Business Context and Reporting Period
This Form 8-K is a combined current report filed on February 22, 2017, by The Southern Company and six of its subsidiaries: Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Company Gas, and Southern Power Company. The filing references a press release and exhibits detailing earnings results for the three-month and twelve-month periods ended December 31, 2016.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These figures are contained within the attached exhibits (Exhibits 99.01 through 99.07), which are referenced but not included in the provided text. The report confirms the presentation of both GAAP and non-GAAP earnings and earnings per share (EPS) for the periods ended December 31, 2016, and 2015.
Material Changes and Non-GAAP Adjustments
Management presents non-GAAP financial measures to exclude specific items affecting ongoing business performance. Key adjustments include:
- Exclusion of estimated probable losses related to Mississippi Power Company's Kemper County integrated coal gasification combined cycle facility (Kemper IGCC).
- Exclusion of costs related to the acquisition and integration of Southern Company Gas (formerly AGL Resources Inc.).
- Exclusion of costs related to the acquisitions of PowerSecure International, Inc. and a 50% interest in Southern Natural Gas Company, L.L.C. (SNG).
- Exclusion of additional costs related to discontinued operations of Mirant Corporation and the March 2009 settlement with MC Asset Recovery, LLC (for the 2015 period).
- Exclusion of earnings related to the equity return on the Kemper IGCC schedule extension beyond August 31, 2016.
- Exclusion of debt financing costs and common stock issued to finance the SNG acquisition.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, specific management commentary on future outlook, or a detailed risk factor section within the provided text. The primary focus is the disclosure of historical results and the rationale for using non-GAAP measures to evaluate ongoing business activities. The text notes that the information is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934.
Investor Verification Checklist
- Verify specific GAAP and non-GAAP EPS and earnings figures in Exhibit 99.01 (Press Release) and Exhibit 99.02 (Financial Highlights).
- Review the reconciliation of non-GAAP measures to GAAP measures in the attached exhibits to understand the magnitude of excluded items.
- Examine Exhibit 99.03 and 99.04 for a detailed breakdown of significant factors impacting EPS.
- Check Exhibit 99.06 for kilowatt-hour sales and customer data to assess operational volume changes.
- Confirm the specific impact of the Kemper IGCC project losses on the consolidated financial statements.