Southern Company (the) · NYSE:SO
Southern Company (the) — Q4 2014 Earnings Presentation
20 slides from Southern Company (the)'s earnings presentation, Feb 4, 2015
Slide 1: Fourth Quarter 2014 Earnings Conference Call
Fourth Quarter 2014 Earnings Conference Call February 4, 2015
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 project
Slide 3: Outstanding Operations
Outstanding Operations Customer Satisfaction: • Top 5 spots in annual benchmark survey • High rankings in J.D. Power & Associates surveys • Alabama Power rated “America’s most-trusted residential electric utility” Reliability: • EFOR is at industry-leading levels • Set all-time system records for tr
Slide 4: Vogtle Construction Site as of January 21, 2015
Vogtle Construction Site as of January 21, 2015 Cooling Towers Unit 3 Unit 4 Module Assembly Building Unit 4 Containment Vessel Assembly Nuclear Island Nuclear Island Unit 3 Heavy Lift Derrick Turbine Island Condenser Annex Building Assembly Turbine Island Switchyard 4
Slide 5: Vogtle Construction Update
Vogtle Construction Update Unit 3 Unit 4 Progress Progress Continued CA01 module assembly Continued CA20 module fabrication Continued Nuclear Island wall placements Continued 500kV switchyard upgrades Set CA05 Continued Nuclear Island wall placements Began Auxiliary Building metal deck
Slide 6: Vogtle Units 3&4 Nuclear Island Activity
Vogtle Units 3&4 Nuclear Island Activity Unit 3 Unit 4 Lower Ring Current Concrete inside View CA04 CB65 CVBH CA05 Formwork l Meta kin g Concrete Placed Dec Unit 3 Unit 4 Lower Ring CA04 CB65 Near Term CA04 CB65 CA05 l Meta c k ing Formwork D e Concrete Placed 6
Slide 7: Vogtle Project Update
Vogtle Project Update • Priorities are safety and quality • Projected impact to rates remains between 6% and 8% • VCM 11 vote scheduled for February 19th • Reviewing contractors’ revised schedule forecast • VCM 12 to be filed February 27th Concrete placement in Unit 3 auxiliary building area Unit 4
Slide 8: Kemper Project Update
Kemper Project Update Expected in-service date for remainder of project is 1st half 2016 Three parallel paths toward first syngas production in the third quarter • Operational training • Control systems validation • Start-up & check-out Working towards next set of milestones • Gasifier Air Flow Test
Slide 9: 2014 Earnings Results
2014 Earnings Results Q4 YTD Earnings Per Share $0.33 $2.21 Impact of increase in Kemper cost estimate $0.05 $0.59 Earnings Per Share x-items $0.38 $2.80 9
Slide 10: FY2014 vs. FY2013 Adjusted EPS Drivers
FY2014 vs. FY2013 Adjusted EPS Drivers 2¢ -33¢ 2¢ 17¢ Other Wholesale Operating Revenues 23¢ Weather -4¢ 4¢ 1¢ -6¢ Non-fuel SPC $2.80 O&M Other Other 3¢ Shares $2.71 Taxes Income & Deductions Other Usage & Revenue Economic Effects Growth Traditional Operating Companies 14¢ FY13 FY14 Note: Excludes 2
Slide 11: Retail Sales Growth vs. Prior Year
