ATLANTA Southern Company (NYSE: SO) Chairman and Chief Executive Officer Bill Dahlberg, citing strong performance company-wide, today reported record earnings for 2000.
Southern Companys earnings from operations for the full year were $1.40 billion, or $2.13 per share, compared with $1.30 billion, or $1.90 per share, in 1999 a 12 percent increase in earnings per share.
This past year was another great one for Southern Company, Dahlberg said. While we were preparing to become a much different company in the future, we successfully executed our present strategy, and again met or exceeded our financial, operating and customer service goals.
The result is that in 2000 Southern Company continued to keep its promise to deliver value to shareholders, Dahlberg said.
After charges related to Southern Energy -- Southern Companys subsidiary with global and North American operations -- becoming a public company and other non-operating items, Southern Companys reported earnings were $1.31 billion, or $2.01 per share, compared with $1.28 billion, or $1.86 per share, in the previous year.
Southern Energy announced today it will become Mirant Corporation.
In October, Southern Energy, now Mirant, completed a successful initial public offering of 66.7 million shares of common stock, or 19.7 percent of the company. Total gross proceeds to Southern Energy from the IPO and a concurrent securities offering were $1.8 billion. Southern Companys management intends to seek approval from its Board of Directors for a complete spinoff of Mirant to Southern Company shareholders on or about April 2.
The spinoff must be approved by Southern Companys Board of Directors. The principal factors that the Board will consider in determining whether and when to complete the spinoff include: general market conditions and the relative market prices of Mirants common stock and of Southern Companys common stock; the receipt from the IRS of a supplemental ruling that the transaction will be tax-free to Southern Company and its shareholders and that the transaction will qualify as a tax-free distribution for U.S. tax purposes; receipt of necessary regulatory orders with terms and conditions acceptable to Southern Company; the absence of any court orders, regulations, adverse regulatory action or contractual restrictions prohibiting or restricting the completion of the spinoff; other conditions affecting Mirant or Southern Company; and certain modification of lending agreements that a number of banks have in place with Mirant.
In the fourth quarter of 2000, Southern Companys earnings from operations were $148 million, or 21 cents a share, compared with $143 million, or 22 cents a share, in the same period a year earlier.
After transition charges related to Mirant and other non-operating items, Southern Companys fourth quarter reported earnings were $112 million, or 16 cents a share, compared with $123 million, or 19 cents a share, in the same period in 1999.
Dahlberg said the strong results posted both by Southern Companys core operations in the Southeastern United States as well as by Mirant show that the foundation has been set for the companies to achieve success as separate entities each focusing on its core strengths and providing the opportunity for more appropriate valuations from the investment community.
We are creating two great companies from one, Dahlberg said. I believe each has an outstanding future.
Southern Companys strategy going forward will focus on growth in three major areas: its traditional retail business in the Southeast, competitive generation in the eight-state super Southeast and new products and services for energy customers. Southern Company last month received final regulatory approval to form a new subsidiary to own, manage and finance wholesale generating assets in the Southeast. Southern Company plans to develop or acquire more than 7,500 megawatts dedicated to the competitive wholesale business by 2005. Southern Company also plans to produce $50 million of annual earnings from new products and services within the next five years.
Our strategy going forward allows us to take our strengths as a company and match them with the considerable growth opportunities we see in the Southeast the region we know best, Dahlberg said.
Reviewing operations, Dahlberg said electricity use by retail customers in Southern Company`s traditional service area in the Southeastern United States increased 4.3 percent to 150.2 billion kilowatt-hours in 2000. In-home electricity needs were up 6.5 percent to 46.2 billion kilowatt-hours. Electricity consumption by commercial customers offices, stores and other non-manufacturing firms rose 6.6 percent to 46.2 billion kilowatt-hours. Industrial energy use increased 1.0 percent to 56.7 billion kilowatt-hours.
Total sales of electricity to Southern Companys customers in the Southeast, including sales to other utilities, increased 6.4 percent to 176.9 billion kilowatt-hours in 2000.
In conjunction with issuing this earnings announcement, Southern Company has posted on its Web site a package of detailed financial information on its fourth quarter and year-end performance. These materials are available at 7 a.m. Jan. 19.
Southern Companys financial analyst call will be at 11 a.m. EST Jan. 19, at which time Dahlberg and Chief Financial Officer W. Larry Westbrook will discuss earnings and provide a general business update. Investors, media and the public may listen to a live Webcast of the call. A replay of the Webcast will be available at the site for 10 days.
Southern Company is an international energy company that operates more than 48,000 megawatts of electric generating capacity worldwide. Southern Company has operations in 12 countries on five continents. Based in Atlanta, Southern Company is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Savannah Electric and Mirant. Southern Company also provides energy-related marketing, risk management and technical services in the United States and Europe and offers Southern LINC wireless telecommunications.
Note: Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the distribution of Southern Energy shares and the timing and results of that distribution, the strategic goals for Southern Companys new wholesale business, the potential for growth in the Southeast region and also Southern Companys earnings goals for its new products and services. Although Southern Company believes that this forward-looking information is accurate, its business is dependent on various regulatory issues, general economic conditions and future trends, and these factors can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company.
The following factors, in addition to those discussed in Southern Companys Annual Report on Form 10-K for the year ended December 31, 1999, and subsequent securities filings, could cause results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry and also changes in environmental and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing such laws; current and future litigation, including the EPA civil action against Alabama Power, Georgia Power and potentially other subsidiaries of Southern Company and the diversity litigation against certain subsidiaries of Southern Company; the effects of increased competition in the markets in which Southern Companys subsidiaries operate; the impact of fluctuations in commodity prices, interest rates and customer demand; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the effects of, and changes in, economic conditions in the areas in which Southern Companys subsidiaries operate; financial market conditions and the results of financing efforts; the timing and acceptance of Southern Companys new product and service offerings; the ability of Southern Company to obtain additional generating capacity at competitive prices; weather and other natural phenomena; unanticipated developments in the California power markets affecting Southern Energy and certain of its subsidiaries, including, but not limited to, unanticipated governmental intervention, deterioration in the financial condition of counterparties, default on receivables due, adverse results in current or future litigation and adverse changes in the tariffs of the California Power Exchange Corporation or the California Independent System Operator Corporation; and the ability of Southern Company to meet the conditions for the spinoff of Southern Energy, which include regulatory and other approvals.