UNITED STATES SECURITIES AND EXCHANGE COMMISSION. Washington, D. C FORM 8-K CURRENT REPORT

Transcription

1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) October 31, 2016 Commission File Number Registrant, State of Incorporation, Address and Telephone Number I.R.S. Employer Identification No The Southern Company (A Delaware Corporation) 30 Ivan Allen Jr. Blvd., N.W. Atlanta, Georgia (404) Alabama Power Company (An Alabama Corporation) 600 North 18 th Street Birmingham, Alabama (205) Georgia Power Company (A Georgia Corporation) 241 Ralph McGill Boulevard, N.E. Atlanta, Georgia (404) Gulf Power Company (A Florida Corporation) One Energy Place Pensacola, Florida (850) Mississippi Power Company (A Mississippi Corporation) 2992 West Beach Boulevard Gulfport, Mississippi (228) Southern Company Gas (A Georgia Corporation) Ten Peachtree Place N.E. Atlanta, Georgia (404) Southern Power Company (A Delaware Corporation) 30 Ivan Allen Jr. Blvd., N.W. Atlanta, Georgia (404) The names and addresses of the registrants have not changed since the last report.

2 This combined Form 8-K is furnished separately by seven registrants: The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Company Gas and Southern Power Company. Information contained herein relating to each registrant is furnished by each registrant solely on its own behalf. Each registrant makes no representation as to information relating to the other registrants. Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR ) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR e-4(c))

3 Item 2.02 Results of Operations and Financial Condition The information in this Current Report on Form 8-K, including the exhibits attached hereto, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibits attached hereto, shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing. On October 31, 2016, The Southern Company ( Southern Company ) issued a press release regarding its earnings for the three-month and nine-month periods ended 30, A copy of this release is being furnished as Exhibit to this Current Report on Form 8-K. In addition, certain additional information regarding the financial results for the three-month and ninemonth periods ended 30, 2016 is being furnished as Exhibits through to this Current Report on Form 8-K. Use of Non-GAAP Financial Measures Exhibits 99.01, 99.02, and to this Current Report on Form 8-K, in addition to including earnings and earnings per share in accordance with generally accepted accounting principles ( GAAP ) for the three-month and nine-month periods ended 30, 2016 and 2015, also include earnings and earnings per share (1) for the three-month and nine-month periods ended 30, 2016 and 2015 excluding charges for estimated probable losses relating to Mississippi Power Company s construction of the integrated coal gasification combined cycle facility in Kemper County, Mississippi (the Kemper IGCC ), (2) for the three-month and nine-month periods ended 30, 2016 and 2015 excluding costs related to the acquisition and integration of Southern Company Gas (formerly known as AGL Resources Inc.) and for the three-month and nine-month periods ended 30, 2016 excluding costs related to the acquisitions of PowerSecure International, Inc. and the 50% interest in Southern Natural Gas Company, L.L.C. ( SNG ), (3) for the nine-month period ended 30, 2015 excluding additional costs related to the discontinued operations of Mirant Corporation and the March 2009 settlement agreement with MC Asset Recovery, LLC ( MCAR ), (4) for the three-month and nine-month periods ended 30, 2016 excluding earnings related to the equity return related to the Kemper IGCC schedule extension beyond August 31, 2016, (5) for the three-month and nine-month periods ended 30, 2016 excluding earnings, net of acquisition and integration costs, related to Southern Company Gas, (6) for the three-month and nine-month periods ended 30, 2016 excluding the debt financing costs related to the acquisition of Southern Company Gas, and (7) for the three-month and nine-month periods ended 30, 2016 excluding common stock issued to finance a portion of the acquisition of the 50% interest in SNG. The attached exhibits include additional information regarding these excluded items, as well as reconciliations of each non-gaap financial measure to the most comparable financial measure under GAAP. Southern Company believes the presentation of earnings and earnings per share, excluding these items, is useful to investors because it provides investors with additional information to evaluate the performance of Southern Company s ongoing business activities. Southern Company management also uses earnings and earnings per share, excluding the effect of these items, to evaluate the performance of Southern Company s ongoing business activities. The presentation of this additional information is not meant to be considered a substitute for financial measures prepared in accordance with GAAP

