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Southern Company Reports Strong 2007 Results
Southern Company also reported solid fourth quarter earnings of
Excluding the impact of synthetic fuel investments, Southern Company earned
Low housing costs and job growth continue to attract new residents to the Southeast. Southern Company added more than 55,000 customers in 2007, an increase of 1.3 percent over 2006. Despite a slowdown in the housing market, the Southeast's stronger growth in households and jobs, as compared to the nation's, continues to provide a solid foundation for the Southeastern economy.
During an August heat wave, which was compounded by the ongoing drought, the company set five successive peak records. Despite the prolonged stress that was placed on the system, Southern Company's customers did not experience a single major disruption to service.
"Southern Company employees did an outstanding job in 2007, operating at historically high levels of reliability, achieving industry-leading customer satisfaction levels and continuing to offer retail prices well below the national average," said Chairman, President and CEO David M. Ratcliffe. "Our commitment to deliver good results for customers and shareholders is strong and our track record speaks for itself."
In addition to weather and the resilient economy, the positive earnings drivers in 2007 include state regulatory actions. The drivers were offset in part by higher non-fuel operations and maintenance expenses, higher interest expense, and asset depreciation primarily associated with increased investment in environmental equipment and transmission and distribution related to maintaining reliability in the growing Southeast.
Revenues for the full year were
Kilowatt-hour sales to retail customers in Southern Company's four-state service area increased 1.4 percent in 2007, compared with 2006. Residential energy sales increased 1.8 percent. Commercial energy sales increased 3.2 percent. Industrial energy sales declined 0.7 percent.
Total energy sales to Southern Company's customers in the Southeast, including wholesale sales, increased 2.3 percent in 2007 compared with 2006, primarily because of customer growth.
In conjunction with this earnings announcement, Southern Company has posted on its Web site detailed financial information on its fourth quarter and 2007 performance. These materials are available at www.southerncompany.com.
Southern Company's financial analyst call will be at
With 4.3 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy company serving the Southeast, one of America's fastest-growing regions. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are significantly below the national average. Southern Company has been listed the top ranking U.S. electric service provider in customer satisfaction for eight consecutive years by the American Customer Satisfaction Index (ACSI). Visit our Web site at www.southerncompany.com.
Cautionary Note Regarding Forward-Looking Statements:
Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning results of operations, customer and economic growth and Southern Company's strategies. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company's Annual Report on Form 10-K for the year ended
Southern Company Financial Highlights (In Millions of Dollars Except Earnings Per Share) 3 Months Ended Year-to-Date December December 2007 2006 2007 2006 Consolidated Earnings-As Reported (Notes) (Notes) (Notes) (Notes) (See Notes) Traditional Operating Companies $202 $170 $1,584 $1,463 Southern Power 8 27 132 124 Total 210 197 1,716 1,587 Synthetic Fuels 8 6 61 12 Parent Company and Other (14) (15) (43) (26) Net Income - As Reported $204 $188 $1,734 $1,573 Basic Earnings Per Share - (See Notes) $0.27 $0.25 $2.29 $2.12 Average Shares Outstanding (in millions) 762 745 756 743 End of Period Shares Outstanding (in millions) 763 747 3 Months Ended Year-to-Date December December 2007 2006 2007 2006 Consolidated Earnings-Excluding Synfuels (See Notes) Net Income - As Reported $204 $188 $1,734 $1,573 Less: Synthetic Fuels (8) (6) (61) (12) Net Income-Excluding Synthetic Fuels $196 $182 $1,673 $1,561 Basic Earnings Per Share-Excluding Synfuels $0.26 $0.25 $2.21 $2.10 Significant Factors Impacting EPS 3 Months Ended Year-to-Date December December 2007 2006 Change 2007 2006 Change Consolidated Earnings- As Reported $0.27 $0.25 $0.02 $2.29 $2.12 $0.17 (See Notes) Significant Factors: Traditional Operating Companies 0.05 