The Southern Company

Good afternoon. My name is Robert, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Southern Company fourth quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Greg McLeod, Director, Investor Relations. Please go ahead, sir.

Thanks, Robert. Good afternoon, and welcome to Southern Company's fourth quarter 2024 earnings call. Joining me today are Chris Womack, Chairman, President, and Chief Executive Officer of Southern Company, and Dan Tucker, 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 securities filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning, as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I'll turn the call over to Chris. Thank you, Greg.

Good afternoon and thank you for joining us today. 2024 was an outstanding year for Southern Company, both operationally and financially. We achieved adjusted earnings at the very top of our EPS guidance range, which represents 11% growth from our 2023 adjusted results. All of our business units executed on their plans and delivered. exceptional value to our customers and investors alike. I am incredibly proud of how our team continued to put customers first throughout 2024. While this is our daily mission, our dedication was especially evident as our team came together over the past year in response to several weather events which adversely impacted many of our customers, including the most destructive storm in Georgia Power's history this past fall. Delivering clean, safe, reliable, and affordable energy to the communities and customers we are privileged to serve will remain our top priority. Looking forward, we believe our portfolio of companies is incredibly well positioned to capitalize on significant opportunities to serve growth and improve our local economies and to sustain success over the long term. The foundation of our business model remains our state regulated utility franchises. The tremendous value inherent in our three electric utilities and four natural gas distribution utilities is a function of our continuous focus on our 9 million customers, our constructive regulatory environments with orderly processes, and service territories with strong long-term fundamentals. Economic development activities at our utilities is robust and should provide a tremendous foundation for regular, predictable, and sustainable long-term earnings growth. Over the past year, more than 150 companies either announced expanded operations or made the decision to locate new facilities in our southeastern footprint. These projects are expected to support over 20,000 new jobs, further highlighting that the region we proudly serve is thriving. Some of the larger announcements over the past year were in the manufacturing, entertainment, chemical, and metals industries. The economic development pipeline from large electric load customers, including data centers and large manufacturers, represents over 50,000 megawatts of potential incremental load by the mid-2030s. Data centers alone represent roughly 80% of that potential load. While our disciplined approach to forecasting results and a risk adjusted outlook for sales growth comprised of only a fraction of the economic development pipeline, we are encouraged to have commitments for over 10,000 megawatts with advanced discussions and progress for even more. We remain committed to our approach to sustainably serving this exciting growth opportunity, including pricing and contract terms designed to protect our investments and provide economic benefits back to existing customers. We are also encouraged to see the data center momentum first observed in Georgia expanding into both Alabama and Mississippi. We recently signed contracts to serve the power needs of data centers in these two states that total over 1,000 megawatts. While our state regulated utilities are expected to represent approximately 95% of our projected capital investments, we have also continued to invest in our other complementary strategically aligned businesses. Many of these businesses add depth to our vertical integration and provide us with unique market insights that help us attract and better serve customers in our regulated footprints. They also represent potential opportunities to add durability to our long-term earnings trajectory. Southern Power, our competitive power business, represents a terrific complement to our state regulated businesses. Substantially, all its assets are on the long-term contracts with creditworthy counterparties, and we don't take meaningful commodity risk. In total, Southern Power's portfolio has approximately 13,000 megawatts of capacity across 50-plus generating facilities in 15 states, including approximately 7,000 megawatts of natural gas generation, 3,000 megawatts of solar, and 3,000 megawatts of wind. Southern Power has 500 megawatts of solar currently under construction with projected in-service dates in 2025 and 2026. We will continue to be opportunistic on new renewable energy projects that meet our stringent risk return criteria. The burgeoning need for reliable, dispatchable natural gas capacity unlocks four significant opportunities for Southern Power. First, as contracts on our existing natural gas fleet come up for renewal beginning in early 2030s, The load growth in the Southeast is expected to support future renewal pricing that is significantly higher than our existing contracts. Second, meaningful upgrade opportunities are being evaluated on Southern Power's legacy natural gas fleet. These could translate into several hundred additional megawatts available to meet future market demands for capacity. Third, Southern Power has options at its existing plant sites to build new brownfield power plants in the Southeast. And lastly, Southern Power is exploring opportunities outside of the Southeast to serve data centers with new natural gas generation. We are very gratified to have developed and retained this incredibly valuable business as it represents a tremendous opportunity to support sustainable growth well into the next decade. In 2016, when Southern Company acquired what is now Southern Company Gas, we sought to further vertically integrate along the energy value chain. An important additional element of that vertical integration was our 50% investment in the Southern Natural Gas Pipeline, which overlays our three electric service territories, as well as one of our largest natural gas franchises. As previously disclosed by our operating partner, Kendall Morgan, This pipeline is poised for growth, largely to support increased natural gas generation throughout the Southeast. Southern Natural Gas, as well as our other smaller FERC-related pipeline investments, provide a terrific complement to our core growth prospects. Even two of our smallest subsidiaries, both of which have seen accelerated growth recently due to expanding computing power demand, have been incredibly valuable for deeper appreciation and understanding of the current market. PowerSecure, which specializes in providing utility and energy solutions to commercial, industrial, and load-serving customers, has seen its business bolstered by the growth in data centers. This has led to a more comprehensive understanding of data center needs and has enhanced our relationships with many national data center owners. Another example of the value in our smaller complimentary subsidiaries is Southern Telecom. On its own and in partnership with our electric utilities, Southern Telecom deploys fiber optic infrastructure that serves as an important and attractive additional product offering, enhancing the appeal to data intensive customers to locate in our southeastern service territories. Over time, We have exercised exceptional discipline and intentionality in refining our portfolio of businesses. We believe this has uniquely positioned Southern Company to deliver reliable and affordable energy to our customers, as well as to deliver premier risk-adjusted total shareholder returns to our investors. Dan, I'll now turn the call over to you.