Southern Company (the) · NYSE:SO
Southern Company (the) — Investor Day (October 2016)
91 slides from Southern Company (the)'s investor day presentation, Oct 31, 2016
Slide 1: Analyst Day
S 4@ Southern Company Analyst Day New York Stock Exchange October 31, 2016
Slide 2: Agenda
Agenda Welcome and Safety Review Overview Traditional Electric Operating Companies Southern Company Gas Southern Power Company Financial Update Summary 2
Slide 3: Investor Relations Contact Information
Investor Relations Contact Information Aaron Abramovitz Jimmy Stewart Director, Investor Relations Manager, Investor Relations 404-506-0780 404-506-0747 apabramo@southernco.com jwstewar@southernco.com Main website: southerncompany.com IR website: investor.southerncompany.com CSR website: southerncom
Slide 4: 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 5: NON-GAAP Financial Measures
NON-GAAP Financial Measures In addition to including earnings in accordance with generally accepted accounting principles (GAAP), this presentation also includes historical adjusted earnings excluding: (1) estimated probable losses relating to Mississippi Power’s construction of the Kemper IGCC; (2)
Slide 6: Overview
Overview Tom Fanning Chairman, President & CEO
Slide 7: The Whats and the Hows
The Whats and the Hows Customer-centric Business Model Our Values Safety First We believe the safety of our employees and customers is Our Strategy paramount. We will perform and maintain every job, every day, safely Maximize long-term Unquestionable Trust value to shareholders Honesty, respect, fai
Slide 8: Our Value Proposition & Financial Objectives
Our Value Proposition & Financial Objectives • Superior risk-adjusted total • Strong, sustainable, returns on shareholder return invested capital • A high degree of financial integrity and • Regular, predictable, sustainable strong investment grade credit ratings EPS and dividend growth State-regula
Slide 9: "Make, Move and Sell" is evolving...as is SO
“Make, Move and Sell” is evolving…as is SO Beliefs Execution • New capacity needs are getting • Build and own utility scale deferred by slower growth renewables, where applicable • Central station generation will remain • Develop solutions for distributed important long term Make • Gas, renewables a
Slide 10: Filling in the energy value chain to sustain growth
Filling in the energy value chain to sustain growth Then… Gas Value- Distributed Fuel Trans- Distri- Customer Energy Generation Wholesale Midstream Retail Added Energy Supply Storage mission bution Service Services Products Infrastructure (including 50% of Southern Natural Gas) …and now Gas Distri-
Slide 11: Major Accomplishments Support an Improved Profile
Major Accomplishments Support an Improved Profile • Southern Power growth opportunities • Outstanding results with landmark capital markets transactions • Acquisition of Southern Company Gas (formerly AGL Resources) • Acquisition of a 50% interest in the equity of Southern Natural Gas • Plant Ratcli
Slide 12: Who is PowerSecure?
Who is PowerSecure? Low-risk business model, behind the meter infrastructure with high quality customers Total $443M Distributed Generation Products & services: onsite generation, switchgear, microgrid, energy storage and solar solutions Customers: data centers, healthcare, military and national acc
Slide 13: PowerSecure is positioned to grow
PowerSecure is positioned to grow Strategic Alliance • Southern Company brand is positively impacting the large data center customer pipeline • Portfolio of long-term contracts • Affiliates have a new portfolio of with high quality customers solutions and a ready made fulfillment arm for their custo
Slide 14: Our value proposition is strengthened and lengthened
Our value proposition is strengthened and lengthened V = f (, R) (value is a function of risk and return) R V Lower event risk 5% adjusted EPS growth1 Objective: State-regulated and long- Stronger projected cash Superior risk-adjusted total term contract business flow and dividend support shareho
Slide 15: Traditional Electric Operating Companies
