Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
For The Period
Beginning January 1, 1996 and Ending December 31, 1996
TO THE
U. S. SECURITIES AND EXCHANGE COMMISSION
OF
SOUTHERN COMPANY SERVICES, INC.
(Exact Name of Reporting Company)
SUBSIDIARY SERVICE COMPANY
__________________________________________________________________
("Mutual" or "Subsidiary")
Date of Incorporation April 21, 1949 If not Incorporated, Date of
Organization
State or Sovereign Power Under Which Incorporated or Organized State of
Alabama
Location of Principal Executive Offices of Reporting Company
64 Perimeter Center East
Atlanta, Georgia 30346-6401
Name, title, and address of officer to whom correspondence concerning
this report should be addressed:
Vice President, 64 Perimeter Center East
W. Dean Hudson Comptroller and Atlanta, Georgia 30346-6401
(Name) Chief Financial (Address)
Officer
(Title)
Name of Principal Holding Company Whose Subsidiaries are served by
Reporting Company:
THE SOUTHERN COMPANY
<PAGE>
INSTRUCTIONS FOR USE OF FORM U-13-60
1. Time of Filing.--Rule 94 provides that on or before the first day of
May in each calendar year, each mutual service company and each
subsidiary service company as to which the Commission shall have made a
favorable finding pursuant to Rule 88, and every service company whose
application for approval or declaration pursuant to Rule 88 is pending
shall file with the Commission an annual report on form U-13-60 and in
accordance with the Instructions for that form.
2. Number of Copies.--Each annual report shall be filed in duplicate. The
company should prepare and retain at least one extra copy for itself in
case correspondence with reference to the report become necessary.
3. Period Covered by Report.--The first report filed by any company shall
cover the period from the date the Uniform System of Accounts was
required to be made effective as to that company under Rules 82 and 93
to the end of that calendar year. Subsequent reports should cover a
calendar year.
4. Report Format.--Reports shall be submitted on the forms prepared by the
Commission. If the space provided on any sheet of such form is
inadequate, additional sheets may be inserted of the same size as a
sheet of the form or folded to such size.
5. Money Amounts Displayed.--All money amounts required to be shown in
financial statements may be expressed in whole dollars, in thousands of
dollars or in hundred thousands of dollars, as appropriate and subject
to provisions of Regulation S-X ( 210.3-01(b)).
6. Deficits Displayed.--Deficits and other like entries shall be
indicated by the use of either brackets or a parenthesis with
corresponding reference in footnotes. (Regulation S-X, 210.3-01(c))
7. Major Amendments or Corrections.--Any company desiring to amend or
correct a major omission or error in a report after it has been filed
with the Commission shall submit an amended report including only those
pages, schedules, and entries that are to be amended or corrected. A
cover letter shall be submitted requesting the Commission to
incorporate the amended report changes and shall be signed by a duly
authorized officer of the company.
<PAGE>
INSTRUCTIONS FOR USE OF FORM U-13-60
(Continued)
8. Definitions.--Definitions contained in Instruction 01-8 to the Uniform
System of Accounts for Mutual Service companies and Subsidiary Service
companies, Public Utility Holding Company Act of 1935, as amended
February 2, 1979 shall be applicable to words or terms used
specifically within this Form U-13-60.
9. Organization Chart.--The service company shall submit with each annual
report a copy of its current organization chart.
10. Methods of Allocation.--The service company shall submit with each
annual report a listing of the currently effective methods of
allocation being used by the service company and on file with the
Securities and Exchange Commission pursuant to the Public Utility
Holding Company Act of 1935.
