Business Context and Reporting Period
This Form 8-K is a combined current report filed on February 20, 2020, by The Southern Company and its subsidiaries: Alabama Power Company, Georgia Power Company, Mississippi Power Company, Southern Power Company, and Southern Company Gas. The filing reports earnings results for the three-month and twelve-month periods ended December 31, 2019.
Key Financial Metrics
The filing references attached exhibits (99.01 through 99.07) containing detailed financial data, including GAAP and non-GAAP earnings, earnings per share (EPS), kilowatt-hour sales, and customer counts. The text of this Form 8-K does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity; these figures are contained within the referenced exhibits.
Material Changes and Non-GAAP Adjustments
The company presents non-GAAP financial measures to exclude specific items impacting ongoing business evaluation. Material adjustments for the periods ended December 31, 2019 and 2018 include:
- Exclusion of acquisition, disposition, and integration impacts, including related impairment charges.
- Exclusion of charges, legal expenses, and tax impacts related to plants under construction.
- Exclusion of earnings from the Wholesale Gas Services business.
- For 2019: Exclusion of impairment charges associated with a natural gas storage facility and a leveraged lease investment.
- For 2018: Exclusion of settlement proceeds from Mississippi Power Company's claim regarding the 2010 Deepwater Horizon oil spill.
- For 2018: Exclusion of additional net tax benefits resulting from federal tax reform legislation.
Guidance, Outlook, and Risks
Concurrent with this filing, the company posted an earnings presentation to its investor relations website containing earnings guidance for 2020. The filing includes standard disclaimers stating that the information is not deemed "filed" under Section 18 of the Securities Exchange Act of 1934 and is not incorporated by reference into other filings unless expressly stated. The company asserts that non-GAAP measures are useful for evaluating ongoing business activities but are not a substitute for GAAP measures.
Investor Verification Checklist
- Verify specific revenue, net income, and EPS figures in Exhibit 99.01 (Press Release) and Exhibit 99.02 (Financial Highlights).
- Review the reconciliation of non-GAAP to GAAP measures in the exhibits to understand the magnitude of excluded items.
- Examine Exhibit 99.07 (Financial Overview) for details on debt levels, liquidity, and cash flow.
- Access the investor relations website to review the 2020 earnings guidance mentioned in Item 7.01.
- Confirm the impact of the Deepwater Horizon settlement and tax reform benefits on the 2018 comparative period.