Southern Company (the) · NYSE:SO
Southern Company (the) — Q4 2010 Earnings Presentation
19 slides from Southern Company (the)'s earnings presentation, Jan 26, 2011
Slide 1: 4th Quarter 2010 Earnings Conference Call
4th Quarter 2010 Earnings Conference Call January 26, 2011
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, statements concerning custom
Slide 3: 2010 Accomplishments - Operational
2010 Accomplishments - Operational • Met record customer demand for electricity in 2010 • Industry leading Fossil/Hydro Peak Season EFOR of 1.67% • Completed 8 major environmental construction projects • Average scrubber cost 18% below the industry average • Highest distribution reliability performa
Slide 4: 2010 Accomplishments - Regulatory
2010 Accomplishments - Regulatory Alabama Power • Modified Natural Disaster Reserve (NDR) to allow additional accruals to offset or avoid future rate impacts Georgia Power • Three-year rate plan • Base revenues increase $562M in 2011 • Estimated increases of $190M in 2012 and $93M in 2013 • Allowed
Slide 5: 2010 Accomplishments - Financial
2010 Accomplishments - Financial • Issued $772M in new equity • Issued $3.1B in long-term debt • Average rate of 3.2% and average maturity of 15 years • Reached conditional agreement with DOE on $3.4B of loans to construct Vogtle 3&4 7
Slide 6: Reconciliation of Earnings Per Share Reported under GAAP
Reconciliation of Earnings Per Share Reported under GAAP 4Q10 4Q09 EPS as reported under GAAP $0.18 $0.31 2010 2009 EPS as reported under GAAP $2.37 $2.07 $202M settlement with MC Asset Recovery in 2009 $0.25 EPS excluding items $2.37 $2.32 9
Slide 7: Year-over-year EPS Drivers, Ex-Items
Year-over-year EPS Drivers, Ex-Items* 34¢ 2¢ -39¢ Other Revenue 23¢ -1¢ -4¢ NDR -10¢ 10¢ -4¢ Weather Non-Fuel AFUDC -3¢ O&M Taxes -3¢ D&A COR Southern -12¢ 8¢ Power Parent / Amortization Other $2.37 $2.32 Retail Shares Retail Revenue Sales Impacts Traditional Operating Companies +23¢ 2009 2010 10 *
Slide 8: 2010 Retail kWh Sales
2010 Retail kWh Sales 11.8% 7.7% 7.6% 3.7% As reported 2.0% Weather- 0.2% -0.6% normal Industrial Residential Commercial Total Retail Top 10 Growth Rate % 15% Industrial Segments Chemicals 2009 to 2010 10.4% • 2010 Industrial sales were 12% Paper 5.2% 92% of pre-recession levels 12% Non-Manufacturin
Slide 9: Projected 2011 Retail Sales Growth = 2.0%
Projected 2011 Retail Sales Growth = 2.0% Residential • Exports are continuing to Other – 1% 33% grow, driving demand for manufacturing Industrial Commercial • Residential and Commercial 32% 34% sales expected to improve over the course of the year 2.6% 1.9% 2.0% 1.6% Industrial Residential Commerci
Slide 10: Southern Company Economic Summit
Southern Company Economic Summit • Regional participants: • Chemicals, Steel, Clay & Glass, Railroads, Banking, Academia, and Economists • Industrial sector is leading economic recovery • Consumer spending remains tepid, but could see uplift from tax cut extensions and payroll tax deductions • Secon
Slide 11: '11-'13 Base Capital Expenditures = $14.4B
’11-’13 Base Capital Expenditures = $14.4B (in billions) '11-'13 Vogtle 3&4 $2.2 Ratcliffe IGCC* 2.0 McDonough CC's 0.4 Base Environmental 1.2 T&D Growth 1.8 Maintenance (G, T & D) 4.0 $4.9B $5.0B $4.5B Nuclear Fuel 0.9 General 0.7 Traditional OpCo $13.2 Southern Power 1.2 2011 2012 2013 Total $14.4
Slide 12: '11-'13 Capital Expenditures = $15.1B - $17.3B
’11-’13 Capital Expenditures = $15.1B - $17.3B $4.9B - $6.4B $5.2B - $5.7B Compliance = $0.7B-$2.9B $5.0B - $5.2B (Traditional OpCo’s) $0.5B - $2.0B Potential environmental $0.2B - $0.7B controls, replacement $0.1B - $0.3B generation capacity, and/or transmission upgrades. Compliance strategy will b
Slide 13: Financing Plan
Financing Plan Long-term security issuances (millions of $) 2011 2012 to 2013 Alabama $ 200 $ 600 - 900 Georgia 900 4,000 - 4,500 Gulf 200 250 - 350 Mississippi 375 1,200 - 1,250 Southern Power 400 275 - 375 Holding Company 0 350 - 400 Total $ 2,075 $ 6,675 - 7,775 • Issuance range primarily driven
Slide 14: EPS Growth
EPS Growth • 2010 guidance of $2.30-$2.36 is our baseline for EPS growth 7% $2.36 5% $2.30 2010 17
Slide 15: EPS Growth
EPS Growth • 2010 guidance of $2.30-$2.36 is our baseline for EPS growth • 2011 guidance = $2.48-$2.56 (8% over 2010 guidance) • Q1 Estimate = 47¢ Long-term $2.56 Growth = 5% to 7% $2.48 7% $2.36 5% $2.30 2010 2011 18
Slide 16: Southern Company Value Proposition
Southern Company Value Proposition We are focused on delivering premium risk-adjusted Total Shareholder Return Maintain a high degree of financial integrity and a low risk profile Premium Dividend Total ROE EPS Growth Growth Shareholder Return 19
Slide 17: Moving Forward
Moving Forward Vogtle & Ratcliffe National Energy Circle of Life Policy Smart Energy People 21
Slide 18: Appendix
Appendix 23
Slide 19: '11-'13 Base Capital Expenditure Forecast
’11-’13 Base Capital Expenditure Forecast (in billions) 2011 2012 2013 '11-'13 New Generation1,2 $1.6 $1.7 $1.3 $4.6 Base Environmental 0.3 0.4 0.4 1.2 T&D Growth 0.5 0.6 0.6 1.8 Maintenance (G, T & D) 1.3 1.3 1.4 4.0 Nuclear Fuel 0.3 0.3 0.3 0.9 General 0.2 0.2 0.3 0.7 Traditional OpCo3 $4.3 $4.6 $