Southern Company reports fourth-quarter and full-year 2021 results

Rhea-AI Summary

Southern Company reported a loss of $215 million, or 20 cents per share, in Q4 2021, down from a profit of $387 million in Q4 2020. Full-year earnings fell to $2.39 billion, or $2.26 per share, compared to $3.12 billion in 2020. Adjusted earnings for Q4 were $380 million, with operating revenues increasing by 12.7% to $5.8 billion. Despite these challenges, the company maintains a positive outlook, projecting 2022 adjusted earnings between $3.50 and $3.60 per share and long-term growth of 5% to 7%.

Positive

• Operating revenues increased by 12.7% to $5.8 billion in Q4 2021.
• Adjusted earnings guidance for 2022 is set between $3.50 and $3.60 per share.
• Management projects long-term adjusted earnings growth rate of 5% to 7%.

Negative

• Reported a loss of $215 million in Q4 2021, compared to a profit of $387 million in Q4 2020.
• Full-year earnings decreased to $2.39 billion from $3.12 billion in 2020.
• After-tax charges totaled $1.3 billion for the Vogtle units 3 and 4 construction.

ATLANTA, Feb. 17, 2022 /PRNewswire/ -- Southern Company today reported a fourth-quarter 2021 loss of $215 million, or 20 cents per share, compared with earnings of $387 million, or 37 cents per share, in the fourth quarter of 2020.  Southern Company also reported full-year 2021 earnings of $2.39 billion, or $2.26 per share, compared with earnings of $3.12 billion, or $2.95 per share, in 2020.

Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $380 million, or 36 cents per share, during the fourth quarter of 2021, compared with $497 million, or 47 cents per share, during the fourth quarter of 2020.  For the full-year 2021, excluding these items, Southern Company earned $3.62 billion, or $3.41 per share, compared with $3.44 billion, or $3.25 per share, for 2020.

Non-GAAP Financial Measures	Three Months Ended December			Year-to-Date December
Net Income - Excluding Items (in millions)	2021	2020		2021	2020
Net Income (Loss) - As Reported	$(215)	$387		$2,393	$3,119
Less:
Estimated Loss on Plants Under Construction	(924)	(177)		(1,703)	(328)
Tax Impact	235	45		433	84
Acquisition and Disposition Impacts	89	22		209	60
Tax Impact	22	(6)		(90)	(22)
Wholesale Gas Services	-	78		18	17
Tax Impact	-	(19)		(3)	(3)
Asset Impairments	-	(52)		(91)	(206)
Tax Impact	-	21		19	101
Loss on Extinguishment of Debt	(23)	(29)		(23)	(29)
Tax Impact	6	7		6	7
Net Income – Excluding Items	$380	$497		$3,618	$3,438
Average Shares Outstanding – (in millions)	1,062	1,058		1,061	1,058
Basic Earnings Per Share – Excluding Items	$0.36	$0.47		$3.41	$3.25

NOTE: For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package.

Adjusted earnings drivers for the full year 2021, as compared with 2020, were strong customer usage, as well as robust customer growth and constructive state regulatory actions. These impacts were partially offset by higher non-fuel operations and maintenance costs as the emerging economic recovery resulted in a continuing return to more normal business operations. Additionally, as reported earnings for 2021 were also significantly impacted by after-tax charges totaling $1.3 billion related to Georgia Power's construction of Plant Vogtle units 3 and 4.

Fourth-quarter 2021 operating revenues were $5.8 billion, compared with $5.1 billion for the fourth quarter of 2020, an increase of 12.7 percent. Operating revenues for the full year were $23.1 billion, compared with $20.4 billion in 2020, an increase of 13.4 percent. These increases were primarily due to higher fuel costs and the negative impacts of the COVID-19 pandemic on energy sales being more severe in 2020.

