Southern Company (the) · NYSE:SO
Southern Company (the) — The Southern Company — Q4 2021 Earnings Presentation
43 slides from Southern Company (the)'s earnings presentation, Feb 17, 2022
Slide 1: Fourth Quarter 2021 Earnings Conference Call
Fourth Quarter 2021 Earnings Conference Call February 17, 2022
Slide 2: Cautionary Note Regarding Forward-Looking Statements
The picture can't be displayed. 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 thing
Slide 3: Non-GAAP Financial Measures
The picture can't be displayed. Non-GAAP Financial Measures In addition to including earnings in accordance with generally accepted accounting principles (GAAP), this presentation also includes historical adjusted earnings and earnings per share (EPS) excluding: (1) charges related to Georgia Power’
Slide 4: Southern Company Update: Adjusted Full-Year Earnings Exceeded Guidance
The picture can't be displayed. Southern Company Update Adjusted Full-Year Earnings Exceeded Guidance • 2021 Adjusted EPS of $3.41 vs. $3.25 in 2020 • Primary drivers: – Higher retail electricity sales reflecting economic recovery in the Southeast – Strong customer growth – Investment in state-regul
Slide 5: Recent Southern Company Recognitions
The picture can't be displayed. Recent Southern Company Recognitions 2021 Top 50 Companies 2022 America’s Best Large 2021 Wall Street for Diversity, DiversityInc Employers, (No. 2 overall in U.S.) Journal’s Management (6th consecutive year) Forbes magazine 250 List, Drucker Institute Top Utility, No
Slide 6: Update on Vogtle Units 3 & 4
The picture can't be displayed. Update on Vogtle Units 3 & 4 • 3 to 6 months added to expected in-service dates for each unit – Unit 3: Q4 2022 thru Q1 2023 – Unit 4: Q3 2023 thru Q4 2023 • Georgia Power’s share of total capital cost forecast increased $920 million – Recorded after-tax charge of $68
Slide 7: Vogtle 3&4 COVID-19 Impacts
The picture can't be displayed. Vogtle 3&4 COVID-19 Impacts COVID-19 Positive Cases 7-Day Moving Average 40 COVID-19 COVID-19 COVID-19 Delta Omicron Wave 1 Wave 2 Wave 3 Variant Variant 30 20 10 0 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-2
Slide 8: Vogtle Unit 3 ITAAC Completion Forecast & Major Milestones
The picture can't be displayed. Vogtle Unit 3 ITAAC Completion Forecast & Major Milestones 45 210 Total ITAAC Completed 275 40 Total ITAAC Remaining 123 180 35 37 36 35 ITAAC Remaining as of Month-end 150 Monthly ITAAC Completions Unit 3 In-Service 30 25 120 Start Fuel Load 20 21 90 15 Blue Circles:
Slide 9: Vogtle Unit 4 Direct Construction & Major Milestones
Vogtle Unit 4 Direct Construction & Major Milestones The picture can't be displayed. (Direct Construction is Bechtel’s Scope of Work) MONTHLY % CUMULATIVE % 6% 100% 5% Unit 4 90% In-Service Structural Integrity / Start Fuel Load 4% 80% Integrated Leak Rate Tests Complete Start Hot Functional Testi
Slide 10: Vogtle 3 & 4 – Cost Update
The picture can't be displayed. Vogtle 3 & 4 – Cost Update (Georgia Power’s share) Total capital cost forecast increased by $920 million to address updated projected in-service dates, construction productivity, increased support resources, and replenishment of contingency Estimated Cost of Project (
Slide 11: Georgia Power Integrated Resource Plan Filing Summary
The picture can't be displayed. Georgia Power Integrated Resource Plan Filing Summary Transforming the Fleet and Grid GRID • Transmission Strategy – Shift to a more proactive, longer-term approach – develop and execute a comprehensive STRATEGY transition strategy to effectively facilitate the changi
Slide 12: 2021 Results
The picture can't be displayed. 2021 Results Q4 Full Year 2021 2020 2021 2020 Earnings / (Loss) Per Share As Reported ($0.20) $0.37 $2.26 $2.95 Less: Estimated Loss on Plants Under Construction1 ($0.65) ($0.12) ($1.19) ($0.23) Acquisition and Disposition Impacts2 $0.11 $0.01 $0.12 $0.04 Wholesale Ga
Slide 13: 2021 Year-Over-Year Adjusted Drivers
The picture can't be displayed. 2021 Year-Over-Year Adjusted Drivers1 39¢ (22¢) 2¢ 5¢ (2¢) (1¢) $3.41 $3.25 (5¢) O&M2 Southern Southern Parent & Shares Weather Company Power Other Rates, Pricing, Gas Usage & Other State-Regulated Electrics 2021 Drivers + Retail sales recovery in 2021 + Strong custom
