v3.20.2
SEGMENT AND RELATED INFORMATION
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
SEGMENT AND RELATED INFORMATION SEGMENT AND RELATED INFORMATION
Southern Company
The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are vertically integrated utilities providing electric service in three Southeastern states. Southern Power develops, constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through its natural gas distribution utilities and is involved in several other complementary businesses including gas pipeline investments, wholesale gas services, and gas marketing services.
Southern Company's reportable business segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural
gas and other complementary products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $92 million and $178 million for the three and six months ended June 30, 2020, respectively, and $117 million and $204 million for the three and six months ended June 30, 2019, respectively. Revenues from sales of natural gas from Southern Company Gas to the traditional electric operating companies were immaterial for all periods presented. Revenues from sales of natural gas from Southern Company Gas to Southern Power were $3 million and $13 million for the three and six months ended June 30, 2020, respectively, and $16 million and $33 million for the three and six months ended June 30, 2019, respectively. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include providing energy solutions to electric utilities and their customers in the areas of distributed generation, energy storage and renewables, and energy efficiency, as well as investments in telecommunications and leveraged lease projects. All other inter-segment revenues are not material.
Financial data for business segments and products and services for the three and six months ended June 30, 2020 and 2019 was as follows:
 
Electric Utilities
 
 
 
 
 
Traditional
Electric Operating
Companies
Southern
Power
Eliminations
Total
Southern Company Gas
All
Other
Eliminations
Consolidated
 
(in millions)
Three Months Ended June 30, 2020
 
 
 
 
 
 
 
Operating revenues
$
3,539

$
439

$
(94
)
$
3,884

$
636

$
135

$
(35
)
$
4,620

Segment net income (loss)(a)(b)(c)
645

63

—

708

71

(177
)
10

612

Six Months Ended June 30, 2020
 
 
 


 
 
 
Operating revenues
$
6,946

$
814

$
(181
)
$
7,579

$
1,885

$
248

$
(74
)
$
9,638

Segment net income (loss)(a)(b)(c)(d)
1,287

138

—

1,425

346

(299
)
8

1,480

At June 30, 2020
 
 
 
 
 
 
 
 
Goodwill
$
—

$
2

$
—

$
2

$
5,015

$
263

$
—

$
5,280

Total assets
83,158

13,557

(713
)
96,002

21,500

3,325

(1,096
)
119,731

Three Months Ended June 30, 2019
 
 
 
 
 
 
 
Operating revenues
$
3,899

$
510

$
(119
)
$
4,290

$
689

$
186

$
(67
)
$
5,098

Segment net income (loss)(a)(e)(f)
782

174

—

956

106

(154
)
(9
)
899

Six Months Ended June 30, 2019
 
 
 
 
 
 
 
Operating revenues
$
7,343

$
953

$
(211
)
$
8,085

$
2,163

$
368

$
(106
)
$
10,510

Segment net income (loss)(a)(e)(f)
1,346

230

—

1,576

376

1,041

(11
)
2,982

At December 31, 2019
 
 
 
 
 
 
 
 
Goodwill
$
—

$
2

$
—

$
2

$
5,015

$
263

$
—

$
5,280

Total assets
81,063

14,300

(713
)
94,650

21,687

3,511

(1,148
)
118,700

(a)
Attributable to Southern Company.
(b)
Segment net income (loss) for the traditional electric operating companies includes a pre-tax charge of $149 million ($111 million after tax) related to Plant Vogtle Units 3 and 4 for the three and six months ended June 30, 2020. See Note (B) under "Georgia Power – Nuclear Construction" for additional information.
(c)
Segment net income (loss) for the "All Other" column includes a pre-tax impairment charge of $154 million ($74 million after tax) related to a leveraged lease investment for the three and six months ended June 30, 2020. See Note (C) under "Other Matters – Southern Company" for additional information.
(d)
Segment net income (loss) for Southern Power includes a $39 million pre-tax gain ($23 million gain after tax) on the sale of Plant Mankato for the six months ended June 30, 2020. See Note (K) under "Southern Power" for additional information.
(e)
Segment net income (loss) for the "All Other" column includes the preliminary pre-tax gain associated with the sale of Gulf Power of $2.5 billion ($1.3 billion after tax) for the six months ended June 30, 2019, of which $(15) million ($(11) million after tax) was recorded in the three months ended June 30, 2019, as well as a goodwill impairment charge of $32 million for the three and six months ended June 30, 2019 in contemplation of the sale of one of PowerSecure's business units. See Note 15 to the financial statements in Item 8 of the Form 10-K under "Southern Company" for additional information.
(f)
Segment net income (loss) for Southern Power includes a $23 million pre-tax gain ($88 million gain after tax) on the sale of Plant Nacogdoches for the three and six months ended June 30, 2019. See Note 15 to the financial statements in Item 8 of the Form 10-K under "Southern Power – Sale of Natural Gas and Biomass Plants" for additional information.
Products and Services
 
