Southern Company (NYSE:SO) Q4 2016 Earnings Conference Call - Final Transcript
Feb 22, 2017 • 01:00 pm ET
Good afternoon. My name is Suzy, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Fourth Quarter 2016 Earnings. [Operator Instructions] As a reminder, this conference is being recorded Wednesday, February 22, 2017.
I would now like to turn the call over to Mr. Aaron Abramovitz, Director of Investor Relations. Please go ahead, sir.
Thank you, Suzy. Welcome to Southern Company's fourth quarter 2016 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. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K and subsequent filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measures are included in the financial information and slides we released this morning and are available at investor.southerncompany.com.
At this time, I'll turn the call over to Tom Fanning.
Thomas A. Fanning
Good afternoon and thank you for joining us. As always, we appreciate your interest in Southern Company. We have a long list of outstanding accomplishments for 2016 and we are well positioned for continued success in 2017 and beyond. We shared many of our 2016 successes at our Analyst Day, but I'd like to recap just a few.
Our longest standing strength is the operation of premier state-regulated utilities. The addition of Southern Company Gas broadens our opportunity to leverage our customer-focused business model, which has long supported constructive regulatory relationships, world-class customer satisfaction and regular predictable and sustainable returns on investment. As evidenced by the efficient merger approval processes that were completed in the first half of 2016, all of these newly added LDCs have constructive regulatory framework and well-established regulatory relationships.
Recall that one of the key rationales for our acquisition of Southern Company Gas was to create a platform for future growth in gas infrastructure. On the heels of completing the AGL Resources merger, we acquired 50% of Southern Natural Gas which serves the vast majority of our state regulated utilities in the Southeast and is arguably the crown jewel of the interstate natural gas pipelines in the southeastern United States. Not only does our ownership provide for stable long-term earnings and cash flows, it is also expected to provide growth opportunities in the future.
At Southern Power, we invested nearly $5 billion in 2016 and began a shift towards wind. At the very end of the year, Southern Power signed an agreement with RES to jointly develop 3,000 megawatts of wind projects with an in-service date of 2018 through 2020. Southern Power will co-originate the PPA's for this pipeline of projects and will procure turbines through two supply agreements with Vestas and Siemens. Our initial turbine purchases in 2016 provide a safe harbor for 100% of the 2016