"2021 was an excellent year and we believe we are well-positioned to carry that momentum into 2022," said Chairman, President and CEO, Thomas A. Fanning. "We have a solid financial outlook for 2022 and beyond, driven by continued investment in our premier, state-regulated electric and gas utility franchises that continue to be among our industry's leaders for operational performance and customer satisfaction. As further evidence that we are poised for sustainable progress, we have been ranked number two in the United States in Forbes Magazine's 2022 list of America's Best Large Employers, based on input from our employees," added Fanning.

Southern Company's adjusted earnings guidance range for 2022 is $3.50 to $3.60 per share. In the first quarter of 2022, management estimates Southern Company adjusted earnings per share will be 90 cents. Management continues to project a long-term adjusted earnings per share growth rate for Southern Company in the 5% to 7% range, consistent with adjusted earnings in a range of $4.00 to $4.30 per share in 2024.

Southern Company's fourth-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 Daniel S. Tucker will discuss earnings and provide a general business update, including an update on the Vogtle units 3 and 4 construction project and earnings guidance. Investors, media and the public may listen to a live webcast of the call and view associated slides at https://investor.southerncompany.com/events-and-presentations/default.aspx. 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.

Forward-Looking Non-GAAP Financial Information

This release includes projected adjusted earnings per share for future periods excluding: additional acquisition and disposition impacts, any future charges associated with Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi and/or the construction of Plant Vogtle Units 3 and 4, any future asset impairment charges and additional costs associated with the extinguishment of debt at Southern Company and its non-state regulated subsidiaries. Information concerning the magnitude of the impacts, if any, from these items on earnings per share is not available at this time. Accordingly, this release does not include a quantitative reconciliation of projected adjusted earnings per share (which is a forward-looking non-GAAP financial measure) because doing so would involve unreasonable efforts.

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, earnings guidance and the financial outlook for 2022 and beyond. 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 Reports on Form 10-K for the year ended December 31, 2021 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 tax, environmental 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; the potential effects of the continued COVID-19 pandemic; the extent and timing of costs and legal requirements related to coal combustion residuals; current and future litigation or regulatory investigations, proceedings, or inquiries, including litigation and other disputes related to the Kemper County energy facility; the effects, extent, and timing of the entry of additional competition in the markets in which Southern Company's subsidiaries operate, including from the development and deployment of alternative energy sources; variations in demand for electricity and natural gas; available sources and costs of natural gas and other fuels; the ability to complete necessary or desirable pipeline expansion or infrastructure projects, limits on pipeline capacity, and operational interruptions to natural gas distribution and transmission activities; transmission constraints; effects of inflation; the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle Units 3 and 4 (which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale) and Plant Barry Unit 8 due to current and/or future challenges which include but are not limited to, changes in labor costs, availability and productivity, challenges with management of contractors or vendors, subcontractor performance, adverse weather conditions, shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor, contractor or supplier delay, delays due to judicial or regulatory action, nonperformance under construction, operating, or other agreements, operational readiness, including specialized operator training and required site safety programs, engineering or design problems or any remediation related thereto, design and other licensing-based compliance matters, including, for nuclear units, inspections and the timely submittal by Southern Nuclear of the Inspections, Tests, Analyses, and Acceptance Criteria documentation for each unit and the related investigations, reviews and approvals by the U.S. Nuclear Regulatory Commission ("NRC") necessary to support NRC authorization to load fuel, challenges with start-up activities, including major equipment failure or system integration, and/or operational performance; and challenges related to the COVID-19 pandemic; the ability to overcome the current challenges at Plant Vogtle Units 3 and 4, that could further impact the cost and schedule for the project; legal proceedings and regulatory approvals and actions related to construction projects, such as Plant Vogtle Units 3 and 4, Plant Barry Unit 8, including Public Service Commission approvals and Federal Energy Regulatory Commission and NRC actions; under certain specified circumstances, a decision by holders of more than 10% of the ownership interests of Plant Vogtle Units 3 and 4 not to proceed with construction and the ability of other Vogtle owners to tender a portion of their ownership interests to Georgia Power following certain construction cost increases; in the event Georgia Power becomes obligated to provide funding to Municipal Electric Authority of Georgia ("MEAG") with respect to the portion of MEAG's ownership interest in Plant Vogtle Units 3 and 4 involving Jacksonville Electric Authority, any inability of Georgia Power to receive repayment of such funding; the ability to construct facilities in accordance with the requirements of permits and licenses (including satisfaction of NRC requirements), 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 the employee and retiree benefit plans and nuclear decommissioning trust funds; advances in technology, including the pace and extent of development of low- to no carbon energy technologies and negative carbon concepts; performance of counterparties under ongoing renewable energy partnerships and development agreements; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to return on equity, equity ratios, additional generating capacity and fuel and other cost recovery mechanisms; the ability to successfully operate the electric utilities' generating, transmission, and distribution facilities, Southern Power Company's generation facilities and Southern Company Gas' natural gas distribution and storage facilities and the successful performance of necessary corporate functions; the inherent risks involved in operating and constructing nuclear generating facilities; the inherent risks involved in transporting and storing natural gas; 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 the Southern Company system's business resulting from cyber intrusion or physical attack and the threat of physical attacks; interest rate fluctuations and financial market conditions and the results of financing efforts; access to capital markets and other financing sources; changes in Southern Company's and any of its subsidiaries' credit ratings; the replacement of LIBOR with an alternative reference rate; the ability of Southern Company's electric utilities to obtain additional generating capacity (or sell excess generating capacity) at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, political unrest 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, natural gas pipeline infrastructure, or operation of generating or storage resources; impairments of goodwill or long-lived assets; and the effect of accounting pronouncements issued periodically by standard-setting bodies. Southern Company expressly disclaims any obligation to update any forward-looking information.