4 Exhibits The exhibits hereto contain business segment information for Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Company Gas and Southern Power Company. Accordingly, this report is also being furnished on behalf of each such registrant. The following exhibits relate to the three-month and nine-month periods ended 30, 2016: Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Exhibit Press Release. Financial Highlights. Significant Factors Impacting EPS. EPS Earnings Analysis. Consolidated Earnings. Kilowatt-Hour Sales. Financial Overview

5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: October 31, 2016 THE SOUTHERN COMPANY By /s/ann P. Daiss Ann P. Daiss Comptroller ALABAMA POWER COMPANY GEORGIA POWER COMPANY GULF POWER COMPANY MISSISSIPPI POWER COMPANY SOUTHERN COMPANY GAS SOUTHERN POWER COMPANY By /s/melissa K. Caen Melissa K. Caen Assistant Secretary - 3 -

6 Exhibit News Media Contact: Southern Company Media Relations or Investor Relations Contact: Aaron Abramovitz October 31, 2016 Southern Company reports third quarter earnings ATLANTA - Southern Company today reported third quarter 2016 earnings of $1.1 billion, or $1.18 per share, compared with earnings of $1.0 billion, or $1.05 per share, in the third quarter of For the nine months ended 30, 2016, earnings were $2.2 billion, or $2.39 per share, compared with $2.1 billion, or $2.30 per share, for the same period in Excluding the items described in the Net Income - Excluding Items table below, Southern Company earned $1.2 billion, or $1.28 per share, during the third quarter of 2016, compared with $1.1 billion, or $1.17 per share, during the third quarter of For the nine months ended 30, 2016, excluding these items, Southern Company earned $2.5 billion, or $2.64 per share, compared with earnings of $2.2 billion, or $2.45 per share, for the same period in Non-GAAP Financial Measures Three Months Ended Year-to-Date Net Income - Excluding Items (in millions) Net Income - As Reported $1,145 $959 $2,242 $2,096 Estimated Loss on Kemper IGCC Tax Impact (24) (57) (76) (70) Acquisition and Integration Costs Tax Impact (14) (4) (34) (4) Additional MCAR Settlement Costs Tax Impact (3) Subtotal $1,213 $1,064 $2,436 $2,224 Earnings Guidance Comparability Items: Equity Return Related to Kemper IGCC Schedule Extension (7) - (7) - Tax Impact (1) - (1) - Southern Company Gas Earnings, net of Acquisition and Integration Costs (46) - (46) - Tax Impact Acquisition Debt Financing Costs Tax Impact (26) - (41) - Net Income - Excluding Items $1,219 $1,064 $2,466 $2,224 Adjusted Average Shares Outstanding - Acquisition Financing (in millions) Basic Earnings Per Share - Excluding Items $1.28 $1.17 $2.64 $2.45 NOTE: For more information regarding these non-gaap adjustments, see the footnotes accompanying the Financial Highlights page of the earnings package.