Traditional Electric Operating Companies Mark Crosswhite & Stan Connally 15
Slide 16: Traditional Electric Operating Companies: Focused on the Fundamentals
Traditional Electric Operating Companies Focused on the Fundamentals • Safety, customer satisfaction and reliability are ongoing priorities for all four retail electric utilities • We are only as successful as the communities and economies we serve • Customer service, reliability and compliance driv
Slide 17: We're only as successful as the communities and economies we serve
We’re only as successful as the communities and economies we serve We invest in the communities we are privileged to serve in many ways… …and we work hard to drive new investment by businesses in our communities 17
Slide 18: Electricity use in our retail service territories
Electricity use in our retail service territories • 4.6 million customers with •annual customer 4.6 million growth customers with of Projected Retail Kilowatt Hour Sales Mix annual customer approximately growth 1% 2017 - 2021 of approximately 1% • Customer usage trends •are Customer limitingusage sa
Slide 19: A healthy capital investment program
A healthy capital investment program Projected Capital Investment • Continually evaluating capital Composition opportunities to better serve customers 2017 - 2021 and/or reduce operating costs • Many compliance costs recovered via dedicated regulatory mechanisms 9% 23% • No CPP compliance investment
Slide 20: Constructive regulatory framework to address modest growth in rate base
Constructive regulatory framework to address modest growth in rate base Projected Total Capital Invested in Traditional Electric Operating Companies $48.0B $48.9B $49.6B $50.1B Capital invested, $45.2B including CWIP, to serve both retail and wholesale customers 2017 2018 2019 2020 2021 Alabama: Ann
Slide 21: Solid earned returns on investment
Solid earned returns on investment Traditional Electric Operating Companies Earned ROE Keys to continued success • Outstanding service and reliability 12.6% 12.6% 12.3% 12.3% 12.1% • Mitigating O&M escalation in light of 0% to 1% sales growth • Constructive regulatory results 2014 2015 2012 2013 201
Slide 22: Traditional Electric Companies – Supporting the Value Proposition
Traditional Electric Companies – Supporting the Value Proposition Our focus on the fundamentals is a key driver of our success Significant accomplishments on major projects, including regulatory Visibility of allowed returns A robust capital program, with upside long term Focused on delivering susta
Slide 23: Appendix: Traditional Electric Operating Companies
Appendix Traditional Electric Operating Companies 23
Slide 24: Vogtle 3&4 Prudence Stipulation
Vogtle 3&4 Prudence Stipulation Subject to PSC approval Prudent Reasonable & Prudent $3.4B $1.75B If costs are above $5.68B Costs Incurred Through 12/31/2015 Remaining Spend • Burden of prudency on Georgia Power • AFUDC at LTD Rate $0.35B $0.24B If in-service date is beyond Contractor Settlement Con
Slide 25: Vogtle Units 3 and 4 – significant construction progress
Vogtle Units 3 and 4 – significant construction progress Unit 3 Set the 5th and 6th layers of shield building panels Completed turbine building structural steel Set both moisture separator reheaters in the turbine building Set all three low pressure turbine lower outer casings Placed concr
Slide 26: Vogtle Unit 3
Vogtle Unit 3 Roof Steel Bridge Cranes Generator Stator Annex Building Moisture Separator Reheater Low Pressure Lower Casings Shield Building (Course 06) 26
Slide 27: Vogtle Unit 4
Vogtle Unit 4 CA05 Bay 1 Wall Rebar (elevation 100 ft) Condensers CA04 CA20 House Steel (elevation 171 ft) Auxiliary Building Annex Exterior Walls Building (elevation 100 ft) Basemat 27
Slide 28: Vogtle Units 3 and 4 – module descriptions
Vogtle Units 3 and 4 – module descriptions CA01 – Structural steel module assembled in the on-site Module Assembly Building (MAB). Weighs approximately 1,000 tons, is approximately 76 feet tall, and has an area of about 92 feet by 96 feet. Includes the steam generator compartments, the pressurizer c
