| REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME |
REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME Revenue from Contracts with Customers The Registrants generate revenues from a variety of sources, some of which are not accounted for as revenue from contracts with customers, such as leases, derivatives, and certain cost recovery mechanisms. See Note 1 to the financial statements under "Revenues" in Item 8 of the Form 10-K for additional information on the revenue policies of the Registrants. See "Lease Income" herein and Note (J) for additional information on revenue accounted for under lease and derivative accounting guidance, respectively. The following table disaggregates revenue from contracts with customers for the three and six months ended June 30, 2020 and 2019: | | | | | | | | | | | | | | | | | | | | | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | | (in millions) | Three Months Ended June 30, 2020 | | | | | | | Operating revenues | | | | | | | Retail electric revenues | | | | | | | Residential | $ | 1,430 |
| $ | 549 |
| $ | 817 |
| $ | 64 |
| $ | — |
| $ | — |
| Commercial | 1,103 |
| 353 |
| 689 |
| 61 |
| — |
| — |
| Industrial | 642 |
| 302 |
| 273 |
| 67 |
| — |
| — |
| Other | 23 |
| 6 |
| 15 |
| 2 |
| — |
| — |
| Total retail electric revenues | 3,198 |
| 1,210 |
| 1,794 |
| 194 |
| — |
| — |
| Natural gas distribution revenues | | | | | | | Residential | 239 |
| — |
| — |
| — |
| — |
| 239 |
| Commercial | 58 |
| — |
| — |
| — |
| — |
| 58 |
| Transportation | 234 |
| — |
| — |
| — |
| — |
| 234 |
| Industrial | 5 |
| — |
| — |
| — |
| — |
| 5 |
| Other | 49 |
| — |
| — |
| — |
| — |
| 49 |
| Total natural gas distribution revenues | 585 |
| — |
| — |
| — |
| — |
| 585 |
| Wholesale electric revenues | | | | | | | PPA energy revenues | 167 |
| 28 |
| 7 |
| 2 |
| 134 |
| — |
| PPA capacity revenues | 108 |
| 25 |
| 13 |
| 1 |
| 71 |
| — |
| Non-PPA revenues | 50 |
| 5 |
| 2 |
| 73 |
| 59 |
| — |
| Total wholesale electric revenues | 325 |
| 58 |
| 22 |
| 76 |
| 264 |
| — |
| Other natural gas revenues | | | | | | | Wholesale gas services | 341 |
| — |
| — |
| — |
| — |
| 341 |
| Gas marketing services | 57 |
| — |
| — |
| — |
| — |
| 57 |
| Other natural gas revenues | 8 |
| — |
| — |
| — |
| — |
| 8 |
| Total natural gas revenues | 406 |
| — |
| — |
| — |
| — |
| 406 |
| Other revenues | 251 |
| 44 |
| 119 |
| 6 |
| 4 |
| — |
| Total revenue from contracts with customers | 4,765 |
| 1,312 |
| 1,935 |
| 276 |
| 268 |
| 991 |
| Other revenue sources(a) | 728 |
| 53 |
| (7 | ) | 7 |
| 171 |
| 518 |
| Other adjustments(b) | (873 | ) | — |
| — |
| — |
| — |
| (873 | ) | Total operating revenues | $ | 4,620 |
| $ | 1,365 |
| $ | 1,928 |
| $ | 283 |
| $ | 439 |
| $ | 636 |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | | (in millions) | Six Months Ended June 30, 2020 | | | | | | | Operating revenues | | | | | | | Retail electric revenues | | | | | | | Residential | $ | 2,801 |
| $ | 1,103 |
| $ | 1,577 |
| $ | 121 |
| $ | — |
| $ | — |
| Commercial | 2,247 |
| 717 |
| 1,409 |
| 121 |
| — |
| — |
| Industrial | 1,323 |
| 623 |
| 555 |
| 145 |
| — |
| — |
| Other | 46 |
| 11 |
| 31 |
| 4 |
| — |
| — |
| Total retail electric revenues | 6,417 |
| 2,454 |
| 3,572 |
| 391 |
| — |
| — |
| Natural gas distribution revenues | | | | | | | Residential | 736 |
| — |
| — |
| — |
| — |
| 736 |
| Commercial | 188 |
| — |
| — |
| — |
| — |
| 188 |
| Transportation | 499 |
| — |
| — |
| — |
| — |
| 499 |
| Industrial | 17 |
| — |
| — |
| — |
| — |
| 17 |
| Other | 144 |
| — |
| — |
| — |
| — |
| 144 |
| Total natural gas distribution revenues | 1,584 |
| — |
| — |
| — |
| — |
| 1,584 |
