Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of specific impacts of applying ASC 606 to revenues from contracts with customers

The specific impacts of applying ASC 606 to revenues from contracts with customers on the financial statements of Southern Company, Alabama Power, Georgia Power, and Southern Company Gas compared to previously recognized guidance is shown below.



	For the Year Ended December 31, 2018
Statements of Income	As Reported		Balances Without Adoption of ASC 606		Effect of Change
	(in millions)
Southern Company
Natural gas revenues	$	3,854	$	3,852	$	2
Other revenues	1,239		1,234		5
Other operations and maintenance	5,889		5,830		59
Operating Income	4,191		4,243		(52		)
Other income (expense), net	114		60		54
Earnings Before Income Taxes	2,749		2,747		2
Income taxes	449		448		1
Consolidated Net Income	2,300		2,299		1
Consolidated Net Income Attributable to Southern Company	2,226		2,225		1

Alabama Power
Other revenues	$	267	$	230	$	37
Other operations and maintenance	1,669		1,625		44
Taxes other than income taxes	389		388		1
Operating Income	1,477		1,485		(8		)
Other income (expense), net	20		12		8

Georgia Power
Other revenues	$	481	$	387	$	94
Other operations and maintenance	1,860		1,772		88
Operating Income	1,289		1,283		6
Other income (expense), net	115		121		(6		)

Southern Company Gas
Natural gas revenues	$	3,874	$	3,872	$	2
Operating Income	915		913		2
Earnings Before Income Taxes	836		834		2
Income taxes	464		463		1
Net Income	372		371		1



	For the Year Ended December 31, 2018
Statements of Cash Flows	As Reported			Balances Without Adoption of ASC 606			Effect of Change
	(in millions)
Southern Company
Consolidated net income	$	2,300		$	2,299		$	1
Changes in certain current assets and liabilities:
Receivables	(426		)	(472		)	46
Other current assets	(127		)	(81		)	(46		)
Accrued taxes	267			268			(1		)
Other current liabilities	63			61			2

Georgia Power
Changes in certain current assets and liabilities:
Receivables	$	8		$	1		$	7
Other current assets	(43		)	(36		)	(7		)

Southern Company Gas
Net income	$	372		$	371		$	1
Changes in certain current assets and liabilities:
Accrued taxes	10			11			(1		)
Other current liabilities	(22		)	(24		)	2



	At December 31, 2018
Balance Sheets	As Reported		Balances Without Adoption of ASC 606		Effect of Change
	(in millions)
Southern Company
Unbilled revenues	$	654	$	728	$	(74	)
Other accounts and notes receivable	813		814		(1		)
Other current assets	162		87		75
Accrued taxes	656		655		1
Other current liabilities	852		854		(2		)
Total Stockholders' Equity	29,039		29,038		1

Georgia Power
Unbilled revenues	$	208	$	243	$	(35	)
Other accounts and notes receivable	80		81		(1		)
Other current assets	70		34		36

Southern Company Gas
Accrued income taxes	$	66	$	65	$	1
Other current liabilities	130		132		(2		)
Common Stockholder's Equity	8,570		8,569		1

Schedule of costs for affiliate transactions

Transportation costs under these agreements in 2018, 2017, and 2016 were as follows:



	Alabama Power		Georgia Power		Southern Power		Southern Company Gas
	(in millions)
2018	$	8	$	101	$	25	$	32
2017	9		102		25		32
2016^(*)	2		35		7		15


(*)	Represents costs incurred for the period subsequent to Southern Company Gas' investment in SNG.

On November 16, 2018, SNG completed its purchase of Georgia Power's natural gas lateral pipeline serving Plant McDonough Units 4 through 6 at net book value, as approved by the Georgia PSC on January 16, 2018. SNG expects to pay $142 million to Georgia Power in the first quarter 2020. During the interim period, Georgia Power will receive a discounted shipping rate to reflect the delayed consideration. Southern Company Gas' portion of the expected capital expenditures for the purchase of this pipeline and additional construction is $122 million.

SCS, as agent for the traditional electric operating companies and Southern Power, has agreements with certain subsidiaries of Southern Company Gas to purchase natural gas. Natural gas purchases made under these agreements were immaterial for Alabama Power and Mississippi Power and as follows for Georgia Power and Southern Power in 2018, 2017, and 2016:



	Georgia Power		Southern Power
	(in millions)
2018	$	21	$	119
2017	22		119
2016^(*)	10		17


(*)	Represents costs incurred for the period subsequent to Southern Company's acquisition of Southern Company Gas.