7 Earnings drivers for the third quarter of 2016 were positively influenced by warmer than normal weather, retail revenue effects at Southern Company s traditional electric operating companies and stronger-than-expected performance of its Southern Power subsidiary. Earnings were negatively influenced by increased shares outstanding. We are pleased with the performance of our electric and gas businesses so far this year, including the strong performance of our wholesale generation subsidiary, Southern Power, said Southern Company Chairman, President and CEO Thomas A. Fanning. For the first time, our reported earnings include results from Southern Company Gas, including the recent investment in the Southern Natural Gas pipeline. With these investments and the recently announced strategic alliance between our PowerSecure subsidiary and Bloom Energy, Southern Company continues to build the future of energy for the benefit of the customers and communities we are privileged to serve. Third quarter 2016 operating revenues were $6.3 billion, compared with $5.4 billion for the third quarter of 2015, an increase of 16.0 percent. Southern Company Gas accounted for $0.5 billion of the increase in operating revenues for the third quarter of For the nine months ended 30, 2016, operating revenues were $14.7 billion, compared with $13.9 billion for the same period in 2015, an increase of 5.7 percent. Southern Company s third quarter earnings slides with supplemental financial information, including its earnings estimate for the fourth quarter of 2016, earnings guidance for 2017 and the company s financial outlook for the next five years, are included in the October 31, 2016 Analyst Day materials available at Southern Company s Analyst Day presentation will begin at 8:45 a.m. Eastern Time today, during which Fanning, Chief Financial Officer Art P. Beattie and other members of the company s executive management team will discuss earnings, provide a general business update and discuss the company s long-term outlook. Investors, media and the public may listen to a live webcast of the call and view associated slides at A replay of the webcast will be available on the site for 12 months. About Southern Company Southern Company (NYSE: SO) is America s premier energy company, with 44,000 megawatts of generating capacity and 1,500 billion cubic feet of combined natural gas consumption and throughput volume serving 9 million electric and gas utility customers through its subsidiaries. The company provides clean, safe, reliable and affordable energy through electric utilities in four states, natural gas distribution utilities in seven states, a competitive generation company serving wholesale customers across America and a nationally recognized provider of customized energy solutions, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and affordable prices that are below the national average. Through an industry-leading commitment to innovation, Southern Company and its subsidiaries are inventing America s energy future by developing the full portfolio of energy resources, including carbon-free nuclear, 21 st century coal, natural gas, renewables and energy efficiency, and creating new products and services for the benefit of customers. Southern Company has been named by the U.S. Department of Defense and G.I. Jobs magazine as a top military employer, recognized among the Top 50 Companies for Diversity by DiversityInc, listed by Black Enterprise magazine as one of the 40 Best Companies for Diversity and designated a Top Employer for Hispanics by Hispanic Network. The company has earned a National Award of Nuclear Science and History from the National Atomic Museum Foundation for its leadership and commitment to nuclear development and is continually ranked among the top utilities in Fortune's annual World s Most Admired Electric and Gas Utility rankings. Visit our website at # # #

8 Southern Company Financial Highlights (In Millions of Dollars Except Earnings Per Share) Exhibit Page 1 Three Months Ended Year-to-Date Net Income As Reported (See Notes) Traditional Electric Operating Companies $ 1,033 $ 874 $ 2,092 $ 1,912 Southern Power Southern Company Gas 4 4 Total 1, ,411 2,093 Parent Company and Other (68) (17) (169) 3 Net Income As Reported $ 1,145 $ 959 $ 2,242 $ 2,096 Basic Earnings Per Share 1 $ 1.18 $ 1.05 $ 2.39 $ 2.30 Average Shares Outstanding (in millions) End of Period Shares Outstanding (in millions) Non-GAAP Financial Measures Three Months Ended Year-to-Date Net Income Excluding Items (See Notes) Net Income As Reported $ 1,145 $ 959 $ 2,242 $ 2,096 Estimated Loss on Kemper IGCC Tax Impact (24) (57) (76) (70) Acquisition and Integration Costs Tax Impact (14) (4) (34) (4) Additional MCAR Settlement Costs 4 7 Tax Impact (3) Subtotal $ 1,213 $ 1,064 $ 2,436 $ 2,224 Earnings Guidance Comparability Items: Equity Return Related to Kemper IGCC Schedule Extension 5 (7) (7) Tax Impact (1) (1) Southern Company Gas Earnings, net of Acquisition and Integration Costs 6 (46) (46) Tax Impact Acquisition Debt Financing Costs Tax Impact (26) (41) Net Income Excluding Items $ 1,219 $ 1,064 $ 2,466 $ 2,224 Adjusted Average Shares Outstanding - Acquisition Financing 6 (in millions) Basic Earnings Per Share Excluding Items $ 1.28 $ 1.17 $ 2.64 $ 2.45 Notes - All figures in this earnings release are preliminary and remain subject to the completion of normal quarter-end accounting procedures and adjustments, which could result in changes to these preliminary results. In addition, certain classifications and rounding may be different

9 from final results published in the Form 10-Q. -See Notes on the following page.

