Southern Company reports first-quarter 2023 earnings

ATLANTA, April 27, 2023 /PRNewswire/ -- Southern Company today reported first-quarter earnings of $862 million, or 79 cents per share, in 2023 compared with earnings of $1.03 billion, or 97 cents per share, in the first quarter of 2022.

Excluding the items described under "Net Income – Excluding Items" in the table below, Southern Company earned $867 million, or 79 cents per share, during the first quarter of 2023, compared with $1.03 billion, or 97 cents per share, during the first quarter of 2022.

Non-GAAP Financial Measures


Three Months Ended March


Net Income - Excluding Items (in millions)


2023

2022


Net Income - As Reported


$862

$1,032


Less:





   Estimated Loss on Plants Under Construction


(2)

(1)


  Tax Impact


1

-


   Loss on Extinguishment of Debt


(5)

-


       Tax Impact


1

-


Net Income – Excluding Items


$867

$1,033


       Average Shares Outstanding – (in millions)                     


1,091

1,063


Basic Earnings Per Share – Excluding Items


$0.79

$0.97


 

NOTE: For more information regarding these non-GAAP adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package.

Adjusted earnings drivers for the first quarter 2023, as compared with 2022, were increased depreciation and amortization, milder weather and higher interest expense, partially offset by higher revenues associated with rates and pricing at the company's regulated utilities.

First-quarter 2023 operating revenues were $6.5 billion, compared with $6.6 billion for the first quarter of 2022, a decrease of 2.5 percent.

"Southern Company delivered a solid start to 2023 despite the mildest weather on record for a first quarter in the Southeastern United States," said President Christopher C. Womack. Added Womack, "We are encouraged by continued strong residential customer growth in both the electric and gas sectors, as well as healthy economies and a robust economic development pipeline in our service footprint."

Southern Company's first-quarter earnings slides with supplemental financial information are available at http://investor.southerncompany.com.

Southern Company's financial analyst call will begin at 1 p.m. Eastern Time today, during which Womack and Chief Financial Officer Daniel S. Tucker will discuss earnings and provide a general business update. Investors, media and the public may listen to a live webcast of the call and view associated slides at http://investor.southerncompany.com. A replay of the webcast will be available on the site for 12 months.

About Southern Company

Southern Company (NYSE: SO) is a leading energy provider serving 9 million customers across the Southeast and beyond through its family of companies. Providing clean, safe, reliable and affordable energy with excellent service is our mission. The company has electric operating companies in three states, natural gas distribution companies in four states, a competitive generation company, a leading distributed energy distribution company with national capabilities, a fiber optics network and telecommunications services. Through an industry-leading commitment to innovation, resilience and sustainability, we are taking action to meet customers' and communities' needs while advancing our goal of net zero greenhouse gas emissions by 2050. Our uncompromising values ensure we put the needs of those we serve at the center of everything we do and are the key to our sustained success. We are transforming energy into economic, environmental and social progress for tomorrow. Our corporate culture and hiring practices have earned the company national awards and recognition from numerous organizations, including Forbes, The Military Times, DiversityInc, Black Enterprise, J.D. Power, Fortune, Human Rights Campaign and more. To learn more, visit www.southerncompany.com.

 


Southern Company

Financial Highlights

(In Millions of Dollars Except Earnings Per Share)






Three Months Ended March

Net Income–As Reported (See Notes)

2023


2022

  Traditional Electric Operating Companies

$                     610


$                     774

  Southern Power

102


72

Southern Company Gas

309


319

  Total

1,021


1,165

  Parent Company and Other

(159)


(133)

  Net Income–As Reported

$                     862


$                 1,032





  Basic Earnings Per Share1

$                    0.79


$                    0.97

  Average Shares Outstanding (in millions)

1,091


1,063

  End of Period Shares Outstanding (in millions)

1,090


1,063






Non-GAAP Financial Measures

Three Months Ended March

Net Income–Excluding Items (See Notes)

2023


2022

  Net Income–As Reported

$                     862


$                 1,032

Less:




Estimated Loss on Plants Under Construction2

(2)


(1)

Tax Impact

1


Loss on Extinguishment of Debt3

(5)


Tax Impact

1


  Net Income–Excluding Items

$                     867


$                 1,033





  Basic Earnings Per Share–Excluding Items

$                    0.79


$                    0.97

- See Notes on the following page.