Slide 29: Plant Ratcliffe IGCC at Kemper County
Plant Ratcliffe IGCC at Kemper County 2X1 Combined Gas Clean-up TRIGTM Cycle Systems Gasifiers 29
Slide 30: Traditional Electric Operating Company Projected Capital Investments
Traditional Electric Operating Company Projected Capital Investments in billions $5.2B of compliance Total Total investments 2017 to 2021 2017 2018 2019 2020 2021 '17-'19 '17-'21 New Generation $0.6 $0.7 $0.4 $0.1 $0.0 $1.7 $1.9 Effluent Generation Maintenance 0.8 0.6 0.8 0.9 0.5 2.2 3.6 Limitation
Slide 31: Traditional Electric Operating Company ROE Reconciliation
Traditional Electric Operating Company ROE Reconciliation 2011 2012 2013 2014 2015 Net Income, as reported $2,052 $2,098 $1,533 $1,797 $2,185 Kemper loss (after tax) - 48 681 553 226 Adjusted Net Income $2,052 $2,146 $2,214 $2,350 $2,411 Average Common Equity $16,243 $17,070 $18,053 $19,036 $19,996
Slide 32: Regulatory Mechanisms
Regulatory Mechanisms Alabama Georgia Gulf Mississippi Customers (thousands) 1,467 2,480 455 188 Allowed Return on Investment1 5.75% - 6.21% 10.0% - 12.0% 9.25% - 11.25% 6.4% - 7.4% Base Rates Alternative Ratemaking Rate RSE 3 year accounting order PEP-5A Traditional Regulation ROE band ROE band Oth
Slide 33: Southern Company Gas
Southern Company Gas Drew Evans 33
Slide 34: Business Overview
Business Overview • Gas Distribution Operations includes GAS LDCs and seven state-regulated local distribution Midstream Pipes companies (LDCs), serving 4.6 million customers • Gas Midstream Operations includes investments in six pipelines, including Southern Natural Gas • Gas Marketing Services com
Slide 35: Gas Distribution Operations – State-regulated LDCs
Gas Distribution Operations – State-regulated LDCs • One of the largest LDC 2016 Allowed 2016 Rate Customers ROE Base operators in the U.S., serving (millions) 4.6 million customers Nicor Gas (IL) 2.2M 10.17% $1,763 Atlanta Gas Light (GA) 1.6M 10.75% $2,456 • Rates set through cost-based Virginia Na
Slide 36: State Regulatory Activity - LDCs
State Regulatory Activity - LDCs Safety-related pipeline replacement programs Largest programs in IL, GA and VA have minimal recovery lag with authorized ROEs at or above 10% Expected to replace 450 - 500 miles of pipeline per year Atlanta Gas Virginia Florida City Elizabethtown Elizabethtown Nicor
Slide 37: Keys to continued success for LDCs
Keys to continued success for LDCs Focus on safety, reliability and customer satisfaction Constructive regulatory results Continue to minimize lag of capital expenditure recovery Continue to deliver ROEs of approximately 10% over the long term 37
Slide 38: Gas Midstream Operations
Gas Midstream Operations Midstream pipelines, storage, and LNG • Pipelines are highly contracted with ROEs averaging 11%-12% • “Demand pull” rather than “producer push” • Greater than 90% of capacity under contract with investment-grade counterparties Over $2B invested in operational Expecting to gr
Slide 39: Gas Marketing Services
Gas Marketing Services Strategy: Focus where competition is open and business is ancillary and complementary to core LDC business to maximize margin Focus: Marketing energy products and services to retail customers and providing excellent service Annual net income of ~$90M driven primarily by SouthS
Slide 40: Growth driven by regulated investments
Growth driven by regulated investments ~$8 billion of capital investment expected over the 2017-2021 time period • Predominately regulated utilities and pipelines • Distribution capital with minimal regulatory lag • Pipeline projects are geographically diversified • Plan to finance growth in a manne
Slide 41: Stable, Predictable, Diversified Earnings Growth
Stable, Predictable, Diversified Earnings Growth Over 80% of projected growth is from regulated and midstream investments with minimal regulatory lag Projected Adjusted Net Income 2017-2021 $600M1 $420M1 Gas Distribution Operations (LDCs) Steady customer growth and infrastructure investment State-re
Slide 42: Appendix: Southern Company Gas