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Southern Company
Financial Highlights
(In Millions of Dollars Except Earnings Per Share)
	Three Months Ended December				Year-To-Date December
Net Income (Loss)–As Reported (See Notes)	2021		2020		2021		2020
Traditional Electric Operating Companies	$        (371)		$         306		$     1,981		$     2,877
Southern Power	55		26		266		238
Southern Company Gas	150		230		539		590
Total	(166)		562		2,786		3,705
Parent Company and Other	(49)		(175)		(393)		(586)
Net Income (Loss)–As Reported	$       (215)		$         387		$     2,393		$     3,119
Basic Earnings (Loss) Per Share1	$      (0.20)		$        0.37		$        2.26		$        2.95
Average Shares Outstanding (in millions)	1,062		1,058		1,061		1,058
End of Period Shares Outstanding (in millions)					1,060		1,056
Non-GAAP Financial Measures	Three Months Ended December				Year-To-Date December
Net Income–Excluding Items (See Notes)	2021		2020		2021		2020
Net Income (Loss)–As Reported	$        (215)		$         387		$     2,393		$     3,119
Less:
Estimated Loss on Plants Under Construction2	(924)		(177)		(1,703)		(328)
Tax Impact	235		45		433		84
Acquisition and Disposition Impacts3	89		22		209		60
Tax Impact	22		(6)		(90)		(22)
Wholesale Gas Services4	—		78		18		17
Tax Impact	—		(19)		(3)		(3)
Asset Impairments5	—		(52)		(91)		(206)
Tax Impact	—		21		19		101
Loss on Extinguishment of Debt6	(23)		(29)		(23)		(29)
Tax Impact	6		7		6		7
Net Income–Excluding Items	$         380		$         497		$     3,618		$     3,438
Basic Earnings Per Share–Excluding Items	$        0.36		$        0.47		$        3.41		$        3.25
- See Notes on the following page.

