SOUTHERN CO GAS

What Do They Do?

Provides electricity to retail and wholesale customers, sells wholesale power to utilities and other buyers, and distributes natural gas to households and businesses.

How Do They Make Money?

Electricity and gas customers pay for energy delivered during the month, typically in the following month. Wholesale buyers pay under contracts for electricity delivered or capacity available, also typically in the following month.

Year to Dec 2015 revenue by reportable segment revenue

Segment	Share	Revenue
Distribution Operations	77% Year to Dec 2012: 80%
Retail Operations	21% Year to Dec 2012: 21%
Wholesale Services	5.1% Year to Dec 2012: 2.5%
Midstream Operations	1.4% Year to Dec 2012: 2.2%
Other	0.3% Year to Dec 2012: 0.2%

Who Are Their Customers?

Electric utilities serve retail and wholesale customers, while Southern Power sells wholesale power under contracts to utilities, power producers, municipalities, cooperatives, and commercial and industrial buyers. Natural gas utilities serve residential, commercial, and industrial customers; Georgia gas marketers sell gas and handle billing for end users.

Do Revenues Turn Into Profits?

Yes. It kept 9 cents of every revenue dollar as net income in Year to Dec 2015 and turned 9 cents into free cash flow.

Operating income, Year to Dec 2015

19% of revenue

▼ −32% vs Year to Dec 2014 ($1.1B, 20%)

Net income, Year to Dec 2015

9% of revenue

▼ −27% vs Year to Dec 2014 ($482M, 9%)

Free cash flow, Year to Dec 2015

9% of revenue

▲ Now profitable vs Year to Dec 2014 (−$114M, −2%)

How Are They Changing?

Growing. Revenue grew 71% in 4 years, from $2.3B in Year to Dec 2011 to $3.9B in Year to Dec 2015, about 14% a year.

Revenue over time

Distribution Operations Retail Operations Wholesale Services Midstream Operations Other Intercompany Eliminations

$10B$5B$0

Year to Dec 2011 Year to Dec 2012 Year to Dec 2013 Year to Dec 2014 Year to Dec 2015

Comments