Southern Company(US:SO)2024-02-15 19:32Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $3.65 for 2023, which was at the top of the guidance range [195] - The projected long-term adjusted EPS growth rate is estimated at 5% to 7% [180] - The capital investment forecast totals $48 billion, reflecting a $5 billion increase compared to the previous year, indicating a 12% increase in capital spending [181] Business Line Data and Key Metrics Changes - Weather-adjusted retail electric sales decreased by 0.4% in 2023 compared to 2022, with commercial sales growing by 1.3% and industrial sales down nearly 2% [178][179] - The company added over 46,000 residential electric customers and nearly 27,000 residential gas customers in 2023, marking the highest four-year total in decades [197] Market Data and Key Metrics Changes - Electricity sales growth is projected to remain around 1% to 2% for 2024 and 2025, with an acceleration to approximately 6% annually from 2025 to 2028 [198] - Georgia Power's total retail electric sales growth is projected to be approximately 9% annually over the same period [198] Company Strategy and Development Direction - The company aims to maintain strong investment-grade credit ratings and believes that high-quality credit is essential for being a high-quality equity investment [182] - The focus remains on increasing the resiliency of electric and gas networks and technology infrastructure through disciplined capital forecasting [181] Management's Comments on Operating Environment and Future Outlook - Management highlighted the significant inflation and higher interest rates as headwinds, translating to hundreds of millions of dollars in higher interest expenses for 2024 compared to previous assumptions [199] - The completion of Vogtle Unit 4 is projected for April 2024, which is expected to improve the company's financial profile and reduce major project construction risk [175][182] Other Important Information - The company achieved a 49% reduction in greenhouse gas emissions in 2023, moving towards its interim goal of a 50% reduction by 2030 [192] - The company was recognized as the number one most admired electric and gas utility in Fortune magazine's World's Most Admired Companies list for 2024 [192] Q&A Session Summary Question: What drove the assumptions around the capital plan? - The capital plan includes new combustion turbines and specific storage projects, reflecting the company's ongoing resource needs [20] Question: When do you expect to achieve a 17% FFO to debt ratio? - The company anticipates reaching this target by 2025, with incremental capital deployment improving cash flow over time [12] Question: How does load growth impact earnings growth? - Management indicated that while load growth is strong, interest expense is a significant headwind affecting earnings growth [90] Question: Will the dividend growth trajectory change? - The company expects dividend growth to remain below earnings growth for the next few years, maintaining a consistent increase of $0.08 per share [121] Question: How does the company plan to manage operating costs with demand growth? - There is a relationship between demand growth and operating costs, but the company is focused on efficiency and cost management to mitigate increases [122]