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Southern Company
Financial Highlights
Notes
(1)	Dilution is not material in any period presented. Diluted earnings (loss) per share was $(0.20) and $2.24 for the three and twelve months ended December 31, 2021, respectively, and was $0.36 and $2.93 for the three and twelve months ended December 31, 2020, respectively.
(2)	Earnings for the three and twelve months ended December 31, 2021 include charges of $920 million pre tax ($686 million after tax) and $1.692 billion pre tax ($1.261 billion after tax), respectively, and earnings for the three and twelve months ended December 31, 2020 include charges of $176 million pre tax ($131 million after tax) and $325 million pre tax ($242 million after tax), respectively, for estimated probable losses 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 and twelve months ended December 31, 2021 and 2020 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.
(3)	Earnings for the three and twelve months ended December 31, 2021 primarily include a $93 million pre-tax  ($99 million after-tax) gain associated with the termination of a leasehold interest in assets associated with two leveraged lease projects and $16 million of income tax benefits recognized as the result of another leveraged lease investment disposition.  Earnings for the twelve months ended December 31, 2021 also include a $121 million pre-tax ($92 million after-tax) gain on the sale of Sequent, as well as $85 million of additional tax expense due to the resulting changes in state apportionment rates.  Earnings for the three and twelve months ended December 31, 2020 primarily include a $22 million pre-tax ($16 million after-tax) gain on the sale of Southern Company Gas' natural gas storage facility in Louisiana.  Earnings for the twelve months ended December 31, 2020 also 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 twelve months ended December 31, 2021 and earnings for the three and twelve months ended December 31, 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.  Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments.
(5)	Earnings for the twelve months ended December 31, 2021 include pre-tax impairment charges totaling $84 million ($67 million after tax) related to Southern Company Gas' investment in the PennEast Pipeline project and a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment.  Earnings for the three and twelve months ended December 31, 2020 include impairment charges related to two leveraged leases.  Impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain.
(6)	Earnings for the three and twelve months ended December 31, 2021 and 2020 include costs associated with the extinguishment of debt at Southern Company. Further costs may occur; however, the amount and timing of any such costs are uncertain.

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Southern Company
Significant Factors Impacting EPS
	Three Months Ended December						Year-To-Date December
	2021		2020		Change		2021		2020		Change
Earnings (Loss) Per Share–
As Reported1 (See Notes)	$ (0.20)		$   0.37		$  (0.57)		$   2.26		$   2.95		$  (0.69)
Significant Factors:
Traditional Electric Operating Companies					$  (0.64)						$  (0.85)
Southern Power					0.03						0.03
Southern Company Gas					(0.08)						(0.05)
Parent Company and Other					0.12						0.19
Increase in Shares					—						(0.01)
Total–As Reported					$  (0.57)						$  (0.69)
	Three Months Ended December						Year-To-Date December
Non-GAAP Financial Measures	2021		2020		Change		2021		2020		Change
Earnings Per Share–
Excluding Items (See Notes)	$   0.36		$   0.47		$  (0.11)		$   3.41		$   3.25		$    0.16
Total–As Reported					$  (0.57)						$  (0.69)
Less:
Estimated Loss on Plants Under Construction2					(0.53)						(0.96)
Acquisition and Disposition Impacts3					0.10						0.08
Wholesale Gas Services4					(0.06)						—
Asset Impairments5					0.03						0.03
Loss on Extinguishment of Debt6					—						—
Total–Excluding Items					$  (0.11)						$    0.16
- See Notes on the following page.

