Southern Company (the) · NYSE:SO
Southern Company (the) — The Southern Company — Q4 2024 Earnings Presentation
44 slides from Southern Company (the)'s earnings presentation, Feb 20, 2025
Slide 1: Fourth Quarter 2024 Earnings Conference Call
Fourth Quarter 2024 Earnings Conference Call February 20, 2025
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain information contained in this presentation is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, financial objectives, earning
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures In addition to including earnings per share (EPS) in accordance with generally accepted accounting principles (GAAP), this presentation also includes historical adjusted EPS excluding: (1) estimated loss on plants under construction, (2) acquisition and disposition impact
Slide 4: Highlighting Our Successes
Highlighting Our Successes 2024 Top U.S. Utility for Economic Energy Transition Development, Site Selection magazine – Award for Power, Alabama Power (6th consecutive year) & 2024 Platts Global Energy Awards Georgia Power (26th consecutive year) for excellence in generation, grid asset management, i
Slide 5: Strong 2024 Results and Durable Long-term Outlook
Strong 2024 2024 Adjusted earnings at the top of 2024 guidance range Results Earnings 2024 Adjusted EPS of $4.05 - 11% growth from 2023 adjusted EPS Electricity Robust economic development pipeline across footprint Sales ~10 GW of total committed projects improves sales outlook to 8% (’25-’29) Capex
Slide 6: State-regulated Electric Utilities: Premier Vertically-Integrated Franchises
State-regulated Electric Utilities: Premier Vertically-Integrated Franchises 4.5 Million Customers 8% Projected Retail Sales Growth 7% Projected Rate Base Growth A customer-focused Robust economic Investing in resiliency business model delivering development and a and a diverse resource clean, safe,
Slide 7: State-regulated Natural Gas Utilities: Premier Local Distribution Companies
State-regulated Natural Gas Utilities: Premier Local Distribution Companies 4.4 Million Customers 7% Projected Rate Base Growth Predictable Recovery A customer-focused Pipeline modernization Infrastructure investments business model delivering enhancing resilience and and operating costs clean, safe
Slide 8: Competitive Power Business: Disciplined, Long-Term Contract Model
Competitive Power Business: Disciplined, Long-Term Contract Model Today Potential Opportunities for Growth ➢ Capabilities across the U.S. ➢Demand-driven price increases as contracts renew ➢ 13 GW across 50+ facilities, 15 states ➢Uprates on natural gas fleet, repowering of existing Solar wind, oppor
Slide 9: Complementary, growing businesses: PowerSecure and Southern Telecom
Complementary, growing businesses that provide insights into data and energy-intensive customer needs PowerSecure is a leading Southern Telecom is a provider of distributed energy innovation company fiber and connectivity solutions ➢ Provides utility and energy technologies to commercial, industrial
Slide 10: 2024 Earnings Results
2024 Earnings Results Q4 YTD 2024 2023 2024 2023 Earnings Per Share As Reported $0.49 $0.78 $4.02 $3.64 Less: Estimated Loss on Plants Under Construction1 - $0.15 ($0.01) $0.03 Acquisition and Disposition Impacts2 - $0.03 - $0.03 Loss on Extinguishment of Debt3 - - - - Estimated Loss on QIP and Othe
Slide 11: 2024 Year-Over-Year Adjusted Drivers
2024 Year-Over-Year Adjusted Drivers1 53¢ 5¢ (2¢) (14¢) (2¢) $4.05 Southern Southern $3.65 Company Power Parent & Shares Other State-Regulated Gas Electrics 2024 Key Drivers + Investment in state-regulated utilities + Weather (+9¢ vs. normal) + Higher other revenues + Sales growth - Higher O&M - Hig
Slide 12: Retail electricity sales growth of +1%, adjusted for Hurricane Helene
Retail electricity sales growth of +1%, adjusted for Hurricane Helene ➢ Continued growth of residential customers ➢ Strong commercial sales • 57K+ residential electric customers • Data center usage up 17% (highest annual additions on record) ➢ Steady industrial usage led by gains in the pipeline • O
Slide 13: 150+ companies announced plans to locate/expand in Alabama, Georgia and Mississippi
150+ companies announced plans to locate/expand in Alabama, Georgia and Mississippi in 2024, representing over 20,000 jobs Recent Announcements Across Diversified Industries Robust Pipeline Growth Continues Company Type Location Total large-load pipeline over 50 GW through mid-2030s Amazon Fulfillme
Slide 14: $63B base capital investment plan: 95% at state-regulated utilities