11. Annual Statement of Compensation for Use of Capital Billed.--The
service company shall submit with each annual report a copy of the
annual statement supplied to each associate company in support of the
amount of compensation for use of capital billed during the calendar
year.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
2
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS
---------------------------------------------
Schedule or Page
Description of Schedules and Accounts Account Number Number
------------------------------------ -------------- ------
COMPARATIVE BALANCE SHEET Schedule I 4-5
-------------------------
SERVICE COMPANY PROPERTY Schedule II 6-7
ACCUMULATED PROVISION FOR DEPRECIATION
AND AMORTIZATION OF SERVICE COMPANY
PROPERTY Schedule III 8
INVESTMENTS Schedule IV 9
ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES Schedule V 10
FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 11
STORES EXPENSE UNDISTRIBUTED Schedule VII 12
MISCELLANEOUS CURRENT AND ACCRUED
ASSETS Schedule VIII 13
MISCELLANEOUS DEFERRED DEBITS Schedule IX 14
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 15
PROPRIETARY CAPITAL Schedule XI 16
LONG-TERM DEBT Schedule XII 17
CURRENT AND ACCRUED LIABILITIES Schedule XIII 18
NOTES TO FINANCIAL STATEMENTS Schedule XIV 19
COMPARATIVE INCOME STATEMENT Schedule XV 20
----------------------------
ANALYSIS OF BILLING - ASSOCIATE
COMPANIES Account 457 21
ANALYSIS OF BILLING - NONASSOCIATE
COMPANIES Account 458 22
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE
AND NONASSOCIATE COMPANIES Schedule XVI 23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
3
LISTING OF SCHEDULES AND ANALYSIS OF ACCOUNTS (Continued)
---------------------------------------------
Schedule or Page
Description of Schedules and Accounts Account Number Number
------------------------------------- -------------- ------
SCHEDULE OF EXPENSE BY DEPARTMENT OR
SERVICE FUNCTION Schedule XVII 24-25
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 26
OUTSIDE SERVICES EMPLOYED Account 923 27
EMPLOYEE PENSIONS AND BENEFITS Account 926 28
GENERAL ADVERTISING EXPENSES Account 930.1 29
MISCELLANEOUS GENERAL EXPENSES Account 930.2 30
RENTS Account 931 31
TAXES OTHER THAN INCOME TAXES Account 408 32
DONATIONS Account 426.1 33
OTHER DEDUCTIONS Account 426.5 34
NOTES TO STATEMENT OF INCOME Schedule XVIII 35
FINANCIAL DATA SCHEDULE Schedule XIX 36
ORGANIZATION CHART 37
METHODS OF ALLOCATION 38
ANNUAL STATEMENT OF COMPENSATION FOR USE
OF CAPITAL BILLED 39
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
(Thousands of Dollars)
SCHEDULE I - COMPARATIVE BALANCE SHEET
Give balance sheet of the Company as of December 31 of the current and prior
year.
ACCOUNT ASSETS AND OTHER DEBITS AS OF DECEMBER 31
- ------- ---------------------- ----------------------
SERVICE COMPANY PROPERTY CURRENT PRIOR
------------------------ ------- ------
101 Service company property (Schedule II) 234,904 228,515
107 Construction work in progress (Schedule II) 22,118 17,492
------- -------
Total Property 257,022 246,007
------- -------
108 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) 132,535 121,392
------- -------
Net Service Company Property 124,487 124,615
------- -------
INVESTMENTS
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) 3,925 3,401
------- -------
Total Investments 3,925 3,401
------- -------
CURRENT AND ACCRUED ASSETS
131 Cash - -
134 Special deposits - -
135 Working funds 5 -
136 Temporary cash investments (Schedule IV) 4,602 -
141 Notes receivable - 3
143 Accounts receivable 38,918 31,603
146 Accounts receivable from associate
companies (Schedule V) 91,208 133,339
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies 2,951 1,764
163 Stores expense undistributed (Schedule VII) - -
165 Prepayments 1,937 1,601
174 Miscellaneous current and accrued assets
