Southern Company (the) · NYSE:SO
Southern Company (the) — Q4 2015 Earnings Presentation
21 slides from Southern Company (the)'s earnings presentation, Feb 3, 2016
Slide 1: Fourth Quarter 2015 Earnings Conference Call
Fourth Quarter 2015 Earnings Conference Call February 3, 2016
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: Vogtle Construction Site – January 2016
Vogtle Construction Site – January 2016 3
Slide 4: Vogtle 3&4 Construction Update
Vogtle 3&4 Construction Update Recent Progress Near Term Unit 3 Unit 3 • Continue setting Shield Building panels (“Course 2”) Placed concrete in initial Shield Building panels (“Course 1”) • Set Containment Vessel Ring 2 Placed Turbine Building Table Top concrete Unit 4 Unit 4 • Complete Cooling T
Slide 5: Kemper Project Update
Kemper Project Update Permanent rates in place for in-service assets • Combined cycle operating reliably and efficiently Expected in-service date for remainder of project in third quarter 2016 • Repairs and improvements to refractory lining Working towards next set of milestones • Commissioning of L
Slide 6: 2015 Earnings Results
2015 Earnings Results Q4 2015 Reported Earnings Per Share $0.30 $2.60 Impact of increase in Kemper cost estimate $0.12 $0.25 MCAR settlement costs - $0.01 AGL Resources acquisition costs $0.02 $0.03 Earnings Per Share x-items $0.44 $2.89 6
Slide 7: FY 2015 vs. FY 2014 Adjusted EPS Drivers
FY 2015 vs. FY 2014 Adjusted EPS Drivers +24¢ -4¢ -7¢ Weather +1¢ -3¢ Wholesale Other -5¢ Operations Operating Non-Fuel +1¢ -4¢ Revenues O&M +5¢ Parent & -1¢ Other $2.89 -1¢ +1¢ -1¢ Shares D&A Taxes Other Other Interest Income Southern Income & Expense Taxes Power +3¢ Deductions Retail $2.80 Revenue
Slide 8: Weather Normal Retail Sales Growth
Weather Normal Retail Sales Growth 2015 vs 2014 Expected 2016 Sales Growth 1.2% 1.1% 1.0% 1.0% 0.9% 0.4% 0.3% Industrial Residential Commercial Total Residential Commercial Industrial Total Retail Sales Retail Sales -0.3% • Strong residential customer growth continued in 2015 (+37K customers year-ov
Slide 9: 2016 – 2018 CapEx Forecast – by Function
2016 – 2018 CapEx Forecast – by Function Total $billions 2016 2017 2018 '16-'18 New Generation 1.2 0.7 0.4 2.3 (1) Environmental 0.7 0.5 0.6 1.8 Generation Maintenance 1.0 0.7 0.7 2.5 Transmission 0.6 0.7 0.7 2.0 Distribution 0.8 0.9 0.9 2.5 Nuclear Fuel 0.2 0.3 0.3 0.8 Other 0.4 0.4 0.4 1.1 (2) Tra
Slide 10: 2016 – 2018 CapEx Forecast – by Company
2016 – 2018 CapEx Forecast – by Company Total $billions 2016 2017 2018 '16-'18 Alabama Power 1.3 1.3 1.3 3.9 Georgia Power 2.5 2.4 2.1 7.0 Gulf Power 0.2 0.2 0.2 0.6 Mississippi Power 0.8 0.2 0.3 1.3 Other Subsidiaries 0.1 0.1 0.0 0.2 Traditional OpCo Total 4.9 4.1 3.9 13.0 Southern Power Base 1.6 0
Slide 11: Financing Plan Summary
Financing Plan Summary • Debt issuance for AGL Resources acquisition ($8B) expected to be completed prior to closing • Still expect to have issued at least $1B of equity by closing, with $1.2B in calendar year 2016 • Remainder of 2016 to 2018 financing plan is heavily influenced by extension of bonu