Appendix Southern Company Gas 42
Slide 43: LDC Regulatory Mechanisms
LDC Regulatory Mechanisms Conservation Weather Bad Debt Infrastructure Utility Rate Decoupling Program Normalization Recovery Programs Recovery Weather Risk Nicor Gas (~70% Fixed) Hedged Atlanta Gas Light N/A N/A (Straight –Fixed -Variable) Virginia Natural Gas (Revenue Normaliza
Slide 44: Midstream Pipeline Portfolio
Midstream Pipeline Portfolio Operational Southern Natural Gas Magnolia Horizon Capacity: 3.9M dth/d Capacity: 82k dth/d Capacity: 380k dth/d Miles: 7,000 Miles: 200 Miles: 70 Region: Southeast US Region: Georgia Region: Illinois 50% ownership 100% ownership 50% ownership Investment: $2.1B Investment
Slide 45: Wholesale Gas Services (Sequent)
Wholesale Gas Services (Sequent) Manages physical natural gas assets for affiliate LDCs and third party customers including natural gas utilities, gas-fired power generators, natural gas producers and large commercial and industrial customers Historical Benefit of AMAs to Affiliate LDCs • Provides A
Slide 46: Southern Power Company
Southern Power Company Buzz Miller 46
Slide 47: Southern Power's contracts-based business model
Southern Power Growth: 2001 to 2009 Southern Power’s contracts- • Natural Gas G • Solar S based business model • Wind W • Biomass B Under Construction • Sell capacity and energy covered by long-term contracts – Contracted revenues are not linked to market power prices • Minimize fuel and transmissio
Slide 48: Southern Power Growth: 2010 to 2015
Southern Power Growth: 2010 to 2015 • Natural Gas G • Solar S • Wind W • Biomass B Under Construction S Apex S North Star S Spectrum Granville S Cimarron S W Kay Wind Cleveland G G Rowan S Imperial Valley Dahlberg S Pawpaw S Campo Verde G Wansley G G Addison S Butler Solar Farm S Adobe Macho S Sprin
Slide 49: Southern Power Growth: 2016
Southern Power Growth: 2016 • Natural Gas G • Solar S • Wind W • Biomass B W Under Construction Passadumkeag Mankato G S Apex S North Star S Spectrum S Boulder Grant Wind W S Tranquillity S Henrietta Grant Plains W Granville S S Desert Stateline Cimarron S W Kay Wind Cleveland G G Rowan S Rutherford
Slide 50: A Nationwide Clean Energy Fleet
A Nationwide Clean Energy Fleet Current Portfolio Type MW1,2 % Net Book Value2 % Natural Gas 9,320 76% $2.8B 23% Solar 1,727 14% $6.8B 57% Wind 1,172 9% $2.1B 17% Biomass 115 1% $0.4B 3% Total 12,335 100% $12.1B 100% Southern Power has a diverse portfolio with strong contract coverage and high credi
Slide 51: Strong contract coverage with high quality counterparties
Strong contract coverage with high quality counterparties Southern Power’s contracts-based business model • Sell capacity and energy covered by long-term contracts – Contracted revenues are not linked to market power prices • Minimize fuel and transmission risks using pass-through contract provision
Slide 52: Superior Operational Performance
Superior Operational Performance SPC Safety - 0 recordable injuries in over 1,100 days Gas CC Peak Season EFOR1 (%) Renewable Availability 100% 98.5% 97.7% 75% 50% 25% 0% Solar Wind Delivering on key operating performance metrics illustrates our commitment to operational excellence and helps to ensu
Slide 53: Southern Power Growth Outlook
Southern Power Growth Outlook We are positioned to grow as a clean energy provider in the near and long term • Declining PPA prices, combined with corporate tax position, are making solar financial profiles less attractive • Continuing to pursue select solar projects on a more limited basis • Wind e
Slide 54: Market Focus
Market Focus MISO WECC SPP ERCOT Southern Power is geographically agnostic while remaining business model dogmatic 54 54
Slide 55: Southern Power Growth Capital
Southern Power Growth Capital1 $4.4B Wind / Solar / Natural Gas Wind Actual / Reforecast $2.4B $1.5B $1.5B $1.5B $1.5B $1.5B $0.5B $0.5B $0.5B $0.5B $0.5B $0.6B $0.8B $0.2B $1.0B $1.0B $1.0B $1.0B $1.0B 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 • 2016 growth investments currently projected t
Slide 56: Southern Power Net Income Forecast