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Southern Company
Significant Factors Impacting EPS
Notes
(1)	Dilution is not material in any period presented. Diluted earnings (loss) per share was $(0.20) and $2.24 for the three and twelve months ended December 31, 2021, respectively, and was $0.36 and $2.93 for the three and twelve months ended December 31, 2020, respectively.
(2)	Earnings for the three and twelve months ended December 31, 2021 include charges of $920 million pre tax ($686 million after tax) and $1.692 billion pre tax ($1.261 billion after tax), respectively, and earnings for the three and twelve months ended December 31, 2020 include charges of $176 million pre tax ($131 million after tax) and $325 million pre tax ($242 million after tax), respectively, for estimated probable losses 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 and twelve months ended December 31, 2021 and 2020 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.
(3)	Earnings for the three and twelve months ended December 31, 2021 primarily include a $93 million pre-tax ($99 million after-tax) gain associated with the termination of a leasehold interest in assets associated with two leveraged lease projects and $16 million of income tax benefits recognized as the result of another leveraged lease investment disposition.  Earnings for the twelve months ended December 31, 2021 also include a $121 million pre-tax ($92 million after-tax) gain on the sale of Sequent, as well as $85 million of additional tax expense due to the resulting changes in state apportionment rates.  Earnings for the three and twelve months ended December 31, 2020 primarily include a $22 million pre-tax ($16 million after-tax) gain on the sale of Southern Company Gas' natural gas storage facility in Louisiana.  Earnings for the twelve months ended December 31, 2020 also 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 twelve months ended December 31, 2021 and earnings for the three and twelve months ended December 31, 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.  Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments.
(5)	Earnings for the twelve months ended December 31, 2021 include pre-tax impairment charges totaling $84 million ($67 million after tax) related to Southern Company Gas' investment in the PennEast Pipeline project and a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment.  Earnings for the three and twelve months ended December 31, 2020 include impairment charges related to two leveraged leases.  Impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain.
(6)	Earnings for the three and twelve months ended December 31, 2021 and 2020 include costs associated with the extinguishment of debt at Southern Company. Further costs may occur; however, the amount and timing of any such costs are uncertain.

	Page 9
	Southern Company
	EPS Earnings Analysis
	Description	Three Months Ended December 2021 vs. 2020		Year-To-Date December 2021 vs. 2020
	Retail Sales	5¢		15¢
	Retail Revenue Impacts	(1)		15
	Weather	(6)		(5)
	Wholesale & Other Operating Revenues	(1)		10
	Non-Fuel O&M(*)	(8)		(22)
	Depreciation and Amortization, Interest Expense, Other	1		2
	Income Taxes	(1)		(3)
	Total Traditional Electric Operating Companies	(11)¢		12¢
	Southern Power	3		5
	Southern Company Gas	—		2
	Parent and Other	(3)		(2)
	Increase in Shares	—		(1)
	Total Change in EPS (Excluding Items)	(11)¢		16¢
	Estimated Loss on Plants Under Construction1	(53)		(96)
	Acquisition and Disposition Impacts2	10		8
	Wholesale Gas Services3	(6)		—
	Asset Impairments4	3		3
	Loss on Extinguishment of Debt5	—		—
	Total Change in EPS (As Reported)	(57)¢		(69)¢
	(*) Includes non-service cost-related benefits income
	- See additional Notes on the following page.

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Southern Company
EPS Earnings Analysis
Notes
(1)	Earnings for the three and twelve months ended December 31, 2021 include charges of $920 million pre tax ($686 million after tax) and $1.692 billion pre tax ($1.261 billion after tax), respectively, and earnings for the three and twelve months ended December 31, 2020 include charges of $176 million pre tax ($131 million after tax) and $325 million pre tax ($242 million after tax), respectively, for estimated probable losses 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 and twelve months ended December 31, 2021 and 2020 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 twelve months ended December 31, 2021 primarily include a $93 million pre-tax  ($99 million after-tax) gain associated with the termination of a leasehold interest in assets associated with two leveraged lease projects and $16 million of income tax benefits recognized as the result of another leveraged lease investment disposition.  Earnings for the twelve months ended December 31, 2021 also include a $121 million pre-tax ($92 million after-tax) gain on the sale of Sequent, as well as $85 million of additional tax expense due to the resulting changes in state apportionment rates.  Earnings for the three and twelve months ended December 31, 2020 primarily include a $22 million pre-tax ($16 million after-tax) gain on the sale of Southern Company Gas' natural gas storage facility in Louisiana.  Earnings for the twelve months ended December 31, 2020 also 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 twelve months ended December 31, 2021 and earnings for the three and twelve months ended December 31, 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.  Amounts subsequent to the July 1, 2021 sale of Sequent represent final income adjustments.
(4)	Earnings for the twelve months ended December 31, 2021 include pre-tax impairment charges totaling $84 million ($67 million after tax) related to Southern Company Gas' investment in the PennEast Pipeline project and a pre-tax impairment charge of $7 million ($6 million after tax) related to a leveraged lease investment.  Earnings for the three and twelve months ended December 31, 2020 include impairment charges related to two leveraged leases.  Impairment charges may occur in the future; however, the amount and timing of any such charges are uncertain.
(5)	Earnings for the three and twelve months ended December 31, 2021 and 2020 include costs associated with the extinguishment of debt at Southern Company. Further costs may occur; however, the amount and timing of any such costs are uncertain.