$63B base capital investment plan: 95% at state-regulated utilities $14 billion or ~30% increase from previous 5-year total Base capital plan supports projected rate base growth of 7% and underpins 5% to 7% projected adjusted EPS growth $9.2B State-Regulated Gas (7% avg. annual rate base growth) • 6
Slide 15: Investing to deliver clean, safe, reliable and affordable energy
Investing to deliver clean, safe, reliable and affordable energy to customers State-Regulated Electric Utilities State-Regulated Gas Utilities $B $B $19.9 Growth $1.5 $12.0 Maintenance $0.6 $7.9 Resilience $3.1 $50.3B $5.1 Compliance $2.5 $9.2B 2025-2029 2025-2029 Capital Investment Plan $5.4 Other
Slide 16: Ongoing Georgia Power resource RFPs and 2025 IRP highlights
Ongoing Georgia Power resource RFPs Georgia Power’s 2025 IRP highlights plans to reliably and economically meet growth Seeking bids for ~13 GW of resources through 2031 Load Forecast 7% annual peak demand growth through ‘30/’31 (+2 GW need) (RFPs approved in prior IRP processes) 12% annual sales gro
Slide 17: Potential Regulated Capital Investment Opportunities Above Base Forecast
Potential Regulated Capital Investment Opportunities Above Base Forecast Potential Regulated ➢ Additional clarity likely by July 2025 Capital Investments $10B - $15B ➢ Potential to increase long-term state-regulated rate base growth to 8%+ Ongoing Georgia Power Resource RFPs Gas generation, renewabl
Slide 18: Committed to Strong Credit Quality
Committed to Strong Credit Quality Objective Target Plan Maintain a high degree of Credit-supportive business Average $800M of financial integrity and mix and credit metrics new equity and/or equity a strong investment-grade that provide a buffer equivalents per year credit profile against adversity
Slide 19: 2025 Adjusted EPS Guidance = $4.20 to $4.30
2025 Adjusted EPS Guidance1 = $4.20 to $4.30 >90% of projected earnings from premier state-regulated electric and gas franchises $0.09 $0.39 All Other ($0.80) $4.30 Competitive power, LDCs FERC-regulated to Parent $4.20 $0.52 pipelines, and other assets under long- term contract Q1 2025 Adjusted EPS
Slide 20: Southern Company Value Proposition
Southern Company Value Proposition: Objective of Regular, Predictable and Sustainable Strategy: Maximize long-term value to shareholders through a customer-, community-, and relationship-focused business model that produces sustainable levels of return for investors Objective of maintaining a high d
Slide 21: Appendix
Appendix 21
Slide 22: Capital Investment Plan
Capital Investment Plan 22
Slide 23: ~$63 Billion in Projected Capital Investment Through 2029: Functional View
~$63 Billion in Projected Capital Investment Through 2029 Functional View Total (in $ billions) 2025 2026 2027 2028 2029 '25-'29 New Generation 3.7 0.9 0.2 0.0 0.0 4.7 Generation Maintenance 1.3 1.4 1.2 1.0 1.2 6.1 Environmental Compliance 0.2 0.5 0.4 0.5 0.2 1.8 Pond Closures 0.7 0.7 0.5 0.5 0.8 3.
Slide 24: ~$63 Billion in Projected Capital Investment Through 2029: Company View
~$63 Billion in Projected Capital Investment Through 2029 Company View Total (in $ billions) 2025 2026 2027 2028 2029 '25-'29 Alabama Power 3.2 2.5 2.4 2.3 2.4 12.8 Georgia Power 8.9 6.8 6.2 6.8 6.9 35.5 Mississippi Power 0.3 0.4 0.3 0.3 0.3 1.7 State-regulated Electrics1 12.5 9.8 8.9 9.5 9.6 50.3 S
Slide 25: Capital Markets / Financing
Capital Markets / Financing 25
Slide 26: Long-term Debt Financings
Long-term Debt Financings1 as of February 20, 2025 Actual Projected Total Remaining Long-term Financings ($ in millions) YTD 2025 2025 2026 2027 2025-2027 Alabama Power 1,200 - 550 1,750 Georgia Power 3,600 1,400 2,600 7,600 Mississippi Power 100 100 75 275 State-Regulated Electrics - $4,900 $1,500
Slide 27: Long-term Debt Maturity Schedule
Long-term Debt Maturity Schedule1 as of February 20, 2025 Actual Projected Total Remaining Long-term Debt ($ in millions) YTD 2025 2025 2026 2027 2025-2027 Alabama Power 250 46 550 846 Georgia Power 831 424 986 2,241 Mississippi Power 11 65 9 85 2 State-Regulated Electrics - $1,171 $535 $1,545 $3,25
Slide 28: Liquidity and Credit
Liquidity and Credit as of December 31, 2024 Over $7.9 billion in committed credit facilities and available liquidity of $6.1 billion (in millions) 2025 2026 2027 2028 2029 Total Credit Facility Expirations $580 $665 $275 - $6,400 $7,920 Alabama Georgia Mississippi Southern Southern Parent (in milli
Slide 29: Long-term Debt Maturity Tower