 

Southern Company

Financial Highlights


Notes

(1)

Dilution is not material in any period presented. Diluted earnings per share was $0.79 and $0.97 for the three months ended March 31, 2023 and 2022, respectively.



(2)

Earnings for the three months ended March 31, 2023 and 2022 also include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, net of salvage, totaling approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 



(3)

Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.

 

Southern Company

Significant Factors Impacting EPS








Three Months Ended March


2023


2022


Change

Earnings Per Share–






As Reported1 (See Notes)

$          0.79


$          0.97


$           (0.18)







  Significant Factors:






  Traditional Electric Operating Companies





$           (0.16)

Southern Power





0.03

Southern Company Gas





(0.01)

Parent Company and Other





(0.02)

Increase in Shares





(0.02)

  Total–As Reported





$           (0.18)









Three Months Ended March

Non-GAAP Financial Measures

2023


2022


Change

Earnings Per Share–






Excluding Items (See Notes)

$          0.79


$          0.97


$           (0.18)







  Total–As Reported





$           (0.18)

Less:






Estimated Loss on Plants Under Construction2





Loss on Extinguishment of Debt3





  Total–Excluding Items





$           (0.18)

- See Notes on the following page.

 

Southern Company

Significant Factors Impacting EPS


Notes

(1)

Dilution is not material in any period presented. Diluted earnings per share was $0.79 and $0.97 for the three months ended March 31, 2023 and 2022, respectively.



(2)

Earnings for the three months ended March 31, 2023 and 2022 also include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, net of salvage, totaling approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 



(3)

Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.

 

Southern Company

EPS Earnings Analysis

Three Months Ended March 2023 vs. March 2022



Description

Cents



Retail Sales



Retail Revenue Impacts

7



Weather

(11)



Wholesale & Other Operating Revenues

3



Non-Fuel O&M(*)

2



Depreciation and Amortization

(14)



Interest Expense and Other

(5)



Income Taxes

1



Total Traditional Electric Operating Companies

(16)¢



Southern Power

3



Southern Company Gas

(1)



Parent Company and Other

(2)



Increase in Shares

(2)



Total Change in EPS (Excluding Items)

(18)¢



Estimated Loss on Plants Under Construction1



Loss on Extinguishment of Debt2



Total Change in EPS (As Reported)

(18)¢

(*) Includes non-service cost-related benefits income.


- See additional Notes on the following page.


 

Southern Company

EPS Earnings Analysis


Notes

(1)

Earnings for the three months ended March 31, 2023 and 2022 also include charges (net of salvage proceeds), associated legal expenses (net of insurance recoveries), and tax impacts related to Mississippi Power Company's integrated coal gasification combined cycle facility project in Kemper County, Mississippi.  Mississippi Power Company expects to incur additional pre-tax period costs to complete dismantlement of the abandoned gasifier-related assets and site restoration activities, including related costs for compliance and safety, asset retirement obligation accretion, and property taxes, net of salvage, totaling approximately $15 million annually through 2025. Additionally, further charges and credits related to estimated probable losses on Georgia Power Company's construction of Plant Vogtle Units 3 and 4 may occur; however, the amount and timing are uncertain. 



(2)

Earnings for the three months ended March 31, 2023 include costs associated with the extinguishment of debt at Southern Company.  Similar transaction costs may occur in the future at Southern Company or one of its unregulated subsidiaries; however, the amount and timing of any such costs are uncertain.