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Southern Company
Consolidated Earnings
As Reported
(In Millions of Dollars)
	Three Months Ended December						Year-To-Date December
	2021		2020		Change		2021		2020		Change
Retail Electric Revenues-
Fuel	$  1,041		$      786		$      255		$  3,940		$  3,087		$      853
Non-Fuel	2,319		2,354		(35)		10,912		10,556		356
Wholesale Electric Revenues	633		472		161		2,455		1,945		510
Other Electric Revenues	193		188		5		718		672		46
Natural Gas Revenues	1,386		1,072		314		4,380		3,434		946
Other Revenues	195		245		(50)		708		681		27
Total Operating Revenues	5,767		5,117		650		23,113		20,375		2,738
Fuel and Purchased Power	1,346		965		381		4,988		3,766		1,222
Cost of Natural Gas	676		318		358		1,619		972		647
Cost of Other Sales	102		126		(24)		357		327		30
Non-Fuel O&M	1,833		1,628		205		6,088		5,413		675
Depreciation and Amortization	907		899		8		3,565		3,518		47
Taxes Other Than Income Taxes	321		302		19		1,290		1,234		56
Estimated Loss on Plant Vogtle Units 3 and 4	920		176		744		1,692		325		1,367
Impairment Charges	—		—		—		2		—		2
Gain on Dispositions, net	(7)		(26)		19		(186)		(65)		(121)
Total Operating Expenses	6,098		4,388		1,710		19,415		15,490		3,925
Operating Income (Loss)	(331)		729		(1,060)		3,698		4,885		(1,187)
Allowance for Equity Funds Used During Construction	50		43		7		190		149		41
Earnings from Equity Method Investments	41		48		(7)		76		153		(77)
Interest Expense, Net of Amounts Capitalized	485		478		7		1,837		1,821		16
Impairment of Leveraged Leases	—		52		(52)		7		206		(199)
Other Income (Expense), net	159		17		142		456		336		120
Income Taxes (Benefit)	(283)		(50)		(233)		267		393		(126)
Net Income (Loss)	(283)		357		(640)		2,309		3,103		(794)
Dividends on Preferred Stock of Subsidiaries	4		4		—		15		15		—
Net Loss Attributable to Noncontrolling Interests	(72)		(34)		(38)		(99)		(31)		(68)
NET INCOME (LOSS) ATTRIBUTABLE TO SOUTHERN COMPANY	$     (215)		$      387		$     (602)		$  2,393		$  3,119		$     (726)

