Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of June 30, 2019, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:



	Fair Value Measurements Using:
As of June 30, 2019:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Southern Company
Assets:
Energy-related derivatives^(a)	$	270	$	177	$	12	$	—	$	459
Foreign currency derivatives	—		60		—		—		60
Investments in trusts:^(b)(c)
Domestic equity	703		124		—		—		827
Foreign equity	62		206		—		—		268
U.S. Treasury and government agency securities	—		307		—		—		307
Municipal bonds	—		72		—		—		72
Pooled funds – fixed income	—		16		—		—		16
Corporate bonds	23		299		—		—		322
Mortgage and asset backed securities	—		74		—		—		74
Private equity	—		—		—		54		54
Cash and cash equivalents	1		—		—		—		1
Other	27		2		—		—		29
Cash equivalents	841		5		—		—		846
Other investments	9		17		—		—		26
Total	$	1,936	$	1,359	$	12	$	54	$	3,361
Liabilities:
Energy-related derivatives^(a)	$	405	$	189	$	22	$	—	$	616
Interest rate derivatives	—		52		—		—		52
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		21		—		21
Total	$	405	$	264	$	43	$	—	$	712



	Fair Value Measurements Using:
As of June 30, 2019:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Alabama Power
Assets:
Energy-related derivatives	$	—	$	6	$	—	$	—	$	6
Nuclear decommissioning trusts:^(b)
Domestic equity	456		113		—		—		569
Foreign equity	62		60		—		—		122
U.S. Treasury and government agency securities	—		21		—		—		21
Municipal bonds	—		1		—		—		1
Corporate bonds	23		141		—		—		164
Mortgage and asset backed securities	—		25		—		—		25
Private equity	—		—		—		54		54
Other	7		—		—		—		7
Cash equivalents	430		5		—		—		435
Other investments	—		17		—		—		17
Total	$	978	$	389	$	—	$	54	$	1,421
Liabilities:
Energy-related derivatives	$	—	$	18	$	—	$	—	$	18

Georgia Power
Assets:
Energy-related derivatives	$	—	$	6	$	—	$	—	$	6
Nuclear decommissioning trusts:^(b)(c)
Domestic equity	247		1		—		—		248
Foreign equity	—		143		—		—		143
U.S. Treasury and government agency securities	—		286		—		—		286
Municipal bonds	—		71		—		—		71
Corporate bonds	—		158		—		—		158
Mortgage and asset backed securities	—		50		—		—		50
Other	20		2		—		—		22
Total	$	267	$	717	$	—	$	—	$	984
Liabilities:
Energy-related derivatives	$	—	$	43	$	—	$	—	$	43
Interest rate derivatives	—		37		—		—		37
Total	$	—	$	80	$	—	$	—	$	80



	Fair Value Measurements Using:
As of June 30, 2019:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Mississippi Power
Assets:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3
Cash equivalents	170		—		—		—		170
Total	$	170	$	3	$	—	$	—	$	173
Liabilities:
Energy-related derivatives	$	—	$	19	$	—	$	—	$	19

Southern Power
Assets:
Energy-related derivatives	$	—	$	2	$	—	$	—	$	2
Foreign currency derivatives	—		60		—		—		60
Cash equivalents	177		—		—		—		177
Total	$	177	$	62	$	—	$	—	$	239
Liabilities:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		21		—		21
Total	$	—	$	27	$	21	$	—	$	48

Southern Company Gas
Assets:
Energy-related derivatives^(a)	$	270	$	160	$	12	$	—	$	442
Non-qualified deferred compensation trusts:
Domestic equity	—		10		—		—		10
Foreign equity	—		4		—		—		4
Pooled funds – fixed income	—		16		—		—		16
Cash equivalents	1		—		—		—		1
Total	$	271	$	190	$	12	$	—	$	473
Liabilities:
Energy-related derivatives^(a)	$	405	$	105	$	22	$	—	$	532


(a)	Energy-related derivatives exclude cash collateral of $178 million.


(b)	Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

(c)

Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. As of June 30, 2019, approximately $30 million of the fair market value of Georgia Power's nuclear decommissioning trust funds' securities were on loan to creditors under the funds' managers' securities lending program. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

Schedule of Increase (Decrease) In Fair Value Of Funds

The fair value of the funds, including reinvested interest

and dividends and excluding the funds' expenses, increased (decreased) by the amounts shown in the table below for the three and six months ended June 30, 2019 and 2018. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.



	Three Months Ended June 30, 2019		Three Months Ended June 30, 2018			Six Months Ended June 30, 2019		Six Months Ended June 30, 2018
	(in millions)
Southern Company	$	75	$	14		$	227	$	4
Alabama Power	38		15			125		10
Georgia Power	37		(1		)	102		(6		)

Financial Instruments for Which Carrying Amount Did Not Equal Fair Value

As of June 30, 2019, other financial instruments for which the carrying amount did not equal fair value were as follows:



	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas^(*)
	(in millions)
Long-term debt, including securities due within one year:
Carrying amount	$	42,596	$	7,922	$	10,969	$	1,618	$	5,011	$	5,916
Fair value	45,394		8,717		11,749		1,657		5,261		6,420

(*)

The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the 2016 merger with Southern Company. Southern Company Gas amortizes the fair value adjustments over the lives of the respective bonds.

Fair Value of Commodity Derivative Contracts that Include a Significant Unobservable Component

The following table includes transfers to Level 3, which represent the fair value of Southern Company Gas' commodity derivative contracts that include a significant unobservable component for the first time during the period.



	Three Months Ended June 30, 2019			Six Months Ended June 30, 2019
	(in millions)
Beginning balance	$	(19	)	$	—
Transfers to Level 3	(3		)	(33		)
Changes in fair value	12			23
Ending balance	$	(10	)	$	(10	)