Business Context and Reporting Period
This Form 8-K is a combined current report filed on April 27, 2016, 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 three-month period ended March 31, 2016.
Key Financial Metrics
The filing text does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. These metrics are referenced as being contained within the attached exhibits (Exhibits 99.01 through 99.07), which are not included in the provided source text.
The report highlights the use of Non-GAAP financial measures to present earnings and earnings per share (EPS) excluding specific charges.
Material Changes and Unusual Items
The filing identifies two significant items impacting the financial presentation for the quarter ended March 31, 2016:
- Kemper IGCC Project: Estimated probable losses related to Mississippi Power Company's construction of the integrated coal gasification combined cycle facility in Kemper County, Mississippi. The filing states these losses significantly impacted GAAP earnings and EPS.
- Acquisition Costs: Costs related to the proposed acquisitions of AGL Resources Inc. and PowerSecure International, Inc. Management expects these costs to continue through the closing and integration phases.
Management notes that similar charges related to the Kemper IGCC may occur with uncertain frequency in the future.
Guidance, Outlook, and Management Commentary
Management utilizes Non-GAAP earnings and EPS (excluding the Kemper IGCC losses and acquisition costs) to evaluate the performance of ongoing business activities. The company asserts that presenting these adjusted figures provides investors with additional information to assess operational performance, though it is not a substitute for GAAP measures. No specific forward-looking guidance or quantitative outlook is provided in the text of this filing.
Investor Verification Checklist
- Verify the specific dollar amounts of the Kemper IGCC probable losses and acquisition costs in Exhibit 99.01 and 99.03.
- Review the GAAP vs. Non-GAAP reconciliation in Exhibit 99.04 to understand the magnitude of the adjustments.
- Examine Exhibit 99.02 for detailed financial highlights including revenue, net income, and cash flow figures.
- Assess the status and timeline of the proposed acquisitions of AGL Resources Inc. and PowerSecure International, Inc.
- Review segment-specific data in the exhibits for Alabama, Georgia, Gulf, Mississippi, and Southern Power Companies.