Slide 14: 2021 Retail Electricity Sales and 2022 Outlook
The picture can't be displayed. 2021 Retail Electricity Sales and 2022 Outlook 2021 Weather-normal Sales vs. Forecast 2022 Forecast 5% 5% 3.7% 3.8% 3.2% 3.1% 3.1% 2.4% 1.5% 0.5% 0.7% 0.1% 0% 0% -1.0% -2.2% Actual Forecast -5% -5% Residential Commercial Industrial Total Retail Residential Commercial
Slide 15: Electricity Sales Reached 2019 Levels in Late 2021
The picture can't be displayed. Electricity Sales Reached 2019 Levels in Late 2021 Percent Change in Weather-normalized Sales from Same Quarter in 2019 Residential Commercial Industrial Total 5% 0% -5% -10% -15% 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 Weather-normalized sales, except for industrial
Slide 16: 2022 Adjusted EPS Guidance: ~90% from State-Regulated Franchises
2022 Adjusted EPS Guidance1 = $3.50 to $3.60 The picture can't be displayed. ~90% of Projected Earnings from Premier State-Regulated Electric and Gas Franchises $0.05 $0.34 All Other ($0.46) $3.60 to LDCs $0.44 Energy Parent $3.50 Infrastructure under long-term contracts2 Electrics $3.18 • Q1 2022 E
Slide 17: 97% of Projected Capital Investment in State-Regulated Utilities
The picture can't be displayed. 97% of Projected Capital Investment in State-Regulated Utilities $41 billion Base Capital Investment Plan* supports $4.00 to $4.30 adjusted EPS estimate for 2024 State-Regulated Gas State-Regulated Electric • 66% in Gas Reliability • 54% Grid Reliability and • Custome
Slide 18: Opportunities for Increased Capital Investment 2022 to 2026
The picture can't be displayed. Opportunities for Increased Capital Investment 2022 to 2026 $44B+ for the 5-year period Investment opportunities to move towards our net zero goal extend beyond 2026 >95% of base capital investment plan* Up to $3 billion in Southern Power growth projects, concentrated
Slide 19: Southern Company Value Proposition
The picture can't be displayed. Southern Company Value Proposition Southern Company’s strategy is to maximize long-term value to shareholders through a customer-, community- and relationship-focused business model that produces sustainable levels of return on energy infrastructure Key financial obje
Slide 20: Appendix
Appendix 20
Slide 21: Year-Over-Year Total Energy Mix Comparison
The picture can't be displayed. Year-Over-Year Total Energy Mix1 Comparison 2020 Total Energy Mix 2021 Total Energy Mix Renewables Renewables 15% Coal 15% Coal 17% 21% Nuclear Nuclear 17% 16% Natural Gas Natural Gas 51% 48% 1Energy mix represents all of the energy used to serve retail and wholesale
Slide 22: Capital Investment Plan
Capital Investment Plan 22
Slide 23: Growth of Historical Capital Forecast
Growth of Historical Capital Forecast The picture can't be displayed. (Annual State-Regulated Utility Capex Forecast Excluding Vogtle 3 & 4) $8B $6B $4B $2B 2022 2023 2024 2025 2018 Plan 2019 Plan 2020 Plan 2021 Plan 2022 Plan 23
Slide 24: Strong Projected State-Regulated Utility Rate Base Growth
Strong Projected State-Regulated Utility Rate Base Growth The picture can't be displayed. Consistent with Base Capital Investment Plan $70B • Grid and fleet modernization and $55B I N resilience initiatives continue to drive the V 2021 2022 2023 2024 2025 2026 growth profile of our electric utilitie
Slide 25: State-Regulated Electric Utilities Overview
The picture can't be displayed. State-Regulated Electric Utilities Overview Strong projected invested capital growth driven by modernization and resilience initiatives Projected Capital Investment Composition (excluding Vogtle) $70B 2022 - 2026 $55B 15% (Consistent with Base Capital Investment Plan)
Slide 26: State-Regulated Gas LDCs Overview
The picture can't be displayed. State-Regulated Gas LDCs Overview Strong projected rate base growth driven by substantial pipeline replacement Projected Capital Investment Composition $15B 2022 - 2026 $9B (Consistent with Base Capital Investment Plan) 19% 2021 2022 2023 2024 2025 2026 2021 2021 Rate
Slide 27: $41B in Projected Capital Investment Through 2026: Functional View
The picture can't be displayed. $41B in Projected Capital Investment Through 2026: Functional View Excluding Vogtle 3 & 4 Total (in $ billions) 2022 2023 2024 2025 2026 '22-'26 New Generation 0.3 0.2 0.0 - - 0.6 Generation Maintenance 0.9 1.1 1.0 0.8 0.9 4.6 Environmental Compliance 0.1 0.1 0.1 0.1