(Schedule VIII) 65 -
------- -----
Total Current and Accrued Assets 139,686 168,310
------- -------
DEFERRED DEBITS
181 Unamortized debt expense - 1
184 Clearing accounts 108 1
186 Miscellaneous deferred debits (Schedule IX) 6,743 7,676
188 Research, development, or demonstration
expenditures (Schedule X) - -
190 Accumulated deferred income taxes - -
------- -----
Total Deferred Debits 6,851 7,678
------- -------
TOTAL ASSETS AND OTHER DEBITS 274,949 304,004
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
5
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
(Thousands of Dollars)
SCHEDULE I - COMPARATIVE BALANCE SHEET
ACCOUNT LIABILITIES AND PROPRIETARY CAPITAL AS OF DECEMBER 31
- ------- ----------------------------------- ------------------
CURRENT PRIOR
------ -----
PROPRIETARY CAPITAL
-------------------
201 Common stock issued (Schedule XI) 725 725
211 Miscellaneous paid-in-capital (Schedule XI) 150 150
215 Appropriated retained earnings (Schedule XI) - -
216 Unappropriated retained earnings
(Schedule XI) - -
------- -------
Total Proprietary Capital 875 875
------- -------
LONG-TERM DEBT
--------------
223 Advances from associate companies (Schedule XII) - -
224 Other long-term debt (Schedule XII) 47,658 63,450
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt-debit - -
------- -----
Total Long-Term Debt 47,658 63,450
------- -------
CURRENT AND ACCRUED LIABILITIES
-------------------------------
231 Notes payable 15,792 10,599
232 Accounts payable 29,262 26,056
233 Notes payable to associated companies
(Schedule XIII) - 5,890
234 Accounts payable to associate companies
(Schedule XIII) 33,592 42,663
236 Taxes accrued 799 292
237 Interest accrued 62 106
238 Dividends declared - -
241 Tax collections payable 605 1,280
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 67,731 64,272
------- -------
Total Current and Accrued Liabilities 147,843 151,158
------- -------
DEFERRED CREDITS
---------------
253 Other deferred credits 78,573 88,521
255 Accumulated deferred investment tax credits - -
------- -----
Total Deferred Credits 78,573 88,521
------- -------
282 ACCUMULATED DEFERRED INCOME TAXES - -
--------------------------------- ------- -----
TOTAL LIABILITIES AND PROPRIETARY
CAPITAL 274,949 304,004
======= =======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
6
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE II
SERVICE COMPANY PROPERTY
BALANCE AT BALANCE AT
BEGINNING RETIREMENTS OTHER 1/ CLOSE OF
DESCRIPTION OF YEAR ADDITIONS OR SALES CHANGES YEAR
----------- --------- --------- ----------- ------- ----------
SERVICE COMPANY PROPERTY
Account
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT - - - - -
304 LAND & LAND RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS 50,781 - - - 50,781
306 LEASEHOLD
IMPROVEMENTS 21,485 1,826 - (72) 23,239
307 EQUIPMENT 2/ 79,587 6,513 (4,633) (549) 80,918
-
308 OFFICE FURNITURE
AND EQUIPMENT 2/ 34,704 2,238 (1,039) (62) 35,841
-
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT 2/ 1,304 2 (623) 100 783
-
310 AIRCRAFT AND
AIRPORT EQUIPMENT 2/ 28,694 139 (10) - 28,823
-
311 OTHER SERVICE COMPANY
PROPERTY 2/ 3/ 11,960 3,089 (191) (339) 14,519
- - ------- ------- -------- -------- -------
SUB-TOTAL 228,515 13,807 (6,496) (922) 234,904
------- ------- -------- -------- -------
107 CONSTRUCTION WORK
IN PROGRESS 4/ 17,492 4,626 - - 22,118
- ------- ------- -------- ------- -------
TOTAL 246,007 18,433 (6,496) (922) 257,022
======= ======= ======== ======= =======
</TABLE>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
( ) Denotes red figure.
<PAGE>
7
SCHEDULE II-CONTINUED
(Thousands of Dollars)
2/ SUBACCOUNTS ARE REQUIRED FOR EACH CLASS OF EQUIPMENT OWNED. THE SERVICE
COMPANY SHALL PROVIDE A LISTING BY SUBACCOUNT OF EQUIPMENT ADDITIONS
DURING THE YEAR AND THE BALANCE AT THE CLOSE OF THE YEAR:
BALANCE AT
CLOSE OF
SEC/CLASS SUBACCOUNT DESCRIPTION ADDITIONS YEAR
- --------- ---------------------- --------- ---------
307/02 Research & Laboratory Equip. 973 2,282
307/03 Word Processing/Office
Automation Equip. 1,517 5,120
307/04 Personal Computer Equip. 2,035 32,582
307/05 Computer Equipment 631 23,921
307/11 Telephone Systems 537 7,426
307/12 Telecommunications Equip. 820 9,587
308/01 Furniture & Fixtures 1,279 23,842
308/09 Data Handling Equipment
& Miscellaneous 959 11,999
309/08 Autos, Trucks & Trailers 2 783
310/07 Aircraft 139 28,824
311/10 Software 3,088 12,822
311/13 Coal Pilot Scale Combustion
Facility - 1,671
311/14 Boats 1 26
------ -------
TOTAL 11,981 160,885
====== =======
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
1. Purchased computer software and software licenses.
2. Pulverized coal pilot scale combustion facility.
3. Boats, motors, & trailers
4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
A. An energy management system for the Southern Electric System to be
located at Birmingham, Alabama.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
8
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE III
ACCUMULATED PROVISION FOR DEPRECIATION AND
AMORTIZATION OF SERVICE COMPANY PROPERTY
ADDITIONS OTHER
BALANCE AT CHARGED CHARGES BALANCE AT
BEGINNING TO ADD CLOSE OF
DESCRIPTION OF YEAR ACCT #403 RETIREMENTS (DEDUCT)1/ YEAR
----------- --------- --------- ----------- -------- ----------
Account
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT - - - - -
304 LAND & LAND RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS 20,829 1,989 - - 22,818
306 LEASEHOLD
IMPROVEMENTS 7,398 1,137 - 47 8,582
307 EQUIPMENT 58,031 7,900 (4,389) (1) 61,541
308 OFFICE FURNITURE
AND FIXTURES 18,221 2,639 (985) - 19,875
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT 700 129 (205) - 624
310 AIRCRAFT AND
AIRPORT EQUIPMENT 9,001 1,059 (10) - 10,050
311 OTHER SERVICE
COMPANY PROPERTY 7,212 2,023 (189) (1) 9,045
------- ------ ------ ------ -------
TOTAL 121,392 16,876 (5,778) 45 132,535
======= ====== ====== ====== =======
</TABLE>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
NONE
( ) Denotes red figure.
<PAGE>
9
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE IV
INVESTMENTS
INSTRUCTIONS: Complete the following schedule concerning investments.
Under Account 124, "Other Investments", state each
investment separately, with description, including the
name of issuing company, number of shares or principal
amount, etc.
Under Account 136, "Temporary Cash Investments", list
each investment separately.
BALANCE AT BALANCE AT
EGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- -------- ---------
ACCOUNT 123 - INVESTMENT IN ASSOCIATE
COMPANIES - -
ACCOUNT 124 - OTHER INVESTMENTS
Employee Merchandise Loans 31 9
Employee Energy Loans 2,287 2,520
Energy Insurance Mutual LTD - Reserve 11 11
ACE Limited - Reserve 69 69
Employee Computer Loans 875 1,038
Notes Receivable 86 86
Miscellaneous 42 192
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS - 4,602
------ ------
TOTAL 3,401 8,527
====== ======
<PAGE>
10
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE V
ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
INSTRUCTIONS: Complete the following schedule listing accounts
receivable from each associate company. Where the
service company has provided accommodation or
convenience payments for associate companies, a
separate listing of total payments for each associate
company by subaccount should be provided.
<TABLE>
<CAPTION>
<S> <C> <C>
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- ---------- ----------
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
The Southern Company 890 1,039
Alabama Power Company 34,494 23,947
Georgia Power Company 55,327 36,390
Gulf Power Company 9,488 5,547
Mississippi Power Company 14,243 5,594
Savannah Electric and Power Company 5,903 5,992
Southern Communications Services, Inc. 753 1,500
Southern Development & Investment Group, Inc. 505 662
Southern Electric Generating Company 432 401
Southern Electric International, Inc.* 1,196 1,356
Southern Electric Railroad 75 99
Southern Nuclear Operating Company 10,020 8,656
Southern Telecom Holding Company - 23
Southern Information Holding Company - 1
Trustee for SCS Pension 13 1
------- ------
TOTAL 133,339 91,208
======= ======
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL
PAYMENTS
The Southern Company 2,509
Alabama Power Company 8,066
Georgia Power Company 134,892
Gulf Power Company 24,274
Mississippi Power Company 20,145
Savannah Electric and Power Company 56,258
Southern Communications Services, Inc. 190
Southern Development & Investment Group, Inc. 217
Southern Electric Generating Company 237
Southern Electric International, Inc.* 986
Southern Electric Railroad -
Southern Nuclear Operating Company 476
Trustee for SCS Pension -
--------
The major portion of the above expenses consists of the Integrated System Power
Pool transactions, transactions relating to the System Pension Plan,
transactions relating to the Employee Savings Plan and transactions relating to
the Employee Stock Ownership Plan.