Southern Power Net Income Forecast $500M $330M-$340M $300M-$330M $215M $172M $166M $172M 2012 2013 2014 2015 2016 2017 2021 Annual income profile will depend on the mix of new wind, solar and gas • 2016 Net Income forecast = $330M - $340M • 2017 Net Income forecast = $300M - $330M Southern Power’s p
Slide 57: Appendix: Southern Power Company
Appendix Southern Power Company 57
Slide 58: Financial Information
Financial Information For year ended December 31 2013 2014 2015 2016E 2017E 2018-2021E Net Income $166M $172M $215M $330M-$340M $300M-$330M ~12% Projected 2016 Contribution to Net Income Projected 2017 Contribution to Net Income Wind Wind 44% Solar 6% 63% Natural Solar Natural Gas / 23% Gas / Biomas
Slide 59: IRR to Equity
SPC hurdle rates reflect the risk of each project Primary Risk Factors Considered Potential Project Specific Risk Factors • Technology: Gas (CT, CC), Solar, Wind • Fuels / Resource • Transmission • PPA Contract Length • Reliability / Design • External affairs • PPA Counter Party Credit Risk • EPC •
Slide 60: Southern Power Business Model
Southern Power Business Model • Sell generating capacity and energy covered by long-term contracts – Contracted revenues are not linked to market power prices • Minimize fuel and transmission risks using pass-through contract provisions • Execute contracts with strong credit support Illustrative Con
Slide 61: Calculation of Debt to Capitalization and CFO to Debt
Calculation of Debt to Capitalization and CFO to Debt 61 1 As of December 31 for each year
Slide 62: Financial Update
Financial Update Art Beattie 62
Slide 63: Earnings Per Share As Reported
2016 Q3 and YTD earnings Q3 YTD 2015 2016 2015 2016 Earnings Per Share As Reported $1.05 $1.18 $2.30 $2.39 Impact of increase in Kemper cost estimate $0.11 $0.04 $0.13 $0.13 Acquisition and integration costs $0.01 $0.03 $0.01 $0.08 MCAR Settlement costs - - $0.01 - $1.17 $1.25 $2.45 $2.60 Equity Ret
Slide 64: Q3 2016 vs. Q3 2015 Adjusted EPS Drivers
Q3 2016 vs. Q3 2015 Adjusted EPS Drivers + Weather and Other Revenue Effects at Traditional Electric + Southern Power project execution and energy margins – Financings to support growth See slide 63 for additional information regarding non-GAAP financial measures 64
Slide 65: 2016 Expectations = Very top of Guidance
2016 Adjusted Earnings Per Share 2016 Expectations = Very top of Guidance 2016 Guidance = $2.76 - $2.88* Excluding • Southern Company Gas results and acquisition debt financing cost • Southern Company Gas, PowerSecure and Southern Natural Gas acquisition costs • Southern Natural Gas results and rela
Slide 66: Our 2017 estimate and long-term outlook support these objectives
2017 and beyond Our value proposition and financial objectives • Superior risk-adjusted total • Strong, sustainable, returns on shareholder return invested capital • A high degree of financial • Regular, predictable, sustainable integrity and strong investment- EPS and dividend growth grade credit r
Slide 67: A healthy level of projected capital investment to support sustained growth
A healthy level of projected capital investment to support sustained growth Approximately $39B projected capital investment 2017-2021 $8.9B $8.2B 2% $7.6B $7.3B $6.6B Traditional Electric OpCos 21% GAS LDCs 3% Midstream Pipelines 57% Southern Power 17% Other 2017 2018 2019 2020 2021 Projected Capita
Slide 68: We continue to finance growth in a balanced, credit-supportive manner
We continue to finance growth in a balanced, credit-supportive manner as of 10/31/2016 Projected Financings* and Maturities In billions • Remaining expected equity needs for 2016 of approximately $550M $10.5B projected net financings 2017-2021 – Partially to fund $1B to $1.5B qualified pension contr
Slide 69: Recent landmark financing activity
Recent landmark financing activity First US First US Retail Largest Utility Largest Corporate Investment Electric Utility Acquisition Retail Hybrid Grade Power Green Bond Bridge Facility Green Bond $8.1 Billion $1 Billion $1 Billion $325 Million Aug 2015 Oct 2015 Nov 2015 Mar 2016 First US Power Co.
