Business Context and Reporting Period
This Form 8-K is a combined current report filed on November 1, 2017, by The Southern Company and six of its subsidiaries: Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Power Company, and Southern Company Gas. The filing announces the issuance of a press release and financial exhibits regarding earnings for the three-month and nine-month periods ended September 30, 2017.
Key Financial Metrics
The filing text itself does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These metrics are contained within the attached exhibits (Exhibits 99.01 through 99.07), which include GAAP earnings, earnings per share (EPS), and business segment information. The filing explicitly references the use of Non-GAAP financial measures to evaluate ongoing business performance.
Material Changes and Unusual Items
The filing highlights several significant items excluded from Non-GAAP earnings calculations to provide a clearer view of ongoing operations:
- Kemper IGCC Project: Charges for estimated losses related to Mississippi Power Company's integrated coal gasification combined cycle construction project in Kemper County, Mississippi.
- Southern Company Gas Acquisition: Costs related to the acquisition and integration of Southern Company Gas, as well as earnings from its Wholesale Gas Services business.
- Plant Scherer Unit 3: A write-down of Gulf Power Company's ownership of Plant Scherer Unit 3 for the nine-month period ended September 30, 2017.
- Project Schedule Extension: Additional equity return resulting from the Kemper IGCC schedule extension from August 31, 2016, through its suspension in June 2017.
Guidance, Outlook, and Management Commentary
Management states that the presentation of earnings excluding the items listed above is useful for investors to evaluate the performance of the company's ongoing business activities. Management also utilizes these adjusted figures for internal performance evaluation. The filing does not contain specific forward-looking guidance, risk factors, or contingencies beyond the disclosure of the aforementioned project-related charges and write-downs. The information is furnished but not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934.
Investor Verification Checklist
- Review Exhibit 99.01 (Press Release) and Exhibit 99.02 (Financial Highlights) for specific GAAP revenue, net income, and EPS figures.
- Examine Exhibit 99.03 and 99.04 to understand the dollar impact of the Kemper IGCC losses and Plant Scherer write-down on reported earnings.
- Verify the reconciliation between GAAP and Non-GAAP measures in the exhibits to assess the magnitude of the excluded items.
- Check Exhibit 99.06 for kilowatt-hour sales and customer count data to gauge operational volume.
- Confirm the status of the Kemper IGCC project suspension and its ongoing financial implications as detailed in the exhibits.