 

Southern Company

Consolidated Earnings

As Reported

(In Millions of Dollars)








Three Months Ended March


2023


2022


Change

Retail Electric Revenues-






Fuel

$       1,050


$       1,014


$              36

Non-Fuel

2,549


2,599


(50)

Wholesale Electric Revenues

599


664


(65)

Other Electric Revenues

190


177


13

Natural Gas Revenues

1,875


2,058


(183)

Other Revenues

217


136


81

Total Operating Revenues

6,480


6,648


(168)

Fuel and Purchased Power

1,292


1,343


(51)

Cost of Natural Gas

898


1,095


(197)

Cost of Other Sales

127


69


58

Non-Fuel O&M

1,482


1,516


(34)

Depreciation and Amortization

1,111


892


219

Taxes Other Than Income Taxes

394


372


22

Gain on Dispositions, net

(42)


(23)


(19)

Total Operating Expenses

5,262


5,264


(2)

Operating Income

1,218


1,384


(166)

Allowance for Equity Funds Used During Construction

65


51


14

Earnings from Equity Method Investments

48


46


2

Interest Expense, Net of Amounts Capitalized

582


462


120

Other Income (Expense), net

147


145


2

Income Taxes

97


173


(76)

Net Income

799


991


(192)

Dividends on Preferred Stock of Subsidiaries


4


(4)

Net Loss Attributable to Noncontrolling Interests

(63)


(45)


(18)

NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY

$           862


$       1,032


$         (170)


Notes

- Certain prior year data may have been reclassified to conform with current year presentation.

 

Southern Company

Kilowatt-Hour Sales and Customers

(In Millions of KWHs)










Three Months Ended March


2023


2022


Change


Weather
Adjusted
Change

Kilowatt-Hour Sales-








Total Sales

46,725


48,728


(4.1) %











Total Retail Sales-

33,382


35,155


(5.0) %


0.4 %

Residential

10,630


12,103


(12.2) %


1.2 %

Commercial

10,883


10,987


(0.9) %


1.8 %

Industrial

11,724


11,912


(1.6) %


(1.6) %

Other

145


153


(4.9) %


(4.0) %









Total Wholesale Sales

13,343


13,573


(1.7) %


N/A

















(In Thousands of Customers)










Period Ended March




2023


2022


Change



Regulated Utility Customers-








Total Utility Customers-

8,824


8,755


0.8 %



Total Traditional Electric

4,449


4,397


1.2 %



Southern Company Gas

4,375


4,358


0.4 %



 

Southern Company

Financial Overview

As Reported

(In Millions of Dollars)








Three Months Ended March


2023


2022


% Change

Southern Company –






Operating Revenues

$        6,480


$        6,648


(2.5) %

Earnings Before Income Taxes

896


1,164


(23.0) %

Net Income Available to Common

862


1,032


(16.5) %







Alabama Power –






Operating Revenues

$        1,647


$        1,649


(0.1) %

Earnings Before Income Taxes

253


458


(44.8) %

Net Income Available to Common

255


347


(26.5) %







Georgia Power –






Operating Revenues

$        2,176


$        2,208


(1.4) %

Earnings Before Income Taxes

349


415


(15.9) %

Net Income Available to Common

296


385


(23.1) %







Mississippi Power –






Operating Revenues

$            390


$            335


16.4 %

Earnings Before Income Taxes

71


50


42.0 %

Net Income Available to Common

58


42


38.1 %







Southern Power –






Operating Revenues

$            508


$            539


(5.8) %

Earnings Before Income Taxes

32


15


113.3 %

Net Income Available to Common

102


72


41.7 %







Southern Company Gas –






Operating Revenues

$        1,875


$        2,058


(8.9) %

Earnings Before Income Taxes

412


416


(1.0) %

Net Income Available to Common

309


319


(3.1) %


Notes

- See Financial Highlights pages for discussion of certain significant items occurring during the periods.

 

SOURCE Southern Company

For further information: Media, Southern Company Media Relations, 404-506-5333 or 1-866-506-5333; Investor Relations, Scott Gammill, 404-506-0901, sagammil@southernco.com