10 Southern Company Financial Highlights Exhibit Page 2 Notes (1) For the three and nine months ended 30, 2016 and 2015, dilution does not change basic earnings per share by more than 2 cents and is not material. (2) The estimated probable losses relating to Mississippi Power Company's construction of the integrated coal gasification combined cycle facility in Kemper County, Mississippi (Kemper IGCC) significantly impacted the presentation of earnings and earnings per share for the three and nine months ended 30, 2016 and Similar charges of uncertain amounts may occur with uncertain frequency in future periods. (3) Earnings for the three and nine months ended 30, 2016 and 2015 include costs related to the acquisition of Southern Company Gas and earnings for the three and nine months ended 30, 2016 include costs related to the acquisitions of PowerSecure International, Inc. and the 50% interest in Southern Natural Gas Company, L.L.C. (SNG). Further costs are expected to continue to occur in connection with the related integration activities; however, the amount and duration of such expenditures is uncertain. (4) Earnings for the nine months ended 30, 2015 include additional costs related to the discontinued operations of Mirant Corporation and the March 2009 litigation settlement with MC Asset Recovery, LLC. Further charges are not expected to occur. (5) Earnings for the three and nine months ended 30, 2016 include additional allowance for funds used during construction (AFUDC) equity as a result of extending the schedule for the Kemper IGCC construction project. Southern Company's February 2016 earnings guidance assumed construction would be complete and AFUDC equity would cease by August 31, As a result, Southern Company believes presentation of earnings per share excluding these amounts provides investors with information comparable to the February guidance. Management also uses such measures to evaluate Southern Company's performance in (6) Earnings for the three and nine months ended 30, 2016 include the earnings of Southern Company Gas since July 1, 2016 (the date of acquisition), as well as debt financing costs related to the acquisition. Earnings of Southern Company Gas since 1, 2016 include amounts related to its acquisition of a 50% ownership interest in SNG. In addition, earnings per share for the three and nine months ended 30, 2016 include the impact of 22,312,373 shares ($1.1 billion) of common stock issued in August 2016 to finance a portion of the purchase price for the SNG acquisition. The timing of completion of the acquisition of Southern Company Gas was uncertain at the time Southern Company issued earnings per share guidance in February 2016, and Southern Company's agreement to acquire a 50% interest in SNG did not occur until July Accordingly, Southern Company's February 2016 guidance did not reflect any earnings contribution from these acquisitions or the financing costs related to the acquisitions. As a result, Southern Company believes presentation of earnings per share excluding these items provides investors with information comparable to the February guidance. Management also uses such measures to evaluate Southern Company's performance in In addition to earnings and earnings per share calculated in accordance with U.S. generally accepted accounting principles (GAAP), Southern Company intends to continue to present earnings and earnings per share excluding the impact of the Wholesale Gas Services business of Southern Company Gas in future periods. Presenting earnings and earnings per share excluding Wholesale Gas Services provides investors with an additional measure of operating performance that excludes the volatility that results from mark-to-market and lower of weighted average cost or current market price accounting adjustments. Management also expects to use earnings and earnings per share excluding Wholesale Gas Services to evaluate Southern Company's performance. For the three and nine months ended 30, 2016, the loss from Wholesale Gas Services and the related tax benefit were $18 million and $7 million, respectively.

11 Southern Company Significant Factors Impacting EPS Exhibit Page 1 Three Months Ended Year-to-Date Change Change Earnings Per Share As Reported 1 (See Notes) $ 1.18 $ 1.05 $ 0.13 $ 2.39 $ 2.30 $ 0.09 Significant Factors: Traditional Electric Operating Companies $ 0.18 $ 0.20 Southern Power Southern Company Gas Parent Company and Other (0.06) (0.19) Increase in Shares (0.08) (0.08) Total As Reported $ 0.13 $ 0.09 Three Months Ended Year-to-Date Non-GAAP Financial Measures Change Change Earnings Per Share Excluding Items (See Notes) $ 1.28 $ 1.17 $ 0.11 $ 2.64 $ 2.45 $ 0.19 Total As Reported $ 0.13 $ 0.09 Estimated Loss on Kemper IGCC 2 (0.07) Acquisition and Integration Costs Additional MCAR Settlement Costs 4 (0.01) Equity Return Related to Kemper IGCC Schedule Extension 5 (0.01) (0.01) Southern Company Gas Earnings, net of Acquisition and Integration Costs 6 (0.03) (0.03) Acquisition Debt Financing Costs Additional Shares Issued for SNG Acquisition Total Excluding Items $ 0.11 $ 0.19 Notes - All figures in this earnings release are preliminary and remain subject to the completion of normal quarter-end accounting procedures and adjustments, which could result in changes to these preliminary results. In addition, certain classifications and rounding may be different from final results published in the Form 10-Q. - See Notes on the following page.

