|
4,029 |
1,203 |
|||||
|
Allowance for Equity Funds Used During Construction |
|
49 |
10 |
|
140 |
23 |
|||||
|
Earnings from Equity Method Investments |
|
30 |
(2) |
|
35 |
74 |
|||||
|
Interest Expense, Net of Amounts Capitalized |
|
451 |
60 |
|
1,352 |
109 |
|||||
|
Other Income (Expense), net |
|
131 |
1 |
|
290 |
124 |
|||||
|
Income Taxes |
|
372 |
42 |
|
550 |
341 |
|||||
|
|
|
1,110 |
377 |
|
2,592 |
974 |
|||||
|
Dividends on Preferred Stock of Subsidiaries |
|
4 |
(1) |
|
11 |
(1) |
|||||
|
Net Income (Loss) Attributable to Noncontrolling Interests |
|
5 |
7 |
|
(27) |
(28) |
|||||
|
|
|
$ 1,101 |
$ 371 |
|
$ 2,608 |
$ 1,003 |
|||||
|
– Certain prior year data may have been reclassified to conform with current year presentation.
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Page 10 |
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2021 |
Change |
Weather |
|
2021 |
Change |
Weather |
||||||||
|
|
|||||||||||||||
|
Total Sales |
|
54,134 |
4.6 % |
|
146,576 |
7.0 % |
|||||||||
|
Total Retail Sales- |
|
40,441 |
2.6 % |
1.8 % |
|
109,747 |
3.6 % |
1.6 % |
|||||||
|
Residential |
|
14,063 |
2.9 % |
1.3 % |
|
36,941 |
4.6 % |
0.4 % |
|||||||
|
Commercial |
|
13,458 |
2.7 % |
2.0 % |
|
35,701 |
3.8 % |
2.0 % |
|||||||
|
Industrial |
|
12,762 |
2.2 % |
2.2 % |
|
36,632 |
2.6 % |
2.6 % |
|||||||
|
Other |
|
158 |
(6.2) % |
(6.3) % |
|
473 |
(5.0) % |
(5.0) % |
|||||||
|
Total Wholesale Sales |
|
13,693 |
10.4 % |
N/A |
|
36,829 |
17.2 % |
N/A |
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|
2021 |
Change |
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|
|
|||||||||||||||
|
Total Utility Customers- |
|
8,656 |
0.8 % |
||||||||||||
|
Total Traditional Electric |
|
4,373 |
1.1 % |
||||||||||||
|
Southern Company Gas |
|
4,283 |
0.4 % |
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Page 11 |
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|
2021 |
% Change |
|
2021 |
% Change |
||||||
|
|
|||||||||||
|
Operating Revenues |
|
$ 6,238 |
34.3 % |
|
$ 17,346 |
28.2 % |
|||||
|
Earnings Before Income Taxes |
|
1,482 |
28.3 % |
|
3,142 |
41.9 % |
|||||
|
Net Income Available to Common |
|
1,101 |
33.7 % |
|
2,608 |
38.5 % |
|||||
|
|
|||||||||||
|
Operating Revenues |
|
$ 1,904 |
28.4 % |
|
$ 5,019 |
20.0 % |
|||||
|
Earnings Before Income Taxes |
|
655 |
6.0 % |
|
1,566 |
6.0 % |
|||||
|
Net Income Available to Common |
|
499 |
5.2 % |
|
1,189 |
5.6 % |
|||||
|
|
|||||||||||
|
Operating Revenues |
|
$ 2,856 |
36.2 % |
|
$ 7,050 |
30.8 % |
|||||
|
Earnings Before Income Taxes |
|
649 |
67.0 % |
|
1,111 |
104.5 % |
|||||
|
Net Income Available to Common |
|
536 |
60.1 % |
|
1,030 |
79.7 % |
|||||
|
|
|||||||||||
|
Operating Revenues |
|
$ 378 |
34.9 % |
|
$ 988 |
29.5 % |
|||||
|
Earnings Before Income Taxes |
|
60 |
31.7 % |
|
155 |
21.3 % |
|||||
|
Net Income Available to Common |
|
50 |
24.0 % |
|
133 |
12.8 % |
|||||
|
|
|||||||||||
|
Operating Revenues |
|
$ 679 |
73.8 % |
|
$ 1,610 |
62.6 % |
|||||
|
Earnings Before Income Taxes |
|
92 |
55.4 % |
|
181 |
43.1 % |
|||||
|
Net Income Available to Common |
|
78 |
21.8 % |
|
211 |
25.6 % |
|||||
|
|
|||||||||||
|
Operating Revenues |
|
$ 623 |
37.6 % |
|
$ 2,994 |
33.5 % |
|||||
|
Earnings Before Income Taxes |
|
189 |
(41.8) % |
|
613 |
10.4 % |
|||||
|
Net Income Available to Common |
|
56 |
48.2 % |
|
389 |
32.6 % |
|||||
|
– See Financial Highlights pages for discussion of certain significant items occurring during the periods |
|||||||||||
View original content to download multimedia:https://www.prnewswire.com/news-releases/southern-company-reports-third-quarter-2022-earnings-301660819.html
SOURCE Southern Company