Long-term Debt Maturity Tower1 as of February 20, 2025 $7,000 Long-term Debt1 Alabama Power $11.2B $6,000 Georgia Power $18.2B Mississippi Power $1.7B $5,000 Southern Company Gas Capital 2 $5.5B Nicor Gas $2.8B Southern Power $2.7B $4,000 Parent Company $22.1B 4176 500 Total Long-term Debt Maturitie
Slide 30: FFO to Debt Calculation
FFO to Debt Calculation Year-End 2024 Actual Numerator (using 2024 Form 10-K Statements of Cash Flow) (in millions) $9,788 • Net cash provided from operating activities 1,421 • Less: Changes in certain current assets and liabilities (566) • Less: Settlement of asset retirement obligations 185 • Less
Slide 31: State-Regulated Utilities
State-Regulated Utilities 31
Slide 32: State-regulated Electric Utilities Overview
State-regulated Electric Utilities Overview $94B Projected Capital Investment Composition $68B 2025 - 2029 (Consistent with Base Capital Investment Plan) 11% 2024 2025 2026 2027 2028 2029 10% 2024 2024 Invested Allowed Retail 39% Customers Capital1 Equity Ratio Georgia Power 2.8M $40B 56%2 $50B 16%
Slide 33: State-regulated Gas LDCs Overview
State-regulated Gas LDCs Overview $18B Projected Capital Investment Composition $13B 2025 - 2029 (Consistent with Base Capital Investment Plan) 16% 16% 2024 2025 2026 2027 2028 2029 2024 2024 Rate Allowed 7% Customers Base1 Equity Ratio Nicor Gas (IL) 2.3M $6B 50% $9B Atlanta Gas Light (GA) 1.7M $5B
Slide 34: Regulatory Recovery Mechanisms: Electric Subsidiaries
Regulatory Recovery Mechanisms: Electric Subsidiaries1 Annual base rate (Rate RSE) Three-year base rate case cycle Annual base rate (PEP-6) Base Rates and clause filings with annual compliance filings and clause filings Fuel ECR Fuel Rates Fuel Rates Purchased Power Energy ECR Fuel Rates Fuel Rates
Slide 35: Regulatory Recovery Mechanisms: Gas LDCs
Regulatory Recovery Mechanisms: Gas LDCs1 Rate Decoupling (Revenue Normalization)2 (Straight –Fixed –Variable) (Revenue Normalization)2 Weather Normalization Bad Debt Recovery3 Energy Efficiency Plan Recovery Annual Base Rate Adjustment Mechanisms (GRAM) (ARM) Infrastructure
Slide 36: Georgia Power 2025 IRP and RFP Timeline
Georgia Power 2025 IRP and RFP Timeline Link to access Commission Meetings and Hearings: Georgia Public Service Commission - YouTube Docket Numbers: 56002 (IRP) and 56003 (DSM) January 31, 2025 Georgia Power files IRP Update February 28, 2025 Georgia Power direct testimony filing March 25-28, 2025 G
Slide 37: Our Discipline Around Serving Load Growth
Our Discipline Around Serving Load Growth 37
Slide 38: We are well-positioned for the growth opportunity
We are well-positioned for the growth opportunity... Experience and Discipline • Deep understanding of Flexible Pricing Framework utility economics and marginal costs to serve • Existing PSC-approved • Decades of experience Institutional Wherewithal pricing frameworks with competition for new custom
Slide 39: Our long-standing approach helps ensure all customers benefit
...and our long-standing approach helps ensure all customers benefit The 3 key questions raised by stakeholders: Will the load materialize? Is the pricing appropriate? What protections are in place? Our robust load We employ robust models to A risk-adjusted load forecast, forecasting process ascerta
Slide 40: Our process for risk adjusting the electricity sales forecast
Our process for risk adjusting the electricity sales forecast Potential Selecting Early Selecting Selected a Potential Lower Load Electric Stages State SO Utility Delays Materialization Provider Forecast of Load to Serve Adjustments are based on experience and continuous engagement with customers 40
Slide 41: Sustainability
Sustainability ——__
Slide 42: Goal: Net-Zero Greenhouse Gas Emissions by 2050
Goal: Net-Zero Greenhouse Gas Emissions by 2050 Continued Deployment of Lower-Emitting Resources Total Scope 1 GHG emissions Annual energy mix* (based on equity share) 1% 49% 14% 14% Metric tons of C02e (millions) 157 Renewables/Other 16% 19% 79 Nuclear 49% 69% Natural Gas Coal 18% 2007 (Baseline) 2
Slide 43: Disclosures, Ratings, and Rankings Demonstrate Commitment and Progress
Disclosures, Ratings, and Rankings Demonstrate Commitment and Progress Scale Rating Letter grade CCC – AAA (best) A MSCI (2024) Score 0 – 10 (best) 5.8 Sustainalytics ESG Risk Rating (2024) 0 (best) – 100 28.1 ISS Governance Score (2024) 1 (best) – 10 1 Letter grade A GRESB (2024) Score 0 – 100 (bes
Slide 44: Investor Relations Contact Information
Gregory MacLeod Blake Dixon Investor Relations Director of Investor Relations Manager of Investor Relations Contact Information gbmacleo@southernco.com mbdixon@southernco.com