Slide 70: Our debt portfolio enhances our long-term profile
Our debt portfolio enhances our long-term profile Southern Company’s debt portfolio compares favorably to our peers. $41B Southern Company debt portfolio has an average tenor of 16 years at 3.9% as of 9/30/2016 Average Coupon (%) 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% SO 3.5% 3.0% Includes DOE draws and publ
Slide 71: EPS Guidance
EPS Guidance Announced an increase in the adjusted EPS growth rate from 3-4% to 4-5% with the acquisition of Southern Company Gas1 $2.88 $2.76 20162 2017 2018 2019 2020 2021 1. Excludes projected merger-related expenses and earnings from Wholesale Gas Services 2. 2016 guidance provided as of Februar
Slide 72: EPS Guidance
EPS Guidance Our outlook for 20171 supports adjusted EPS guidance that is 5% higher than 2016 guidance2 $3.02 $2.88 $2.90 $2.76 2016 2017 2018 2019 2020 2021 1. Excludes projected merger-related expenses and earnings from Wholesale Gas Services 2. 2016 guidance provided as of February 3, 2016 on the
Slide 73: EPS Guidance
EPS Guidance Our outlook for 20171 supports adjusted EPS guidance that is 5% higher than 2016 guidance2 $3.02 Our longer-term outlook supports $2.88 an adjusted EPS trajectory that is $2.90 approximately 5% $2.76 2016 2017 2018 2019 2020 2021 1. Excludes projected merger-related expenses and earning
Slide 74: Our stronger profile supports our dividend objective
Our stronger profile supports our dividend objective1 +8¢ +7¢ • Future cash flow coverage +7¢ of our dividend is more +7¢ robust than recent past +7¢ +7¢ • Approximately 95% funded +7¢ by state-regulated utilities +7¢ and businesses with long- +7¢ term contract business +7¢ models +6¢ +6¢ +6¢ Object
Slide 75: Growth is spread across our major businesses
Growth is spread across our major businesses Projected contribution to earnings Projected contribution to the growth1 through 2021 dividend in 2021 Other Other Traditional 9% Electric GAS 2% 26% OpCos 18% 30% Southern 14% Power 66% GAS1 35% Traditional Southern Electric Power OpCos ~95% of the divid
Slide 76: Financial Update Summary
Financial Update Summary We have a healthy capital investment plan that we expect to finance in a balanced, credit-supportive manner All of our major business units are projected to contribute towards long-term earnings per share growth of approximately 5%1 Our dividend is expected to be funded prim
Slide 77: Appendix: Financial Update
Appendix Financial Update 77
Slide 78: Adjusted EPS Guidance 2017 vs. 2016
Adjusted EPS Guidance 20171 vs. 20162 $3.02 $2.88 $2.90 $2.76 Net of 7¢ for Kemper Includes Southern Includes interest and rate deferrals Natural Gas shares not included in 2016 adjusted EPS 1. Excludes projected merger-related expenses and earnings from Wholesale Gas Services 2. 2016 guidance provi
Slide 79: Projected capital investments by subsidiary
Projected capital investments by subsidiary (in billions) Total Total 2017 2018 2019 2020 2021 '17-'19 '17-'21 Alabama Power $1.9 $1.6 $1.3 $1.4 $1.3 $4.9 $7.5 Georgia Power 2.6 2.7 2.3 2.2 1.8 7.6 11.6 Gulf Power 0.2 0.2 0.2 0.3 0.3 0.6 1.2 Mississippi Power 0.3 0.2 0.2 0.3 0.3 0.7 1.3 1 Traditiona