12 Southern Company Significant Factors Impacting EPS Exhibit Page 2 Notes (1) For the three and nine months ended 30, 2016 and 2015, dilution does not change basic earnings per share by more than 2 cents and is not material. (2) The estimated probable losses relating to Mississippi Power Company's construction of the integrated coal gasification combined cycle facility in Kemper County, Mississippi (Kemper IGCC) significantly impacted the presentation of earnings and earnings per share for the three and nine months ended 30, 2016 and Similar charges of uncertain amounts may occur with uncertain frequency in future periods. (3) Earnings for the three and nine months ended 30, 2016 and 2015 include costs related to the acquisition of Southern Company Gas and earnings for the three and nine months ended 30, 2016 include costs related to the acquisitions of PowerSecure International, Inc. and the 50% interest in Southern Natural Gas Company, L.L.C. (SNG). Further costs are expected to continue to occur in connection with the related integration activities; however, the amount and duration of such expenditures is uncertain. (4) Earnings for the nine months ended 30, 2015 include additional costs related to the discontinued operations of Mirant Corporation and the March 2009 litigation settlement with MC Asset Recovery, LLC. Further charges are not expected to occur. (5) Earnings for the three and nine months ended 30, 2016 include additional allowance for funds used during construction (AFUDC) equity as a result of extending the schedule for the Kemper IGCC construction project. Southern Company's February 2016 earnings guidance assumed construction would be complete and AFUDC equity would cease by August 31, As a result, Southern Company believes presentation of earnings per share excluding these amounts provides investors with information comparable to the February guidance. Management also uses such measures to evaluate Southern Company's performance in (6) Earnings for the three and nine months ended 30, 2016 include the earnings of Southern Company Gas since July 1, 2016 (the date of acquisition), as well as debt financing costs related to the acquisition. Earnings of Southern Company Gas since 1, 2016 include amounts related to its acquisition of a 50% ownership interest in SNG. In addition, earnings per share for the three and nine months ended 30, 2016 include the impact of 22,312,373 shares ($1.1 billion) of common stock issued in August 2016 to finance a portion of the purchase price for the SNG acquisition. The timing of completion of the acquisition of Southern Company Gas was uncertain at the time Southern Company issued earnings per share guidance in February 2016, and Southern Company's agreement to acquire a 50% interest in SNG did not occur until July Accordingly, Southern Company's February 2016 guidance did not reflect any earnings contribution from these acquisitions or the financing costs related to the acquisitions. As a result, Southern Company believes presentation of earnings per share excluding these items provides investors with information comparable to the February guidance. Management also uses such measures to evaluate Southern Company's performance in In addition to earnings and earnings per share calculated in accordance with U.S. generally accepted accounting principles (GAAP), Southern Company intends to continue to present earnings and earnings per share excluding the impact of the Wholesale Gas Services business of Southern Company Gas in future periods. Presenting earnings and earnings per share excluding Wholesale Gas Services provides investors with an additional measure of operating performance that excludes volatility that results from mark-to-market and lower of weighted average cost or current market price accounting adjustments. Management also expects to use earnings and earnings per share excluding Wholesale Gas Services to evaluate Southern Company's performance. For the three and nine months ended 30, 2016, the loss from Wholesale Gas Services and the related tax benefit were $18 million and $7 million, respectively.

13 Southern Company EPS Earnings Analysis Three Months Ended 2016 vs Exhibit Page 1 Cents Description (2) Retail Sales 8 Retail Revenue Impacts 11 Weather (1) Wholesale Operations 1 Other Operating Revenues (1) Non-Fuel O&M (1) Depreciation and Amortization (1) Taxes Other Than Income Taxes Notes (2) Other Income and Deductions (1) Interest Expense 11 Total Traditional Electric Operating Companies 8 Southern Power (2) Parent and Other (Excluding Items) 1 (6) Increase in Shares (Excluding Items) 2 11 Total Change in QTD EPS (Excluding Items) 7 Estimated Loss on Kemper IGCC 3 (2) Acquisition and Integration Costs 4 1 Equity Return Related to Kemper IGCC Schedule Extension 5 3 Southern Company Gas Earnings, net of Acquisition and Integration Costs 6 (5) Acquisition Debt Financing Costs 6 (2) Increase in Shares Issued for the Acquisition of a 50% Interest in SNG 6 13 Total Change in QTD EPS (As Reported) - All figures in this earnings release are preliminary and remain subject to the completion of normal quarter-end accounting procedures and adjustments, which could result in changes to these preliminary results. In addition, certain classifications and rounding may be different from final results published in the Form 10-Q. - See Notes on the following page.