| Wholesale electric revenues | | | | | | | PPA energy revenues | 326 |
| 55 |
| 15 |
| 4 |
| 259 |
| — |
| PPA capacity revenues | 213 |
| 52 |
| 25 |
| 2 |
| 136 |
| — |
| Non-PPA revenues | 100 |
| 24 |
| 4 |
| 142 |
| 117 |
| — |
| Total wholesale electric revenues | 639 |
| 131 |
| 44 |
| 148 |
| 512 |
| — |
| Other natural gas revenues | | | | | | | Wholesale gas services | 737 |
| — |
| — |
| — |
| — |
| 737 |
| Gas marketing services | 220 |
| — |
| — |
| — |
| — |
| 220 |
| Other natural gas revenues | 15 |
| — |
| — |
| — |
| — |
| 15 |
| Total natural gas revenues | 972 |
| — |
| — |
| — |
| — |
| 972 |
| Other revenues | 441 |
| 78 |
| 214 |
| 13 |
| 7 |
| — |
| Total revenue from contracts with customers | 10,053 |
| 2,663 |
| 3,830 |
| 552 |
| 519 |
| 2,556 |
| Other revenue sources(a) | 1,599 |
| 53 |
| (76 | ) | 7 |
| 295 |
| 1,343 |
| Other adjustments(b) | (2,014 | ) | — |
| — |
| — |
| — |
| (2,014 | ) | Total operating revenues | $ | 9,638 |
| $ | 2,716 |
| $ | 3,754 |
| $ | 559 |
| $ | 814 |
| $ | 1,885 |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | | (in millions) | Three Months Ended June 30, 2019 | | | | | | | Operating revenues | | | | | | | Retail electric revenues | | | | | | | Residential | $ | 1,491 |
| $ | 592 |
| $ | 831 |
| $ | 68 |
| $ | — |
| $ | — |
| Commercial | 1,264 |
| 422 |
| 770 |
| 72 |
| — |
| — |
| Industrial | 766 |
| 369 |
| 327 |
| 70 |
| — |
| — |
| Other | 25 |
| 7 |
| 15 |
| 3 |
| — |
| — |
| Total retail electric revenues | 3,546 |
| 1,390 |
| 1,943 |
| 213 |
| — |
| — |
| Natural gas distribution revenues | | | | | | | Residential | 229 |
| — |
| — |
| — |
| — |
| 229 |
| Commercial | 65 |
| — |
| — |
| — |
| — |
| 65 |
| Transportation | 213 |
| — |
| — |
| — |
| — |
| 213 |
| Industrial | 5 |
| — |
| — |
| — |
| — |
| 5 |
| Other | 45 |
| — |
| — |
| — |
| — |
| 45 |
| Total natural gas distribution revenues | 557 |
| — |
| — |
| — |
| — |
| 557 |
| Wholesale electric revenues | | | | | | | PPA energy revenues | 208 |
| 35 |
| 17 |
| 3 |
| 163 |
| — |
| PPA capacity revenues | 109 |
| 25 |
| 13 |
| 1 |
| 81 |
| — |
| Non-PPA revenues | 53 |
| 3 |
| 1 |
| 89 |
| 68 |
| — |
| Total wholesale electric revenues | 370 |
| 63 |
| 31 |
| 93 |
| 312 |
| — |
| Other natural gas revenues | | | | | | | Wholesale gas services | 444 |
| — |
| — |
| — |
| — |
| 444 |
| Gas marketing services | 55 |
| — |
| — |
| — |
| — |
| 55 |
| Other natural gas revenues | 12 |
| — |
| — |
| — |
| — |
| 12 |
| Total natural gas revenues | 511 |
| — |
| — |
| — |
| — |
| 511 |
| Other revenues | 238 |
| 37 |
| 95 |
| 4 |
| 3 |
| — |
| Total revenue from contracts with customers | 5,222 |
| 1,490 |
| 2,069 |
| 310 |
| 315 |
| 1,068 |
| Other revenue sources(a) | 1,050 |
| 23 |
| 48 |
| 3 |
| 195 |
| 795 |
| Other adjustments(b) | (1,174 | ) | — |
| — |
| — |
| — |
| (1,174 | ) | Total operating revenues | $ | 5,098 |
| $ | 1,513 |
| $ | 2,117 |
| $ | 313 |
| $ | 510 |
| $ | 689 |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | | (in millions) | Six Months Ended June 30, 2019 | | | | | | | Operating revenues | | | | | | | Retail electric revenues | | | | | | | Residential | $ | 2,818 |
| $ | 1,151 |
| $ | 1,539 |
| $ | 128 |
| $ | — |
| $ | — |
| Commercial | 2,390 |
| 790 |
| 1,463 |
| 137 |
| — |
| — |
| Industrial | 1,474 |
| 707 |
| 623 |
| 144 |
| — |
| — |
| Other | 44 |
| 13 |
| 25 |
| 6 |
| — |
| — |
| Total retail electric revenues | 6,726 |
| 2,661 |
| 3,650 |
| 415 |
| — |
| — |
| Natural gas distribution revenues | | | | | | | Residential | 830 |
| — |
| — |
| — |
| — |
| 830 |
| Commercial | 235 |
| — |
| — |
| — |
| — |
| 235 |
| Transportation | 469 |
| — |
| — |
| — |
