Business Context and Reporting Period
This Form 8-K is a combined current report filed on February 21, 2018, 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 reports earnings results for the three-month and twelve-month periods ended December 31, 2017.
Key Financial Metrics
The filing text references the issuance of a press release and exhibits containing detailed financial data, including GAAP and non-GAAP earnings and earnings per share (EPS). However, the specific numerical values for revenue, profit, cash flow, margins, debt, and liquidity are not provided in the text of this Form 8-K; they are contained in the attached exhibits (99.01 through 99.07).
Material Changes and Non-GAAP Adjustments
The company presents non-GAAP financial measures to exclude specific items impacting earnings for the periods ended December 31, 2017 and 2016. Material exclusions include:
- Charges for estimated losses related to Mississippi Power Company's Kemper County integrated coal gasification combined cycle (IGCC) project.
- Costs related to the acquisition and integration of Southern Company Gas.
- Earnings from the Wholesale Gas Services business of Southern Company Gas.
- A write-down of Gulf Power Company's ownership of Plant Scherer Unit 3 (twelve-month period only).
- Additional equity return resulting from the Kemper IGCC schedule extension and subsequent suspension.
- Costs relating to the pending dispositions of Elizabethtown Gas and Elkton Gas.
- The net tax benefit resulting from federal tax reform legislation.
Guidance, Outlook, and Management Commentary
Management states that the presentation of earnings excluding the items listed above is useful for evaluating the performance of ongoing business activities and is used internally for performance evaluation. The filing explicitly notes that these non-GAAP measures are not a substitute for GAAP financial measures. The text does not contain specific forward-looking guidance, risk factors, or contingency details beyond the reference to the attached exhibits.
Investor Verification Checklist
- Verify the specific GAAP and non-GAAP EPS figures in Exhibit 99.01 (Press Release) and Exhibit 99.04 (EPS Earnings Analysis).
- Review Exhibit 99.02 (Financial Highlights) for consolidated revenue, profit, and cash flow data.
- Examine Exhibit 99.03 to understand the quantitative impact of the Kemper IGCC project losses and federal tax reform benefits.
- Confirm the status and financial impact of the pending dispositions of Elizabethtown Gas and Elkton Gas in the exhibits.
- Check Exhibit 99.07 (Financial Overview) for segment-specific performance data for the six subsidiary registrants.