Retail Sales Growth vs. Prior Year Quarter-to-date Year-to-date As Reported Weather Normal As Reported Weather Normal Residential -0.2% -0.2% 5.5% 0.0% Commercial -0.8% -0.3% 1.3% -0.4% Industrial 2.3% 2.3% 3.3% 3.3% Total Retail Sales 0.5% 0.6% 3.3% 0.9% 7 Quarters of Continued Industrial Sales Gro
Slide 12: 2015 Outlook
2015 Outlook Economic Roundtable Expected 2015 Sales Growth GDP projected growth of around 3.0% 1.7% Industrial activity will continue to improve, 1.4% 1.3% but constrained by strengthening dollar and low oil prices 1.0% Improving housing market and consumer spending could offset headwinds Global ec
Slide 13: $16.6B Capital Expenditure Forecast
$16.6B Capital Expenditure Forecast $6.8B '15 - '17 Total 16.6 $5.5B So Power Placeholders for Growth 1.9 Total Base 14.7 $4.3B Southern Power Base 1.2 Environmental 2.2 New Generation 2.6 Transmission 1.9 Distribution 2.4 Generation Maintenance 2.5 Nuclear Fuel 0.8 2015 2016 2017 Other 1.0 Notes: T
Slide 14: 2015 – 2017 Financing Plan
2015 – 2017 Financing Plan ($ in millions) 2015 2016 2017 2015 - 2017 Georgia DOE Loan $ 1,000 $ 550 $ 300 $ 1,850 Mississippi Securitization - - 1,000 1,000 Mississippi Bank Debt 1,250 - - 1,250 Capital Markets Alabama $ 700 $ 300 $ 550 $ 1,550 Georgia 600 1,000 400 2,000 Gulf - 125 100 225 Mississ
Slide 15: Earnings Per Share Guidance
Earnings Per Share Guidance $2.88 2014 results at top of range* 2015 $2.80 2014 $2.76 $2.72 Q1 2015 Estimate: $0.55 *Excludes 2014 EPS impact of -59¢ for updated Kemper Project cost estimates; GAAP EPS was $2.21 for 2014 15
Slide 16: Appendix
SOUTHERN PN COMPANY SOUTHERN COMPANY MM INVESTOR RELATIONS Appendix
Slide 17: Q4 2014 vs. Q4 2013 Adjusted EPS Drivers
Q4 2014 vs. Q4 2013 Adjusted EPS Drivers 1¢ -21¢ 7¢ Other Operating Revenues Traditional Operating $0.48 Companies -12¢ Other Revenue Effects 4¢ -1¢ 1¢ -1¢ -1¢ 2¢ $0.38 -1¢ Other Parent & Shares Taxes Interest Other Expense Income SPC Non-fuel D&A Taxes O&M Q4 2013 Q4 2014 Note: Excludes Q4 2014 & Q
Slide 18: 2015 – 2017 CapEx Forecast – Functional
2015 – 2017 CapEx Forecast – Functional Total $billions 2015 2016 2017 '15-'17 New Generation $1.3 $0.9 $0.4 $2.6 Environmental Compliance $1.1 $0.5 $0.6 $2.2 Generation Maintenance $1.0 $0.8 $0.8 $2.5 Transmission Growth 0.2 0.1 0.1 0.4 Transmission Maintenance 0.4 0.4 0.4 1.3 Total Transmission $0
Slide 19: 2015 – 2017 CapEx Forecast – Company
2015 – 2017 CapEx Forecast – Company Total $billions 2015 2016 2017 '15-'17 Alabama 1.5 1.1 1.4 4.0 Georgia 2.4 2.4 2.1 6.9 Gulf 0.3 0.2 0.2 0.7 Mississippi 1.0 0.3 0.2 1.6 Other Subsidiaries 0.1 0.1 0.0 0.2 Traditional OpCo Total $5.4 $4.2 $3.9 $13.5 Southern Power 1.4 1.3 0.4 3.1 Total Capex $6.8
Slide 20: Generation Portfolio Diversity
Generation Portfolio Diversity Capacity Factors Q4 YTD 2013 2014 2013 2014 Coal - PRB 79% 68% 74% 73% Coal - Non-PRB 25% 21% 30% 44% Gas - Combined Cycle 65% 71% 66% 64% Energy Mix Q4 YTD 2013 2014 2013 2014 Natural Gas 42% 49% 41% 40% Coal 37% 31% 38% 40% Nuclear 17% 16% 16% 16% Hydro/Other 4% 4% 5