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15 Notes Southern Company EPS Earnings Analysis Three Months Ended 2016 vs Exhibit Page 2 (1) Excludes Acquisition Debt Financing Costs, which are identified separately in the table. (2) Excludes the impact of 22,312,373 shares ($1.1 billion) of common stock issued in August 2016 to finance a portion of the purchase price for the Southern Natural Gas Company, L.L.C. (SNG) acquisition which is identified separately in the table. (3) The estimated probable losses relating to Mississippi Power Company's construction of the integrated coal gasification combined cycle facility in Kemper County, Mississippi (Kemper IGCC) significantly impacted the presentation of earnings and earnings per share for the three months ended 30, 2016 and Similar charges of uncertain amounts may occur with uncertain frequency in future periods. (4) Earnings for the three months ended 30, 2016 and 2015 include costs related to the acquisition of Southern Company Gas and earnings for the three months ended 30, 2016 include costs related to the acquisitions of PowerSecure International, Inc. and the 50% interest in SNG. Further costs are expected to continue to occur in connection with the related integration activities; however, the amount and duration of such expenditures is uncertain. (5) Earnings for the three and nine months ended 30, 2016 include additional allowance for funds used during construction (AFUDC) equity as a result of extending the schedule for the Kemper IGCC construction project. Southern Company's February 2016 earnings guidance assumed construction would be complete and AFUDC equity would cease by August 31, As a result, Southern Company believes presentation of earnings per share excluding these amounts provides investors with information comparable to the February guidance. Management also uses such measures to evaluate Southern Company's performance in (6) Earnings for the three months ended 30, 2016 include the earnings of Southern Company Gas since July 1, 2016 (the date of acquisition), as well as debt financing costs related to the acquisition. Earnings of Southern Company Gas since 1, 2016 include amounts related to its acquisition of a 50% ownership interest in SNG. In addition, earnings per share for the three months ended 30, 2016 include the impact of 22,312,373 shares ($1.1 billion) of common stock issued in August 2016 to finance a portion of the purchase price for the SNG acquisition. The timing of completion of the acquisition of Southern Company Gas was uncertain at the time Southern Company issued earnings per share guidance in February 2016, and Southern Company's agreement to acquire a 50% interest in SNG did not occur until July Accordingly, Southern Company's February 2016 guidance did not reflect any earnings contribution from these acquisitions or the financing costs related to the acquisitions. As a result, Southern Company believes presentation of earnings per share excluding these items provides investors with information comparable to the February guidance. Management also uses such measures to evaluate Southern Company's performance in In addition to earnings and earnings per share calculated in accordance with U.S. generally accepted accounting principles (GAAP), Southern Company intends to continue to present earnings and earnings per share excluding the impact of the Wholesale Gas Services business of Southern Company Gas in future periods. Presenting earnings and earnings per share excluding Wholesale Gas Services provides investors with an additional measure of operating performance that excludes the volatility that results from mark-to-market and lower of weighted average cost or current market price accounting adjustments. Management also expects to use earnings and earnings per share excluding Wholesale Gas Services to evaluate Southern Company's performance. For the three months ended 30, 2016, the loss from Wholesale Gas Services and the related tax benefit were $18 million and $7 million, respectively.

