The following is a summary of the The Southern Company (SO) Q4 2024 Earnings Call Transcript:

Financial Performance:

• Southern Company reported adjusted earnings per share of $4.05 for 2024, representing an 11% increase from the previous year's adjusted earnings.

• Weather-normalized total retail electricity sales were up approximately 1% compared to 2023, with commercial sales, particularly from new and existing data centers, increasing by 17%.

• Added 57,000 new residential electric customers and 26,000 new customers in natural gas distribution businesses.

• Capital investment forecast over the next 5 years is $63 billion, 95% of which is allocated to state-regulated utilities, reflecting an increase from the previous year's forecast.

Business Progress:

• Economically robust regions under Southern Company's service led to over 150 companies announcing expansion or establishment, promising to support over 20,000 new jobs.

• Committed to large-scale economic development, with a pipeline representing over 50,000 megawatts of potential incremental load by the mid-2030s, particularly from data centers which are about 80% of this load.

• Southern Power continued to expand with 500 megawatts of solar under construction and exploring new opportunities in natural gas generation to support data centers outside the Southeast.

Opportunities:

• Southern Company sees substantial growth opportunities through its state-regulated utilities, with significant economic development activities leading to robust and predictable earnings growth.

• Emerging trends in data centers and large electric load customers in Alabama and Mississippi present new growth avenues, with recent contracts to serve over 1,000 megawatts for data centers in these states.

• Potential incremental regulated capital investments amounting to $10 billion to $15 billion for 2025 to 2029, driven by opportunities in generation and natural gas pipelines.

Risks:

• The need for increased capital investments might impose financial strain; however, Southern Company plans to manage equity needs prudently to maintain its investment-grade credit ratings.

• Ongoing high interest rates pose a challenge in refinancing debt at significantly higher rates compared to existing outstanding securities.

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