Electric Utilities' Revenues
 
Retail
Wholesale
Other
Total
 
(in millions)
Three Months Ended June 30, 2020
$
3,182

$
472

$
230

$
3,884

Three Months Ended June 30, 2019
3,540

542

208

4,290

Six Months Ended June 30, 2020
$
6,260

$
889

$
430

$
7,579

Six Months Ended June 30, 2019
6,623

1,041

421

8,085

 
Southern Company Gas' Revenues
 
Gas
Distribution
Operations
Wholesale
Gas
Services(*)
Gas
Marketing
Services
Other
Total
 
(in millions)
Three Months Ended June 30, 2020
$
583

$
(19
)
$
56

$
16

$
636

Three Months Ended June 30, 2019
563

48

58

20

689

Six Months Ended June 30, 2020
$
1,596

$
32

$
233

$
24

$
1,885

Six Months Ended June 30, 2019
1,724

134

287

18

2,163

(*)
The revenues for wholesale gas services are netted with costs associated with its energy and risk management activities. See "Southern Company Gas" herein for additional information.
Southern Company Gas
Southern Company Gas manages its business through four reportable segments – gas distribution operations, gas pipeline investments, wholesale gas services, and gas marketing services. The non-reportable segments are combined and presented as all other.
Gas distribution operations is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities in four states.
Gas pipeline investments consists of joint ventures in natural gas pipeline investments including a 50% interest in SNG, a 20% ownership interest in the PennEast Pipeline construction project, a 50% joint ownership interest in the Dalton Pipeline, and a 5% ownership interest in the Atlantic Coast Pipeline construction project through its sale on March 24, 2020. These natural gas pipelines enable the provision of diverse sources of natural gas supplies to the customers of Southern Company Gas.
Wholesale gas services provides natural gas asset management and/or related logistics services for each of Southern Company Gas' utilities except Nicor Gas as well as for non-affiliated companies. Additionally, wholesale gas services engages in natural gas storage and gas pipeline arbitrage and related activities.
Gas marketing services provides natural gas marketing to end-use customers primarily in Georgia and Illinois through SouthStar.
The all other column includes segments below the quantitative threshold for separate disclosure, including natural gas storage businesses, fuels operations through the sale of Southern Company Gas' interest in Pivotal LNG on March 24, 2020, the investment in Triton through its sale on May 29, 2019, and other subsidiaries that fall below the quantitative threshold for separate disclosure. See Notes (E) and (K) under "Southern Company Gas" for additional information.
Business segment financial data for the three and six months ended June 30, 2020 and 2019 was as follows:
 
Gas Distribution Operations
Gas Pipeline Investments
Wholesale Gas Services(*)
Gas Marketing Services
Total
All Other
Eliminations
Consolidated
 
(in millions)
Three Months Ended June 30, 2020
 
 
 
 
 
 
Operating revenues
$
587

$
8

$
(19
)
$
56

$
632

$
8

$
(4
)
$
636

Segment net income (loss)
74

21

(23
)
5

77

(6
)
—

71

Six Months Ended June 30, 2020
 
 
 
 
 
 
Operating revenues
$
1,607

$
16

$
32

$
233

$
1,888

$
16

$
(19
)
$
1,885

Segment net income (loss)
238

51

—

62

351

(5
)
—

346

Total assets at June 30, 2020
18,276

1,617

637

1,480

22,010

10,645

(11,155
)
21,500

Three Months Ended June 30, 2019
 
 
 
 
 
 
Operating revenues
$
568

$
8

$
48

$
58

$
682

$
13

$
(6
)
$
689

Segment net income (loss)
58

25

23

(3
)
103

3

—

106

Six Months Ended June 30, 2019
 
 
 
 
 
 
 
Operating revenues
$
1,740

$
16

$
134

$
287

$
2,177

$
24

$
(38
)
$
2,163

Segment net income (loss)
191

57

70

58

376

—

—

376

Total assets at December 31, 2019
18,204

1,678

850

1,496

22,228

10,759

(11,300
)
21,687

(*)
The revenues for wholesale gas services are netted with costs associated with its energy and risk management activities. A reconciliation of operating revenues and intercompany revenues is shown in the following table.
 
Third Party Gross Revenues
Intercompany Revenues
Total Gross Revenues
Less Gross Gas Costs
Operating Revenues
 
(in millions)
Three Months Ended June 30, 2020
$
854

$
18

$
872

$
891

$
(19
)
Three Months Ended June 30, 2019
1,223

63

1,286

1,238

48

Six Months Ended June 30, 2020
$
2,039

$
47

$
2,086

$
2,054

$
32

Six Months Ended June 30, 2019
3,148

151

3,299

3,165

134