Slide 28: $41 Billion in Projected Capital Investment Through 2026: Company View
The picture can't be displayed. $41 Billion in Projected Capital Investment Through 2026: Company View Excluding Vogtle 3 & 4 Total (in $ billions) 2022 2023 2024 2025 2026 '22-'26 Alabama Power 2.2 2.1 2.1 2.0 2.0 10.4 Georgia Power 3.4 3.9 3.9 3.9 4.0 19.2 Mississippi Power 0.3 0.3 0.3 0.3 0.2 1.4
Slide 29: Capital Markets / Financing
Capital Markets / Financing 29
Slide 30: Long-term Debt Peer Comparison
The picture can't be displayed. Long-term Debt Peer Comparison As of 12/31/2021 4.5% Peer 2 Peer 9 Peer 4 4.0% Peer 3 Peer 20 Peer 7 Peer 10 Peer 18 Peer 1 Average Coupon (%) Peer 13 Peer 8 3.5% Peer 5 Peer 16 Peer 19 Peer 15 Peer 11 Peer 14 3.0% Peer 12 Peer 6 2.5% 10 12 14 16 18 20 22 Average Time
Slide 31: Projected Long-term Debt Financings
The picture can't be displayed. Projected Long-term Debt Financings1 Long-term Debt ($ in millions) 2022 2023 2024 2022-2024 Alabama Power 1,000 600 - 1,600 Georgia Power 1,500 1,500 1,150 4,150 Mississippi Power - - 200 200 State-regulated Electrics $2,500 $2,100 $1,350 $5,950 Southern Power - - -
Slide 32: Long-term Debt Maturity Schedule
Long-term Debt Maturity Schedule1,2 The picture can't be displayed. as of December 31, 2021 Long-term Debt1 Alabama Power $9.8B $ in millions $6,000 Georgia Power $13.8B Mississippi Power $1.5B Southern Company Gas Capital3 $4.5B $5,000 Nicor $2.1B Southern Power $3.7B $4,000 Parent Company $16.8B T
Slide 33: Liquidity and Credit
The picture can't be displayed. Liquidity and Credit $ in millions as of December 31, 2021 Over $7.6 billion in committed credit facilities and available liquidity of $6.8 billion (in millions) 2022 2023 2024 2026 Total Credit Facility Expirations $280 $125 $700 $6,550 $7,655 Alabama Georgia Mississ
Slide 34: Vogtle 3 & 4
Vogtle 3 & 4 34
Slide 35: Projected Financial Impacts Related to Vogtle 3 & 4
The picture can't be displayed. Projected Financial Impacts Related to Vogtle 3 & 41 Projected Cash Flow Improvement in 2024 Financial Plan1 Projected EPS Impacts of Delays (increases relative to 2021) ($M) Vogtle Quarterly Impacts3 EPS4 750 3-Month Delay at U3 ~ (2₵) Tax 3-Month Delay at U4 ~ (5₵)
Slide 36: Unit 3 Spent Fuel Pool in Preparation for Fuel Load
All 157 Fuel Assemblies Have Been Loaded into the The picture can't be displayed. Unit 3 Spent Fuel Pool in Preparation for Fuel Load 36
Slide 37: Vogtle 3 & 4 Major Milestone Definitions
The picture can't be displayed. Vogtle 3 & 4 Major Milestone Definitions Initial Energization- Energizing the main transformers to provide the initial supply of off-site power to the plant’s electrical distribution system needed for testing. Individual electrical components – pumps, valve, motors -
Slide 38: Vogtle 3 & 4 Major Milestone Definitions
The picture can't be displayed. Vogtle 3 & 4 Major Milestone Definitions Cold Hydro Test- Cold Hydro Testing contains several separate tests in different areas of the plant to verify that welds, joints, pipes, and other components of the reactor coolant system, steam-supply system and associated hig
Slide 39: Regulatory
Regulatory 39
Slide 40: Regulatory Mechanisms – Electric Subsidiaries
The picture can't be displayed. Regulatory Mechanisms – Electric Subsidiaries1 Alabama Georgia Mississippi 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 Other Regulatory Mechanisms
Slide 41: Regulatory Mechanisms – Gas LDCs
The picture can't be displayed. Regulatory Mechanisms – Gas LDCs1 Annual Base Energy Weather Bad Debt Rate Infrastructure COVID Cost Utility Rate Decoupling Efficiency Plan Normalization Recovery3 Adjustment Programs Recovery4 Recovery Mechanisms Nicor Gas (Revenue Normalization)2 (Investi
Slide 42: Georgia Power 2022 Integrated Resource Plan Schedule
The picture can't be displayed. Georgia Power 2022 Integrated Resource Plan Schedule Link to access Commission Committee Meeting and Hearings: Georgia Public Service Commission - YouTube Docket Numbers: 44160 (IRP) and 44161 (DSM) January 31, 2022 IRP filing with Georgia PSC March 11, 2022 Georgia P
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