Slide 12: 2016 Guidance
2016 Guidance 2015 Guidance 2016 Guidance Impact of shares to fund $3.00 AGL Resources transaction $2.92 -6¢ $2.88 $2.88 $2.86 $2.82 $2.82 $2.84 -4¢ $2.76 Estimated impact of $2.76 bonus depreciation 2015 2016 12
Slide 13: 2016 & Long-Term EPS Guidance
2016 & Long-Term EPS Guidance $2.88 $2.76 • 2016 Guidance is standalone (excludes AGL Resources in 2016) • Long-term growth rate assumes AGL Resources acquisition 2016 closes in the second half of 2016 • All years exclude cost to achieve the AGL Resources merger Q1 2016 Estimate: $0.53 per share 13
Slide 14: Appendix
SOUTHERN PN COMPANY SOUTHERN COMPANY MM INVESTOR RELATIONS Appendix
Slide 15: 2015 Southern Power Project Announcements
2015 Southern Power Project Announcements In 2015, Southern Power contracted for over 1,000 MW of renewables at an average contract length of ~22 years 2015 Facility Location Type Owned MW Contract Length Expected COD Decatur – Parkway GA Solar 84 25-yr 2015 1st Quarter Decatur – County GA Solar 20
Slide 16: 2016 – 2018 Projected Financing Plan
2016 – 2018 Projected Financing Plan $ in millions 2016 2017 2018 2016 - 2018 Issued Remaining Total Projected Projected Total Projected Debt Issuances Georgia Power DOE Loan - 450 450 350 275 1,075 Mississippi Power Bank Debt(1) - 1,200 1,200 - - 1,200 Mississippi Power Securitization - - - 1,000 -
Slide 17: Southern Company and Subsidiary Ratings
Southern Company and Subsidiary Ratings Senior Unsecured (Moody’s/S&P/Fitch) Southern Company Baa1/BBB+/A (N/N/N*) Alabama Power Georgia Power Gulf Power Mississippi Power Southern Power A1/A-/A+ A3/A-/A+ A2/A-/A Baa3/BBB+/A- Baa1/BBB+/BBB+ (S/N/S) (S/N/S) (S/N/S) (N/N/N) (S/N/S) Note: A securities
Slide 18: Long-term Debt Maturity Schedule
Long-term Debt Maturity Schedule $ in millions - as of 12/31/15 2016 2017 2018 2019 2020 Alabama Power 200 561 - 200 250 Georgia Power 704 450 750 500 37 Gulf Power 110 85 - - 175 Mississippi Power(1) 725 611 - 125 7 Southern Power 400 500 350 - 300 Parent 500 800 500 350 600 SO Consolidated(2) 2,63
Slide 19: Southern Company Liquidity and Credit
Southern Company Liquidity and Credit $ in millions - as of 12/31/15 • Extended the maturity of syndicated credit facilities from 2018 to 2020 with total available credit of $4.4B under these facilities • Concurrent with the syndication of the AGL Resources bridge facility, added an additional $1B c
Slide 20: Status of Major State Filings for AGL Resources Merger
Status of Major State Filings for AGL Resources Merger • Filed merger approval application on December 18, 2015 Georgia • Evidentiary hearings scheduled for March 15, April 14 and May 3, 2016 2nd Quarter • Filed merger approval application on October 8, 2015 Illinois • Evidentiary hearings scheduled
Slide 21: Generation Portfolio Diversity
Generation Portfolio Diversity Capacity Factors Q4 FY 2014 2015 2014 2015 Coal - PRB 68% 50% 71% 61% Coal - Non-PRB 21% 14% 38% 32% Gas - Combined Cycle 73% 70% 66% 72% Energy Mix Q4 FY 2014 2015 2014 2015 Natural Gas 49% 52% 40% 47% Coal 31% 23% 40% 33% Nuclear 16% 19% 16% 16% Hydro/Other 4% 6% 4%