Mississippi Power's and Southern Power's total power purchased from affiliates through the power pool is included in purchased power on their respective statements of income and was as follows:



	Mississippi Power		Southern Power
	(in millions)
2018	$	15	$	41
2017	16		27
2016	29		21

Costs for these services from SCS in 2018, 2017, and 2016 were as follows:



	Alabama Power		Georgia Power		Mississippi Power		Southern Power^(a)		Southern Company Gas^(b)
	(in millions)
2018	$	508	$	653	$	104	$	98	$	194
2017	479		625		140		218		63
2016	460		606		231		193		17


(a)	Prior to December 2017, Southern Power had no employees but was billed for employee-related costs from SCS.


(b)	Southern Company Gas' 2016 costs represent services provided subsequent to the Merger.

The approximate rates for 2018, 2017, and 2016 are as follows:



	2018		2017		2016
	(percent)
Alabama Power	3.0	%	2.9	%	3.0	%
Georgia Power	2.6	%	2.7	%	2.8	%
Mississippi Power^(*)	4.1	%	3.7	%	4.2	%
Southern Company Gas	2.9	%	2.9	%	2.8	%


(*)	Mississippi Power's decrease in 2017 is primarily the result of recording a loss on its lignite mine in June 2017.

Schedule of concentration of revenue

The following table shows the percentage of total revenues for Southern Power's top three customers for each of the years presented:



	2018		2017		2016
Georgia Power	9.8	%	11.3	%	16.5	%
Duke Energy Corporation	6.8	%	6.7	%	7.8	%
Southern California Edison	6.2	%	N/A		N/A
Morgan Stanley Capital Group	N/A		4.5	%	N/A
San Diego Gas & Electric Company	N/A		N/A		5.7	%

Schedule of total AFUDC and interest capitalized

Total AFUDC and interest capitalized for the registrants in 2018, 2017, and 2016 was as follows:



	Southern Company		Alabama Power		Georgia Power^(a)		Mississippi Power^(b)		Southern Power
	(in millions)
2018	$	210	$	84	$	94	$	—	$	17
2017	249		54		63		72		11
2016	327		39		68		124		44


(a)	See Note 2 under "Georgia Power – Nuclear Construction" for information on the inclusion of a portion of construction costs related to Plant Vogtle Units 3 and 4 in Georgia Power's rate base.


(b)	Mississippi Power's decrease in 2017 resulted from the Kemper IGCC project suspension in June 2017.



	Successor						Predecessor
	Year Ended December 31, 2018		Year Ended December 31, 2017		July 1, 2016 through December 31, 2016		January 1, 2016 through June 30, 2016
	(in millions)						(in millions)
Southern Company Gas	$	14	$	19	$	6	$	4

Schedule of average AFUDC composite rates

The average AFUDC composite rates for 2018, 2017, and 2016 for the traditional electric operating companies and Southern Company Gas were as follows:



	Alabama Power		Georgia Power		Mississippi Power
2018	8.3	%	7.3	%	3.3	%
2017	8.3	%	5.6	%	6.7	%
2016	8.2	%	6.9	%	6.5	%



	Successor						Predecessor
	Year Ended December 31, 2018		Year Ended December 31, 2017		July 1, 2016 through December 31, 2016		January 1, 2016 through June 30, 2016
Southern Company Gas:
Atlanta Gas Light^(a)	7.9	%	8.1	%	4.1	%	4.1	%
Chattanooga Gas^(a)	7.4	%	7.4	%	3.7	%	3.7	%
Nicor Gas^(b)	2.1	%	1.2	%	1.5	%	1.5	%


(a)	Fixed rates authorized by the Georgia PSC and Tennessee Public Utilities Commission for Atlanta Gas Light and Chattanooga Gas, respectively.


(b)	Variable rate determined by the FERC method of AFUDC accounting.

Schedule of goodwill balances

The following table presents 2018 changes in goodwill balances for Southern Company and Southern Company Gas:



	Southern Company				Southern Company Gas
	Southern Company				Gas Distribution Operations			Gas Marketing Services
	(in millions)
Balance at December 31, 2017	$	6,268			$	4,702		$	1,265
Impairment^(a)	(42		)		—			(42		)
Dispositions^(b)	(910		)		(668		)	(242		)
Balance at December 31, 2018	$	5,315		^(c)	$	4,034		$	981


(a)	On April 11, 2018, Southern Company Gas entered into a stock purchase agreement for the sale of Pivotal Home Solutions. In contemplation of this transaction and based on the purchase price, a goodwill impairment charge of $42 million was recorded in the first quarter 2018. See Note 15 under "Southern Company Gas" for additional information.


(b)	Gas distribution operations reflects goodwill allocated to Elizabethtown Gas, Elkton Gas, and Florida City Gas, which were sold during the third quarter 2018. Gas marketing services reflects goodwill associated with Pivotal Home Solutions, which was sold on June 4, 2018. See Note 15 under "Southern Company Gas" for additional information.


(c)	Total does not add due to rounding.