Slide 80: Credit Ratings
Credit Ratings as of 10/31/2016 Southern Company Baa2/BBB+/A- (S/N/S) Southern Alabama Georgia Gulf Mississippi Power Power Power Power Power Southern Baa1/BBB+/BBB+ A1/A-/A+ A3/A-/A+ A2/A-/A Baa3/BBB+/BBB+ Company Gas (S/N/S) (S/N/S) (S/N/S) (S/N/S) (N/N/S) Southern Note: Nicor Ratings are Sr. Secu
Slide 81: Long-term debt maturity schedule
Long-term debt maturity schedule in millions - as of October 31, 2016 Maturity Profile $3,455 $2,525 $2,777 $2,453 $1,373 20171 2018 2019 2020 2021 ’17-’21 Alabama Power $561 $ - $200 $250 $310 $1,321 Georgia Power 450 750 500 42 367 2,108 Gulf Power 85 - - 175 - 260 Mississippi Power 586 1,200 125
Slide 82: Liquidity and credit
Liquidity and credit in millions - as of 9/30/2016 $8.4 billion in combined committed credit facilities 2016 2017 2018 2019 2020 Total Consolidated Credit Facilities Expirations $150 $305 $3,590 $ - $4,400 $8,445 Alabama Georgia Gulf Mississippi Southern Southern Power Power Power Power SEGCO Compan
Slide 83: 2016 financing
2016 financing* in millions - as of 10/31/2016 9,000 8,000 4Q16 - Potential Sr. Debt 7,000 4Q16 - Projected Equity 4Q16 - Potential Parent LTD 6,000 4Q16 - Projected Sr. Debt 4Q16 - Projected DOE Draw 5,000 YTD Issued 8,500 4,000 550 3,000 0 - 300 2,000 900 3,250 125 1,000 1,550 950 1,200 900 0 - 50
Slide 84: Projected financing activity
Projected financing activity* in millions - as of October 31, 2016 Long Term Debt 2017 2018 2019 2017-2019 Alabama Power $1,100 $0 $500 $1,600 Georgia Power 1 1,300 1,525 900 3,725 Gulf Power 150 0 0 150 Mississippi Power2 1,000 900 175 2,075 Traditional Electric $3,550 $2,425 $1,575 $7,550 Southern
Slide 85: Projected NOL and tax credit carry forward position
Projected NOL and tax credit carry forward position • Tax Net Operating Loss (NOL) is expected to be fully utilized by 2018 Tax Credit $1.9B Carryforward • Tax credits are expected to $2.2B be monetized and provide cash benefits through the Deferred early to mid-2020s $1.5B tax benefits depending on
Slide 86: Net Income Impact from Purchase Accounting
Net Income Impact from Purchase Accounting ($Millions) 2016 2017 2018 2019 2020 2021 Gas Distribution Operations $ (0.6) $ (1.8) $ (1.8) $ (1.8) $ (1.8) $ (1.8) Gas Marketing Services (15.5) (22.4) (16.4) (12.5) (9.7) (7.3) Gas Midstream Operations 0.6 1.8 1.3 1.5 1.3 1.2 Gas Other 10.5 22.3 22.0 16
Slide 87: Reconciliation of 2015 Contribution to Earnings
Reconciliation of 2015 Contribution to Earnings Adjusted Net Income ($millions) 2015 As Percent of Total Adjusted Net Income Traditional Electric Net Income, as reported $2,186 Kemper loss (after tax) 226 Adjusted Net Income $2,412 92% Southern Power Net Income $215 8% Parent and Other Net Income, a
Slide 88: Summary
4 Southern Company 88
Slide 89: Southern Company System
Southern Company System SERVICE TERRITORIES GAS PIPELINES ‘ SOUTHERN POWER FACILITIES : POWERSECURE Dvvcne aoe | mm UR, Mm SIREN mm FU, | COMBINED PEAKING BIOMASS: SOLAR WIND UNDER 1 MANAGED OWNED CYCLE PLANT PLANT PLANT PLANT PLANT DEVELOPMENT* ' ‘SITES ‘SITES 89
Slide 90: Questions
4 Southern Company 90
Slide 91: Southern Company
£ 4@ Southern Company