| — |
| 469 |
| Industrial | 22 |
| — |
| — |
| — |
| — |
| 22 |
| Other | 161 |
| — |
| — |
| — |
| — |
| 161 |
| Total natural gas distribution revenues | 1,717 |
| — |
| — |
| — |
| — |
| 1,717 |
| | | | | | | | Wholesale electric revenues | | | | | | | PPA energy revenues | 398 |
| 67 |
| 28 |
| 5 |
| 314 |
| — |
| PPA capacity revenues | 217 |
| 52 |
| 27 |
| 2 |
| 163 |
| — |
| Non-PPA revenues | 108 |
| 62 |
| 3 |
| 164 |
| 109 |
| — |
| Total wholesale electric revenues | 723 |
| 181 |
| 58 |
| 171 |
| 586 |
| — |
| Other natural gas revenues | | | | | | | Wholesale gas services | 1,165 |
| — |
| — |
| — |
| — |
| 1,165 |
| Gas marketing services | 276 |
| — |
| — |
| — |
| — |
| 276 |
| Other natural gas revenues | 22 |
| — |
| — |
| — |
| — |
| 22 |
| Total natural gas revenues | 1,463 |
| — |
| — |
| — |
| — |
| 1,463 |
| Other revenues | 502 |
| 83 |
| 186 |
| 10 |
| 6 |
| — |
| Total revenue from contracts with customers | 11,131 |
| 2,925 |
| 3,894 |
| 596 |
| 592 |
| 3,180 |
| Other revenue sources(a) | 2,413 |
| (4 | ) | 57 |
| 4 |
| 361 |
| 2,017 |
| Other adjustments(b) | (3,034 | ) | — |
| — |
| — |
| — |
| (3,034 | ) | Total operating revenues | $ | 10,510 |
| $ | 2,921 |
| $ | 3,951 |
| $ | 600 |
| $ | 953 |
| $ | 2,163 |
|
| | (a) | Other revenue sources primarily relate to revenues from customers accounted for as derivatives and leases, as well as alternative revenue programs at Southern Company Gas and other cost recovery mechanisms at the traditional electric operating companies. |
(b) Other adjustments relate to the cost of Southern Company Gas' energy and risk management activities. Wholesale gas services revenues are presented net of the related costs of those activities on the statement of income. See Note (L) under "Southern Company Gas" for additional information on the components of wholesale gas services' operating revenues. Contract Balances The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at June 30, 2020 and December 31, 2019: | | | | | | | | | | | | | | | | | | | | | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | | (in millions) | Accounts Receivables | | | | | | | As of June 30, 2020 | $ | 2,283 |
| $ | 592 |
| $ | 796 |
| $ | 84 |
| $ | 115 |
| $ | 523 |
| As of December 31, 2019 | 2,413 |
| 586 |
| 688 |
| 79 |
| 97 |
| 749 |
| Contract Assets | | | | | | | As of June 30, 2020 | $ | 103 |
| $ | — |
| $ | 54 |
| $ | 1 |
| $ | — |
| $ | — |
| As of December 31, 2019 | 117 |
| — |
| 69 |
| — |
| — |
| — |
| Contract Liabilities | | | | | | | As of June 30, 2020 | $ | 57 |
| $ | 6 |
| $ | 23 |
| $ | — |
| $ | 1 |
| $ | 2 |
| As of December 31, 2019 | 52 |
| 10 |
| 13 |
| — |
| 1 |
| 1 |
|
As of June 30, 2020 and December 31, 2019, Georgia Power had contract assets primarily related to unregulated service agreements, where payment is contingent on project completion, and fixed retail customer bill programs, where the payment is contingent upon Georgia Power's continued performance and the customer's continued participation in the program over a one-year contract term. Contract liabilities for Georgia Power relate to cash collections recognized in advance of revenue for certain unregulated service agreements. Alabama Power had contract liabilities for outstanding performance obligations primarily related to extended service agreements. Southern Company's unregulated distributed generation business had $41 million and $40 million of contract assets and $26 million and $28 million of contract liabilities at June 30, 2020 and December 31, 2019, respectively, for outstanding performance obligations. Revenues recognized by Southern Company in the three and six months ended June 