Schedule of intangible assets subject to amortization

At December 31, 2018 and 2017, other intangible assets were as follows:



	At December 31, 2018							At December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net		Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net
	(in millions)							(in millions)
Southern Company
Other intangible assets subject to amortization:
Customer relationships^(a)	$	223	$	(94	)	$	129	$	288	$	(83	)	$	205
Trade names^(a)	70		(21		)	49		159		(17		)	142
Storage and transportation contracts	64		(54		)	10		64		(34		)	30
PPA fair value adjustments^(b)	405		(61		)	344		456		(47		)	409
Other	11		(5		)	6		17		(5		)	12
Total other intangible assets subject to amortization	$	773	$	(235	)	$	538	$	984	$	(186	)	$	798
Other intangible assets not subject to amortization:
Federal Communications Commission licenses	75		—			75		75		—			75
Total other intangible assets	$	848	$	(235	)	$	613	$	1,059	$	(186	)	$	873

Southern Power
Other intangible assets subject to amortization:
PPA fair value adjustments^(b)	$	405	$	(61	)	$	344	$	456	$	(47	)	$	409

Southern Company Gas
Other intangible assets subject to amortization:
Gas marketing services^(a)
Customer relationships	$	156	$	(84	)	$	72	$	221	$	(77	)	$	144
Trade names	26		(7		)	19		115		(9		)	106
Wholesale gas services
Storage and transportation contracts	64		(54		)	10		64		(34		)	30
Total other intangible assets subject to amortization	$	246	$	(145	)	$	101	$	400	$	(120	)	$	280


(a)	Balances as of December 31, 2018 reflect the sale of Pivotal Home Solutions. See Note 15 under "Southern Company Gas – Sale of Pivotal Home Solutions" for additional information.


(b)	Balances as of December 31, 2018 exclude Plant Mankato-related intangible assets that were reclassified as assets held for sale. See Note 15 under "Southern Power – Sales of Natural Gas Plants" for additional information.

Schedule of intangible assets not subject to amortization

At December 31, 2018 and 2017, other intangible assets were as follows:



	At December 31, 2018							At December 31, 2017
	Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net		Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net
	(in millions)							(in millions)
Southern Company
Other intangible assets subject to amortization:
Customer relationships^(a)	$	223	$	(94	)	$	129	$	288	$	(83	)	$	205
Trade names^(a)	70		(21		)	49		159		(17		)	142
Storage and transportation contracts	64		(54		)	10		64		(34		)	30
PPA fair value adjustments^(b)	405		(61		)	344		456		(47		)	409
Other	11		(5		)	6		17		(5		)	12
Total other intangible assets subject to amortization	$	773	$	(235	)	$	538	$	984	$	(186	)	$	798
Other intangible assets not subject to amortization:
Federal Communications Commission licenses	75		—			75		75		—			75
Total other intangible assets	$	848	$	(235	)	$	613	$	1,059	$	(186	)	$	873

Southern Power
Other intangible assets subject to amortization:
PPA fair value adjustments^(b)	$	405	$	(61	)	$	344	$	456	$	(47	)	$	409

Southern Company Gas
Other intangible assets subject to amortization:
Gas marketing services^(a)
Customer relationships	$	156	$	(84	)	$	72	$	221	$	(77	)	$	144
Trade names	26		(7		)	19		115		(9		)	106
Wholesale gas services
Storage and transportation contracts	64		(54		)	10		64		(34		)	30
Total other intangible assets subject to amortization	$	246	$	(145	)	$	101	$	400	$	(120	)	$	280


(a)	Balances as of December 31, 2018 reflect the sale of Pivotal Home Solutions. See Note 15 under "Southern Company Gas – Sale of Pivotal Home Solutions" for additional information.


(b)	Balances as of December 31, 2018 exclude Plant Mankato-related intangible assets that were reclassified as assets held for sale. See Note 15 under "Southern Power – Sales of Natural Gas Plants" for additional information.

Schedule of amortization associated with other intangible assets

Amortization associated with other intangible assets in 2018, 2017, and 2016 was as follows:



	2018		2017		2016
	(in millions)
Southern Company	$	89	$	124	$	50
Southern Power	$	25	$	25	$	10



	Successor						Predecessor
	Year Ended December 31, 2018		Year Ended December 31, 2017		July 1, 2016 through December 31, 2016		January 1, 2016 through June 30, 2016
	(in millions)						(in millions)
Southern Company Gas:
Wholesale gas services^(a)	$	20	$	32	$	2	$	—
Gas marketing services^(b)	32		54		32		8


(a)	Recorded as a reduction to operating revenues.


(b)	Included in depreciation and amortization.