0.16 Southern Power (0.02) 0.01 Synthetic Fuels - 0.06 Parent Company and Other - (0.02) Additional Shares (0.01) (0.04) Total-As Reported $0.02 $0.17 3 Months Ended Year-to-Date December December 2007 2006 Change 2007 2006 Change Consolidated Earnings- Excluding Synfuels $0.26 $0.25 $0.01 $2.21 $2.10 $0.11 (See Notes) Total-As Reported 0.27 2.29 Less: Synthetic Fuels (0.01) (0.08) Total-Excluding Synthetic Fuels $0.26 $2.21 Notes — For the fourth quarter and year-to-date 2007, diluted earnings per share was not more than 1 cent per share. — Tax credits associated with Southern Company's synthetic fuel investments expired December 31, 2007 and will not contribute to Southern Company's earnings and earnings per share after 2007. — Certain prior year data has been reclassified to conform with current year presentation. — Information contained in this report is subject to audit and adjustments. Certain classifications may be different from final results published in the Form 10-K. Southern Company Analysis of Consolidated Earnings (In Millions of Dollars) 3 Months Ended December Year-to-Date December 2007 2006 Change 2007 2006 Change Income Account- Retail Revenue- Fuel $1,102 $947 $155 $5,034 $4,475 $559 Non-Fuel 1,602 1,558 44 7,605 7,326 279 Wholesale Revenue 457 461 (4) 1,988 1,822 166 Other Electric Revenues 132 119 13 514 465 49 Non-regulated Operating Revenues 47 67 (20) 212 268 (56) Total Revenues 3,340 3,152 188 15,353 14,356 997 Fuel and Purchased Power 1,412 1,231 181 6,371 5,695 676 Non-fuel O & M 1,036 971 65 3,670 3,519 151 Depreciation and Amortization 316 304 12 1,245 1,200 45 Taxes Other Than Income Taxes 167 177 (10) 741 718 23 Total Operating Expenses 2,931 2,683 248 12,027 11,132 895 Operating Income 409 469 (60) 3,326 3,224 102 Other Income, net 54 5 49 177 29 148 Interest Charges and Dividends 230 240 (10) 934 900 34 Income Taxes 29 46 (17) 835 780 55 NET INCOME (See Notes) $204 $188 $16 $1,734 $1,573 $161 Kilowatt-Hour Sales (In Millions of KWHs) 3 Months Ended December Weather Adjusted As Reported (See Notes) 2007 2006 Change Change Kilowatt-Hour Sales- Total Sales 47,031 46,750 0.6% Total Retail Sales- 37,230 36,874 1.0% 0.6% Residential 10,914 11,031 -1.1% -0.8% Commercial 12,762 12,347 3.4% 2.2% Industrial 13,313 13,273 0.3% 0.1% Other 241 223 7.9% 7.9% Total Wholesale Sales 9,801 9,876 -0.8% N/A Year-to-Date December Weather Adjusted As Reported (See Notes) 2007 2006 Change Change Kilowatt-Hour Sales- Total Sales 204,360 199,795 2.3% Total Retail Sales- 163,614 161,334 1.4% 0.6% Residential 53,326 52,383 1.8% 0.4% Commercial 54,665 52,987 3.2% 2.2% Industrial 54,662 55,044 -0.7% -0.9% Other 961 920 4.4% 4.2% Total Wholesale Sales 40,746 38,461 5.9% N/A Notes — Certain prior year data has been reclassified to conform with current year presentation. — Information contained in this report is subject to audit and adjustments. Certain classifications may be different from final results published in the Form 10-K. Southern Company Financial Overview (In Millions of Dollars) 3 Months Ended December Year-to-Date December 2007 2006 % Change 2007 2006 % Change Consolidated - Operating Revenues $3,340 $3,152 6.0% $15,353 $14,356 6.9% Earnings Before Income Taxes 233 234 -0.6% 2,569 2,353 9.2% Net Income 204 188 8.3% 1,734 1,573 10.2% Alabama Power - Operating Revenues $1,192 $1,120 6.4% $5,360 $5,015 6.9% Earnings Before Income Taxes 114 136 -16.2% 967 873 10.8% Net Income Available to Common 71 80 -10.2% 580 518 11.9% Georgia Power - Operating Revenues $1,627 $1,579 3.0% $7,572 $7,246 4.5% Earnings Before Income Taxes 137 105 30.9% 1,260 1,234 2.0% Net Income Available to Common 117 76 54.4% 836 787 6.2% Gulf Power - Operating Revenues $289 $275 4.9% $1,260 $1,204 4.6% Earnings Before Income Taxes 14 10 37.7% 135 125 8.4% Net Income Available to Common 10 7 40.8% 84 76 10.7% Mississippi Power - Operating Revenues $251 $235 6.8% $1,114 $1,009 10.4% Earnings Before Income Taxes 7 11 -34.4% 138 132 4.4% Net Income Available to Common 4 7 -50.0% 84 82 2.5% Southern Power - Operating Revenues $188 $174 8.2% $972 $777 25.1% Earnings Before Income Taxes 11 44 -75.9% 215 206 4.3% Net Income Available to Common 8 27 -69.1% 132 124 5.8% Notes — Certain prior year data has been reclassified to conform with current year presentation. — Information contained in this report is subject to audit and adjustments. Certain classifications may be different from final results published in the Form 10-K.
SOURCE Southern Company