TOTAL PAYMENTS 248,250
* The name of Southern Electric International, Inc. was changed to Southern
Energy, Inc. in October of 1996. For purposes of this report, the name
Southern Electric International, Inc. (SEI) has been used.
</TABLE>
<PAGE>
11
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE VI
FUEL STOCK EXPENSES UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with
respect to fuel stock expenses during the year and
indicate amount attributable to each associate company.
Under the section headed "Summary" listed below give an
overall report of the fuel functions performed by the
service company.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
DESCRIPTION LABOR EXPENSES TOTAL
----------- ----- -------- -----
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED 3,686 2,524 6,210
Total amount billed during current year as follows:
Associated Companies
The Southern Company (3) (2) (5)
Alabama Power Company (1,154) (823) (1,977)
Georgia Power Company (1,508) (947) (2,455)
Gulf Power Company (264) (172) (436)
Mississippi Power Company (385) (227) (612)
Savannah Electric and Power Company (74) (51) (125)
Southern Electric Generating Company (61) (46) (107)
Southern Electric International, Inc. (166) (199) (365)
Southern Electric Railroad (69) (56) (125)
------ ------ ------
Subtotal (3,684) (2,523) (6,207)
------ ------ ------
Nonassociated Companies (2) (1) (3)
TOTAL 0 0 0
====== ====== ======
( ) Denotes red figure.
SUMMARY: Fuel services performed by the service company consists of
acting as agent on behalf of all the system operating
companies on fossil related matters as defined in an operating
agreement with each company.
</TABLE>
<PAGE>
12
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE VII - STORES EXPENSE UNDISTRIBUTED
INSTRUCTIONS: Report the amount of labor and expenses incurred with respect
to stores expense during the year and indicate amount
attributable to each associate company.
DESCRIPTION LABOR EXPENSES TOTAL
----------- ----- -------- -----
ACCOUNT 163 - STORES EXPENSE UNDISTRIBUTED
NOT APPLICABLE
<PAGE>
13
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE VIII
MISCELLANEOUS CURRENT AND ACCRUED ASSETS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped, showing the number of items in each
group.
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- ---------- -----------
ACCOUNT 174 - MISCELLANEOUS CURRENT AND
ACCRUED ASSETS - INTEREST RECEIVABLE -
TEMPORARY CASH INVESTMENTS - 65
<PAGE>
14
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE IX
MISCELLANEOUS DEFERRED DEBITS
INSTRUCTIONS: Provide detail of items in this account. Items less than
$10,000 may be grouped, showing the number of items in each
class.
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- ---------- -----------
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Deposit for Georgia Sales and Use Tax 26 26
Wilsonville Clean-up 1,619 141
Payroll Taxes 13 -
Executive Stock Option Taxes 4 5
Retire Capital Items 19 20
Architectural Fees 560 -
Unamortized Leasehold - Bldg. 66 3,029 2,752
Sundry Delayed Clearance 2,406 2,774
Power Marketing Trading Floor - 1,025
------ ------
Total 7,676 6,743
====== ======
<PAGE>
15
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE X
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
INSTRUCTIONS: Provide a description of each material research, development,
or demonstration project which incurred costs by the service
corporation during the year.