30, 2020, which were included in contract liabilities at December 31, 2019, were $11 million and $21 million, respectively, and immaterial for all other applicable Registrants. Remaining Performance Obligations The traditional electric operating companies and Southern Power have long-term contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. These contracts primarily relate to PPAs whereby the traditional electric operating companies and Southern Power provide electricity and generation capacity to a customer. The revenue recognized for the delivery of electricity is variable; however, certain PPAs include a fixed payment for fixed generation capacity over the term of the contract. Southern Company's unregulated distributed generation business also has partially satisfied performance obligations related to certain fixed price contracts. Revenue from contracts with customers related to these performance obligations remaining at June 30, 2020 are expected to be recognized as follows: | | | | | | | | | | | | | | | | | | | | | 2020 (remaining) | 2021 | 2022 | 2023 | 2024 | 2025 and Thereafter | | (in millions) | Southern Company | $ | 319 |
| $ | 432 |
| $ | 362 |
| $ | 339 |
| $ | 319 |
| $ | 3,062 |
| Alabama Power | 12 |
| 33 |
| 31 |
| 24 |
| 7 |
| 5 |
| Georgia Power | 37 |
| 70 |
| 39 |
| 34 |
| 23 |
| 62 |
| Southern Power | 156 |
| 290 |
| 292 |
| 282 |
| 290 |
| 3,013 |
|
Revenue expected to be recognized for performance obligations remaining at June 30, 2020 was immaterial for Mississippi Power. Lease Income Lease income for the three and six months ended June 30, 2020 and 2019 is as follows: | | | | | | | | | | | | | | | | | | | | | Southern Company | Alabama Power | Georgia Power | Mississippi Power | Southern Power | Southern Company Gas | | (in millions) | For the Three Months Ended June 30, 2020 | | | | | | | Lease income - interest income on sales-type leases | $ | 3 |
| $ | — |
| $ | — |
| $ | 3 |
| $ | — |
| $ | — |
| Lease income - operating leases | 47 |
| 6 |
| 15 |
| — |
| 21 |
| 9 |
| Variable lease income | 126 |
| — |
| — |
| — |
| 136 |
| — |
| Total lease income | $ | 176 |
| $ | 6 |
| $ | 15 |
| $ | 3 |
| $ | 157 |
| $ | 9 |
| | | | | | | | For the Six Months Ended June 30, 2020 | | | | | | | Lease income - interest income on sales-type leases | $ | 6 |
| $ | — |
| $ | — |
| $ | 5 |
| $ | — |
| $ | — |
| Lease income - operating leases | 97 |
| 13 |
| 30 |
| — |
| 45 |
| 17 |
| Variable lease income | 200 |
| — |
| — |
| — |
| 215 |
| — |
| Total lease income | $ | 303 |
| $ | 13 |
| $ | 30 |
| $ | 5 |
| $ | 260 |
| $ | 17 |
| | | | | | | | For the Three Months Ended June 30, 2019 | | | | | | | Lease income - interest income on sales-type leases | $ | 2 |
| $ | — |
| $ | — |
| $ | 2 |
| $ | — |
| $ | — |
| Lease income - operating leases | 67 |
| 7 |
| 19 |
| — |
| 44 |
| 9 |
| Variable lease income | 115 |
| — |
| — |
| — |
| 129 |
| — |
| Total lease income | $ | 184 |
| $ | 7 |
| $ | 19 |
| $ | 2 |
| $ | 173 |
| $ | 9 |
| | | | | | | | For the Six Months Ended June 30, 2019 | | | | | | | Lease income - interest income on sales-type leases | $ | 5 |
| $ | — |
| $ | — |
| $ | 5 |
| $ | — |
| $ | — |
| Lease income - operating leases | 139 |
| 13 |
| 39 |
| — |
| 90 |
| 17 |
| Variable lease income | 182 |
| — |
| — |
| — |
| 204 |
| — |
| Total lease income | $ | 326 |
| $ | 13 |
| $ | 39 |
| $ | 5 |
| $ | 294 |
| $ | 17 |
|
Lease income for Southern Power is included in wholesale revenues. Lease payments received under tolling arrangements and PPAs consist of either scheduled payments or variable payments based on the amount of energy produced by the underlying electric generating units.
|