Business Context and Reporting Period
This Form 8-K is a combined current report filed on October 28, 2009, by The Southern Company and its five subsidiaries: Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, and Southern Power Company. The filing reports earnings results for the periods ended September 30, 2009, including the three months and nine months ended on that date.
Key Financial Metrics
The filing text references the issuance of a press release and exhibits containing specific financial data but does not explicitly state the numerical values for revenue, profit, cash flow, margins, debt, or liquidity within the body of this document. Investors must refer to the attached exhibits (99.01 through 99.07) for specific figures.
- Reporting Period: Three and nine months ended September 30, 2009.
- Financial Measures: The company reports both GAAP earnings and Non-GAAP earnings excluding specific charges.
Material Changes and Unusual Items
The filing highlights significant non-recurring charges impacting earnings for the nine months ended September 30, 2009, and the comparable period in 2008:
- 2009 Impact: A significant charge related to a settlement agreement with MC Asset Recovery, LLC (MCAR) to resolve litigation arising from the 2003 bankruptcy of Mirant Corporation (a former subsidiary). Management states significant charges related to the Mirant spin-off are not expected to occur in the future.
- 2008 Impact: A significant charge related to the application of FASB Interpretation No. 48 and FASB Staff Position No. 13-2 regarding the tax treatment of investments in leveraged leases. Management states such charges are not expected to occur on a regular basis.
Guidance, Outlook, and Management Commentary
Management utilizes Non-GAAP financial measures (excluding the Mirant settlement and leveraged lease charges) to evaluate the performance of ongoing business activities. The company believes these adjusted figures provide investors with additional information to assess ongoing operations, though they are not a substitute for GAAP measures. The filing does not contain specific forward-looking guidance or risk factors beyond the context of the historical charges described.
Investor Verification Checklist
- Verify the specific dollar amounts of the MCAR settlement charge and the leveraged lease tax charge in Exhibit 99.03.
- Review the GAAP versus Non-GAAP earnings per share (EPS) reconciliation in Exhibit 99.01 and 99.02.
- Confirm the impact of these charges on the company's liquidity and debt covenants by reviewing the Consolidated Earnings (Exhibit 99.05) and Financial Overview (Exhibit 99.07).
- Check the segment-specific performance data for the five subsidiary registrants in the attached exhibits.