Business Context and Reporting Period
This Form 8-K is a combined current report filed on July 29, 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 financial results for the three months and six months ended June 30, 2009.
Key Financial Metrics
The filing text references the issuance of a press release and exhibits containing specific financial data (Exhibits 99.01 through 99.07) 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 for specific figures.
Material Changes and Unusual Items
The report highlights significant non-GAAP adjustments to earnings and earnings per share (EPS) for the periods ended June 30, 2009, and June 30, 2008:
- 2009 Period: Earnings were significantly impacted by a charge related to a settlement agreement with MC Asset Recovery, LLC (MCAR) to resolve litigation arising from the 2003 bankruptcy of Mirant Corporation. Management notes that significant charges related to the Mirant spin-off are not expected to occur in the future.
- 2008 Period: Earnings were impacted by 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 earnings and EPS excluding the Mirant settlement and leveraged lease charges to evaluate the performance of ongoing business activities. The company believes presenting these non-GAAP measures is useful for investors 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 historical context of the litigation and accounting charges.
Investor Verification Checklist
- Review Exhibit 99.01 (Press Release) and Exhibit 99.02 (Financial Highlights) for specific revenue, net income, and EPS figures.
- Verify the exact dollar amount of the MCAR settlement charge impacting the six months ended June 30, 2009.
- Confirm the specific impact of the FASB Interpretation No. 48 charge on the 2008 comparative period.
- Examine Exhibit 99.07 (Financial Overview) for details on liquidity, debt levels, and cash flow not provided in this summary text.