16 Southern Company Consolidated Earnings As Reported (In Millions of Dollars) Exhibit Year-to-Date Three Months Ended Change Change Income Account- Retail Electric Revenues- Fuel $ 1,296 $ 1,432 $ (136) $ 3,169 $ 3,651 $ (482) Non-Fuel 3,512 3, ,763 8, Wholesale Electric Revenues ,455 1, Other Electric Revenues Natural Gas Revenues Other Revenues Total Revenues 6,264 5, ,715 13, Fuel and Purchased Power 1,627 1,713 (86) 3,915 4,439 (524) Cost of Natural Gas Cost of Other Sales Non-Fuel O & M 1,411 1, ,616 3, Depreciation and Amortization ,805 1, Taxes Other Than Income Taxes Estimated Loss on Kemper IGCC (87) Total Operating Expenses 4,322 3, ,648 10, Operating Income 1,942 1, ,067 3, Allowance for Equity Funds Used During Construction (8) (13) Interest Expense, Net of Amounts Capitalized Other Income (Expense), net 21 (21) 42 (38) (41) 3 Income Taxes (42) 951 1,076 (125) Net Income 1, ,315 2, Less: Dividends on Preferred and Preference Stock of Subsidiaries (8) Net Income Attributable to Noncontrolling Interests NET INCOME ATTRIBUTABLE TO SOUTHERN COMPANY $ 1,145 $ 959 $ 186 $ 2,242 $ 2,096 $ 146 Notes - Certain prior year data may have been reclassified to conform with current year presentation. - All figures in this earnings release are preliminary and remain subject to the completion of normal quarter-end accounting procedures and adjustments, which could result in changes to these preliminary results. In addition, certain classifications and rounding may be different from final results published in the Form 10-Q.

17 Southern Company Kilowatt-Hour Sales (In Millions of KWHs) Exhibit Three Months Ended Year-to-Date Weather Adjusted As Reported Change Change Change Kilowatt-Hour Sales- Total Sales 58,051 54, % 151, , % Weather Adjusted Change* Total Retail Sales- 47,071 45, % (1.4)% 124, ,895 (0.3)% (0.8)% Residential 17,213 15, % (0.4)% 42,257 41, % 0.2 % Commercial 15,805 15, % (0.7)% 41,509 41, % (0.6)% Industrial 13,833 14,305 (3.3)% (3.3)% 40,102 40,938 (2.0)% (2.1)% Other % 0.7 % (1.0)% (0.9)% Total Wholesale Sales 10,980 9, % N/A 26,564 24, % N/A Note *Also reflects adjustment of 2015 KWH sales consistent with Mississippi Power's updated methodology to estimate the unbilled revenue allocation among customer classes implemented in the first quarter 2015.

18 Southern Company Financial Overview As Reported (In Millions of Dollars) Exhibit Three Months Ended Year-to-Date % Change % Change Southern Company Operating Revenues $ 6,264 $ 5, % $ 14,715 $ 13, % Earnings Before Income Taxes 1,641 1, % 3,266 3, % Net Income Available to Common 1, % 2,242 2, % Alabama Power Operating Revenues $ 1,785 $ 1, % $ 4,561 $ 4, % Earnings Before Income Taxes % 1,196 1, % Net Income Available to Common % % Georgia Power Operating Revenues $ 2,698 $ 2, % $ 6,621 $ 6,685 (1.0)% Earnings Before Income Taxes % 1,964 1, % Net Income Available to Common % 1,214 1, % Gulf Power Operating Revenues $ 436 $ % $ 1,136 $ 1,170 (2.9)% Earnings Before Income Taxes (4.9)% (6.4)% Net Income Available to Common (6.3)% (10.0)% Mississippi Power Operating Revenues $ 352 $ % $ 885 $ 893 (0.9)% Earnings (Loss) Before Income Taxes 48 (52) N/M (32.7)% Net Income (Loss) Available to Common 41 (21) N/M (12.9)% Southern Power Operating Revenues $ 500 $ % $ 1,189 $ 1, % Earnings Before Income Taxes (9.8)% (11.0)% Net Income Available to Common % % Southern Company Gas Operating Revenues $ 543 $ N/A $ 543 $ N/A Earnings Before Income Taxes 11 N/A 11 N/A Net Income Available to Common 4 N/A 4 N/A N/M - not meaningful N/A - not applicable Note - All figures in this earnings release are preliminary and remain subject to the completion of normal quarter-end accounting procedures and adjustments, which could result in changes to these preliminary results. In addition, certain classifications and rounding may be different from final results published in the Form 10-Q.

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