Schedule of amortization of other intangible assets

At December 31, 2018, the estimated amortization associated with other intangible assets for the next five years is as follows:



	2019		2020		2021		2022		2023
	(in millions)
Southern Company^(*)	$	61	$	50	$	43	$	39	$	38
Southern Power^(*)	20		20		20		20		20
Southern Company Gas	29		19		13		10		9


(*)	Excludes amounts related to held for sale assets. See Note 15 under "Southern Power – Sales of Natural Gas Plants" for additional information.

Reconciliation of cash, and cash equivalents

The following tables provide a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets that total to the amounts shown in the statements of cash flows for the registrants that had restricted cash at December 31, 2018 and/or 2017:



	Southern Company		Georgia Power		Southern Company Gas
	(in millions)
At December 31, 2018
Cash and cash equivalents	$	1,396	$	4	$	64
Cash and cash equivalents classified as assets held for sale	9		—		—
Restricted cash:
Restricted cash	—		108		—
Other accounts and notes receivable	114		—		6
Total cash, cash equivalents, and restricted cash	$	1,519	$	112	$	70



	Southern Company		Southern Power		Southern Company Gas
	(in millions)
At December 31, 2017
Cash and cash equivalents	$	2,130	$	129	$	73
Restricted cash:
Other accounts and notes receivable	5		—		5
Deferred charges and other assets	12		11		—
Total cash, cash equivalents, and restricted cash	$	2,147	$	140	$	78

Reconciliation of restricted cash and cash equivalents



	Southern Company		Georgia Power		Southern Company Gas
	(in millions)
At December 31, 2018
Cash and cash equivalents	$	1,396	$	4	$	64
Cash and cash equivalents classified as assets held for sale	9		—		—
Restricted cash:
Restricted cash	—		108		—
Other accounts and notes receivable	114		—		6
Total cash, cash equivalents, and restricted cash	$	1,519	$	112	$	70



	Southern Company		Southern Power		Southern Company Gas
	(in millions)
At December 31, 2017
Cash and cash equivalents	$	2,130	$	129	$	73
Restricted cash:
Other accounts and notes receivable	5		—		5
Deferred charges and other assets	12		11		—
Total cash, cash equivalents, and restricted cash	$	2,147	$	140	$	78

Schedule of storm damage reserves

In accordance with their respective state PSC orders, the traditional electric operating companies accrued the following amounts related to storm damage reserves in 2018, 2017, and 2016:



	Southern Company^(*)		Alabama Power		Georgia Power		Mississippi Power
	(in millions)
2018	$	74	$	16	$	30	$	1
2017	41		4		30		3
2016	40		3		30		4


(*)	Includes accruals at Gulf Power of $26.9 million in 2018 and $3.5 million in each of 2017 and 2016. See Note 15 under "Southern Company's Sale of Gulf Power" for information regarding the sale of Gulf Power.

Schedule of net investment in domestic and international leveraged leases

Southern Company's net investment in domestic and international leveraged leases consists of the following at December 31:



	2018			2017
	(in millions)
Net rentals receivable	$	1,563		$	1,498
Unearned income	(765		)	(723		)
Investment in leveraged leases	798			775
Deferred taxes from leveraged leases	(255		)	(252		)
Net investment in leveraged leases	$	543		$	523

Summary of the components of income from leveraged leases

A summary of the components of income from the leveraged leases follows:



	2018			2017			2016
	(in millions)
Pretax leveraged lease income	$	25		$	25		$	25
Net impact of Tax Reform Legislation	—			48			—
Income tax expense	(6		)	(9		)	(9		)
Net leveraged lease income	$	19		$	64		$	16

Schedule of AOCI (loss) balances, net of tax effects

AOCI (loss) balances, net of tax effects, for Southern Company, Southern Power, and Southern Company Gas were as follows:



	Qualifying Hedges			Pension and Other Postretirement Benefit Plans			Accumulated Other Comprehensive Income (Loss)
	(in millions)
Southern Company
Balance at December 31, 2017	$	(119	)	$	(70	)	$	(189	)
Adjustment to beginning balance^(*)	(26		)	(14		)	(40		)
Current period change	24			2			26
Balance at December 31, 2018	$	(121	)	$	(82	)	$	(203	)

Southern Power
Balance at December 31, 2017	$	25		$	(27	)	$	(2	)
Adjustment to beginning balance^(*)	4			—			4
Current period change	7			7			14
Balance at December 31, 2018	$	36		$	(20	)	$	16

Southern Company Gas
Balance at December 31, 2017	$	(6	)	$	26		$	20
Adjustment to beginning balance^(*)	(1		)	5			4
Current period change	4			(2		)	2
Balance at December 31, 2018	$	(3	)	$	29		$	26


(*)	Reflects the reclassification related to stranded tax effects resulting from the Tax Reform Legislation as allowed by ASU 2018-02. See "Recently Adopted Accounting Standards – Other" herein for additional information.