DESCRIPTION AMOUNT
----------- ------
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES 32,871
Total amount billed/incurred during current year as follows:
Government Projects:
Clean Coal Technology Projects:
Yates CT-121 Project (196)
Hammond Wall Fired Project 478
Crist SCR Project (315)
Other Government Projects:
Hot Gas Cleanup Project (24,161)
Westinghouse AP600 Design Certification (56)
Generic NOx Control Intelligent System (108)
Westinghouse 1st of Kind Engineering (FOAKE) (1,559)
ERPI Projects:
GNOCIS Demonstration (39)
RE&A EPRI Contracts (1,154)
Advanced End-Use Technologies (86)
EPRI Bioremediation Project (123)
EPRI Bulk Trans. System Reliability (144)
Associate Companies:
Air Quality Studies (105)
Combustion & Fuel Effects (637)
Research Administration (518)
Flue Gas Treatment (433)
Power Delivery Research (57)
Advanced End-Use Technology Research (1,221)
Particulate Control Studies (425)
Advanced Energy Systems (1,500)
Thermal & Fluid Sciences (389)
R&D Tech Econ Assessments (117)
Lead Test Assembly (6)
--------
TOTAL AMOUNT BILLED/INCURRED (32,871)
TOTAL 0
( ) Denotes red figure.
<PAGE>
16
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XI - PROPRIETARY CAPITAL
NUMBER OF PAR OR STATED OUTSTANDING
ACCOUNT SHARES VALUE CLOSE
NUMBER CLASS OF STOCK AUTHORIZED PER SHARE OF PERIOD
- ------ -------------- ----------- ------------ ------------
201 COMMON STOCK NO. OF SHARES
ISSUED 17,000 50.00 14,500
TOTAL AMOUNT
725
INSTRUCTIONS: Classify amounts in each account with brief explanation,
disclosing the general nature of transactions which gave rise
to the reported amounts.
DESCRIPTION AMOUNT
- ----------- ------
ACCOUNT 211
MISCELLANEOUS PAID-IN CAPITAL 150
ACCOUNT 215
APPROPRIATED RETAINED EARNINGS -
TOTAL 150
INSTRUCTIONS: Give particulars concerning net income or (loss) during the
year, distinguishing between compensation for the use of
capital owed or net loss remaining from servicing
nonassociates per the General Instructions of the Uniform
System of Accounts. For dividends paid during the year in
cash or otherwise, provide rate percentage, amount of
dividend, date declared and date paid.
BALANCE AT NET INCOME BALANCE AT
BEGINNING OR DIVIDENDS CLOSE
DESCRIPTION OF YEAR (LOSS) PAID OF YEAR
- ----------- --------- -------- -------- ---------
ACCOUNT 216
UNAPPROPRIATED RETAINED
EARNINGS - - - -
TOTAL - - - -
<PAGE>
17
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XII - LONG-TERM DEBT
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INSTRUCTIONS: Advances from associate companies should be reported separately for advances on notes, and advances on open account.
Names of associate companies from which advances were received shall be shown under the class and series of
obligation column. For Account 224 - Other Long-Term Debt provide the name of creditor company or organization,
terms of the obligation, date of maturity, interest rate, and the amount authorized and outstanding.
TERMS OF OBLIG DATE BALANCE AT BALANCE AT
CLASS & SERIES OF INTEREST AMOUNT BEGINNING 1/ CLOSE
NAME OF CREDITOR OF OBLIGATION MATURITY RATE UTHORIZED OF YEAR ADDITIONS DEDUCTIONS OF YEAR
- ---------------- -------------- -------- -------- --------- ---------- --------- ---------- --------
ACCOUNT 223 - ADVANCES FROM ASSOCIATE
COMPANIES:
NOT APPLICABLE
ACCOUNT 224 - OTHER LONG-TERM DEBT:
Notes Payable
CIBC, Inc. 09/09/1997 4.94 15,000 15,000 - 15,000 -
------ ------ -------- ------- ------
Subtotal 15,000 15,000 - 15,000 -
------ ------ -------- ------ -----
OTHER LONG-TERM DEBT:
CAPITAL LEASE OBLIGATION
Beacon Properties 02/01/2011 9.25 7,225 5,689 - 204 5,485
Beacon Properties 02/01/2011 13.00 41,551 42,761 - 588 42,173
------ ------ --------- -------- ------
Subtotal 48,776 48,450 - 792 47,658
------ ------ --------- -------- ------
TOTAL 63,776 63,450 - 15,792 47,658
====== ====== ========= ======= ======
1/ GIVE AN EXPLANATION OF DEDUCTIONS: CIBC - Deductions of $15,000,000.00 transferred to current maturities. Beacon
Properties (Formerly Taylor & Mathis) - Deductions of $791,657.21 transferred to
current maturities.