Notes

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

Page 12
Southern Company
Kilowatt-Hour Sales and Customers
(In Millions of KWHs)
	Three Months Ended December								Year-To-Date December
	2021		2020		Change		Weather Adjusted Change		2021		2020		Change		Weather Adjusted Change
Kilowatt-Hour Sales-
Total Sales	46,804		45,315		3.3 %				193,380		186,225		3.8 %
Total Retail Sales-	33,623		33,823		(0.6) %		2.5 %		143,370		140,546		2.0 %		2.4 %
Residential	10,441		10,987		(5.0) %		2.6 %		47,382		47,472		(0.2) %		0.5 %
Commercial	10,938		10,824		1.1 %		3.1 %		46,639		45,434		2.7 %		3.2 %
Industrial	12,092		11,853		2.0 %		2.0 %		48,724		46,982		3.7 %		3.7 %
Other	152		159		(4.6) %		(4.6) %		625		658		(5.1) %		(5.1) %
Total Wholesale Sales	13,181		11,492		14.7 %		N/A		50,010		45,679		9.5 %		N/A
(In Thousands of Customers)
									Period Ended December
									2021		2020		Change
Regulated Utility Customers-
Total Utility Customers-									8,722		8,630		1.1%
Total Traditional Electric									4,385		4,322		1.5%
Southern Company Gas									4,337		4,308		0.7%

Page 13
Southern Company
Financial Overview
As Reported
(In Millions of Dollars)
	Three Months Ended December						Year-To-Date December
	2021		2020		% Change		2021		2020		% Change
Southern Company –
Operating Revenues	$    5,767		$    5,117		12.7 %		$ 23,113		$ 20,375		13.4 %
Earnings (Loss) Before Income Taxes	(566)		307		N/M		2,576		3,496		(26.3) %
Net Income (Loss) Available to Common	(215)		387		N/M		2,393		3,119		(23.3) %
Alabama Power –
Operating Revenues	$    1,394		$    1,385		0.6 %		$    6,413		$    5,830		10.0 %
Earnings Before Income Taxes	59		162		(63.6) %		1,625		1,502		8.2 %
Net Income Available to Common	49		128		(61.7) %		1,238		1,150		7.7 %
Georgia Power –
Operating Revenues	$    2,210		$    1,938		14.0 %		$    9,260		$    8,309		11.4 %
Earnings (Loss) Before Income Taxes	(695)		118		N/M		416		1,727		(75.9) %
Net Income (Loss) Available to Common	(446)		164		N/M		584		1,575		(62.9) %
Mississippi Power –
Operating Revenues	$        334		$        277		20.6 %		$    1,322		$    1,172		12.8 %
Earnings Before Income Taxes	25		8		N/M		180		166		8.4 %
Net Income Available to Common	26		14		85.7 %		159		152		4.6 %
Southern Power –
Operating Revenues	$        606		$        396		53.0 %		$    2,216		$    1,733		27.9 %
Earnings (Loss) Before Income Taxes	(27)		(32)		(15.6) %		154		210		(26.7) %
Net Income Available to Common	55		26		111.5 %		266		238		11.8 %
Southern Company Gas –
Operating Revenues	$    1,386		$    1,072		29.3 %		$    4,380		$    3,434		27.5 %
Earnings Before Income Taxes	201		305		(34.1) %		814		763		6.7 %
Net Income Available to Common	150		230		(34.8) %		539		590		(8.6) %

N/M - Not Meaningful

Notes

- See Financial Highlights pages for discussion of certain significant items occurring during the periods

 

 

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SOURCE Southern Company

FAQ

What were Southern Company's Q4 2021 earnings results for stock symbol SO?

Southern Company reported a Q4 2021 loss of $215 million, or 20 cents per share.

How did Southern Company's earnings for 2021 compare to 2020 for stock symbol SO?

Full-year earnings for 2021 were $2.39 billion, down from $3.12 billion in 2020.

What is Southern Company's adjusted earnings guidance for 2022 under stock symbol SO?

The adjusted earnings guidance for 2022 is between $3.50 and $3.60 per share.

What increase did Southern Company report in operating revenues for Q4 2021 for stock symbol SO?

Operating revenues for Q4 2021 increased by 12.7% to $5.8 billion.

What long-term earnings growth rate does Southern Company project for stock symbol SO?

Southern Company projects a long-term adjusted earnings growth rate of 5% to 7%.