Southern Company (NYSE:SO) Q2 2016 Earnings Conference Call - Final Transcript
Jul 27, 2016 • 01:00 pm ET
Good afternoon. My name is Sylvana, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Second Quarter 2016 Earnings Call. Southern Company second quarter earnings slides were posted today. They can be accessed at www.investor.southerncompany.com/webcasts. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded Wednesday, July 27, 2016.
I would now like to turn the call over to Mr. Aaron Abramovitz, Director of IR. Please go ahead, sir.
Thank you, Sylvana. Welcome to Southern Company's Second Quarter 2016 Earnings Call. Joining me this afternoon are Tom Fanning, Chairman, President and CEO of Southern Company, and Art Beattie, CFO. (Forward-Looking Cautionary Statements) In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information and slides we released this morning and are available at investor.southerncompany.com.
At this time, I will turn the call over to Tom Fanning.
Good afternoon and thank you for joining us. As always, we appreciate your interest in Southern Company. This is an extraordinary time for Southern Company. In addition to our better-than-expected financial results for the quarter, we've had several major accomplishments over the past several months. I'd like to first discuss our business development activities, which are enhancing our low-risk, attractive return business model.
As you know, we completed our merger with AGL Resources on July 1 and subsequently renamed them Southern Company Gas. This acquisition was our first major step in a broader strategy to further expand our business in a meaningful way across the energy value chain. We purchased the gas infrastructure company with high growth projections at a great price, and in the process retained a top-notch natural gas management team. The regulatory approval process was constructive and uneventful.
We were able to close the transaction faster and at a lower cost, including our debt and equity financings, than we originally expected. Southern Company Gas is a great addition to our company and should contribute positively towards fulfilling her shareholder value proposition for a very long time. Shortly after closing The Southern Company Gas transaction, we announced a strategic venture with Kinder Morgan, in which we agreed to purchase a 50% equity interest in the Southern Natural Gas pipeline system. Subject to Hart-Scott-Rodino review, we anticipate the transaction will be completed by the late third quarter or early fourth quarter of this year.
This is precisely the type of natural gas infrastructure strategy we've discussed for almost two years, and we view this venture as an ideal complement to the newly expanded Southern Company. With natural gas being one of the United States dominant energy solutions for the future, the industrial logic of this transaction is completely clear. And there's hopefully more to come. Kinder Morgan is a recognized leader in natural gas pipeline development. Our two companies have