Q3 2011 Earnings Call
October 26, 2011 1:00 pm ET
Thomas A. Fanning - Chairman of the Board, Chief Executive Officer and President
Art P. Beattie - Chief Financial Officer and Executive Vice President
Glen A. Kundert - Head-Investor Relations and Vice President of Investor Relations
Michael J. Lapides - Goldman Sachs Group Inc., Research Division
Mark Barnett - Morningstar Inc., Research Division
Brian Chin - Citigroup Inc, Research Division
Dan Eggers - Crédit Suisse AG, Research Division
Jonathan P. Arnold - Deutsche Bank AG, Research Division
Ashar Khan - SAC Capital
Ali Agha - SunTrust Robinson Humphrey, Inc., Research Division
Andrew Levi - Caris & Company, Inc., Research Division
Carl Seligson - Utility Financial
Steven I. Fleishman - BofA Merrill Lynch, Research Division
John Cohen - Citi
James D. von Riesemann - UBS Investment Bank, Research Division
Previous Statements by SO
» Southern's CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Southern's CEO Discusses Q1 2011 Results - Earnings Call Transcript
» Southern's CEO Discusses Q4 2010 Results - Earnings Call Transcript
Good afternoon. My name is Kerry, and I will be your conference operator today. And at this time, I would like to welcome everyone to the Southern Company Third Quarter 2011 Earnings Call. [Operator Instructions] I would now like to turn the call over to Mr. Glen Kundert, Vice President of Investor Relations. Thank you. Please go ahead, sir.
Glen A. Kundert
Thank you, Kerry. And welcome to Southern Company's Third Quarter 2011 Earnings Call. Joining me this afternoon are Tom Fanning, Chairman, President and Chief Executive Officer of Southern Company; and Art Beattie, Chief Financial Officer. Let me remind you that we will make forward-looking statements today, in addition to providing historical information. There are various important factors that could cause actual results to differ materially from those indicated in the forward-looking statement, including those discussed in our Form 10-K and subsequent filings.
We'll also be including slides as part of today's conference call. These slides provide details on the information that will be discussed on this call. You can access the slides on our Investor Relations website at www.southerncompany.com, if you want to follow along during the presentation.
Now at this time, I'll turn the call over to Tom Fanning, Southern Company's Chairman, President and Chief Executive Officer.
Thomas A. Fanning
Good afternoon, and thank you for joining us. Before I get started with the normal text, I want to recognize Glen Kundert. This is his -- it's unbelievable -- 48th earnings call. And as most of you know, he will be retiring later this year. He is a wonderful friend and has contributed so much to our success. We just want to recognize that. And, Glen, most often in Southern Company when really important people retire, we made plans after them. I'm afraid you're going to get this call named after you. This would be the Glen A. Kundert Third Quarter 2011 Earnings Call. Sorry, we couldn't do better. We will, in fact, do more in the months ahead, but I think we have 3 separate official recognition parties for you and look forward to seeing all of you on the call. If you can make it, please do. He deserves all of our thanks and recognition.
Returning to the script, as you can see from the materials we released this morning, we had a solid third quarter. Before handing it over to Art for the financial review, I'd like to take a moment to recognize our employees for the terrific job they have done this year serving our customers.
This has been a particularly active year across our territory with regard to storm activity. Not only where we faced with the devastating tornadoes of April 2011, which claimed lives and left thousands homeless in Alabama, Mississippi and Georgia; but throughout the spring and summer, we have seen an unusual number of major storms. Our employees have worked around the clock to restore service as quickly as possible during this challenging period.
We have likewise seen strong storm activity outside our service territory, and Southern Company has responded to that challenge as well. In August, we provided assistance to utilities hit hard by the effects of hurricane Irene, which left millions without power, a total of 740 Southern Company employees were dispatched to help with that restoration effort in multiple states up and down the Eastern seaboard.
Just a few weeks later, our own territory was hit hard by Tropical Storm Lee, and the same crews that had deployed to the Northeast returned home and reported, without rest, to support that restoration effort, which lasted several days. As we have faced and met these challenges, it has been our employees' unparalleled commitment to customers that has made the difference. Our employees know that putting the customer first is what makes Southern Company successful, and their actions speak louder than any words I can offer.
At this point, I'll turn to Art for a discussion of our financial highlights for the third quarter and our earnings guidance for the remainder of 2011.
Art P. Beattie
Thanks, Tom. As Tom said, our third quarter performance was solid. In the third quarter of 2011, we reported earnings of $1.07 a share compared with $0.98 a share in the third quarter of 2010, an increase of $0.09 a share.
Let's turn now to the major factors that drove our third quarter numbers compared with the third quarter of 2010. First, the positive factors. Retail revenue effects in our traditional business added a total of $0.17 a share to our earnings in the third quarter of 2011 compared with the third quarter of 2010. Most of this increase was the result of regulatory actions at Georgia Power that became effective in January 2011.
Changes in non-fuel O&M spending increased our earnings by $0.03 a share in the third quarter of 2011 compared to the third quarter of 2010. This effect is due primarily to the absence of a discretionary accrual to the natural disaster reserve at Alabama Power that negatively affected earnings in the third quarter of 2010. Finally, a reduction in interest expense increased our earnings by $0.01 a share during the third quarter of 2011 compared to the third quarter of 2010.