</TABLE>
<PAGE>
18
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
INSTRUCTIONS: Provide balance of notes and accounts payable to each associate
company. Give description and amount of miscellaneous current
and accrued liabilities. Items less than $10,000 may be grouped,
showing the number of items in each group.
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- -------- ---------
ACCOUNT 233 - NOTES PAYABLE TO ASSOCIATE COMPANIES
The Southern Company 5,890 -
------ -----
TOTAL 5,890 -
====== =====
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
The Southern Company - -
Alabama Power Company 29,554 22,818
Georgia Power Company 4,175 1,761
Gulf Power Company 1,362 1,221
Mississippi Power Company 268 270
Savannah Electric and Power Company 15 22
Southern Electric Generating Company 38 -
Southern Electric International, Inc. 967 967
Southern Communications Services, Inc. - 373
Southern Nuclear Operating Company 5,936 5,712
Southern Development & Investment Group 348 448
------ ------
TOTAL 42,663 33,592
====== ======
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES
Incentive Pay 22,410 20,621
Vacation Clearing Account 16,727 16,175
Accrued Labor & Related Overheads 2,924 4,174
Employee Group Insurance Premiums 1,234 704
Early Retirement Benefits 1,594 1,374
Productivity Improvement Program 12,447 11,926
Accumulated Provision for Major Overhaul
of Aircraft 1,416 1,214
Supplemental Pensions and Benefits 645 731
Department of Energy 262 (75)
Flex and Save Benefits 1,248 1,658
Post Employment Benefits 66 66
Severance Pay 2,864 8,107
Metro Life Advance-Current 56 176
(Continued on Page 18A)
<PAGE>
18A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
(Continued)
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- ------- --------
Associate Companies - ESP (7) (761)
APCO - U.S. Savings Bond Withholdings 108 -
Commitment Fees - Credit Lines 80 71
Accrued Bank Fees 149 136
APCO - Supplemental Life Ins. - Pension (24) (66)
GPCO - Charitable Contributions
Withholdings 12 -
SCS - Employee Savings Plan (213) 567
MPCO - Contributory Life Ins. Withholdings
- Pension 12 12
MPCO - Medical Withholdings 116 (565)
APCO - Contributory Life Withholdings (4) 13
APCO - Personal Auto Maintenance - 23
SCS - U.S. Savings Bonds Withholdings 52 94
GPCO - Contributory Life Withholdings
- Pension 5 17
SCS - GPCO-Efficiency Store Withholdings 1 12
GUPCO - Medical Withholdings - 667
MPCO - Contributory Life Withholdings - 422
MPCO - Medical Withholdings-Pension (3) (12)
Funds Dist-Holders SE P&L Corp. 8 13
Miscellaneous (69 Beginning)(78 Ending) 134 37
------ ------
TOTAL 64,272 67,731
====== ======
<PAGE>
19
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing at
the end of the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by reference.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Southern Company Services, Inc.(the "Company") follows the Uniform System of
Accounts prescribed by the Securities and Exchange Commission ("SEC") for
service companies, as amended, effective January 1, 1980.
The Company has no earnings or retained earnings since it primarily
renders services at cost to its parent company, The Southern Company,
and to that company's subsidiaries, as further discussed in Note 2.
The financial statements are prepared in conformity with generally
accepted accounting principles which requires the use of estimates. The
actual results may differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with original maturities
of 90 days or less to be cash equivalents. The carrying value of cash and
cash equivalents approximates fair value.
Income Taxes
The Company is included in the consolidated federal income tax return
with The Southern Company and its subsidiaries. Federal income tax
deferrals primarily resulting from the use of accelerated depreciation
are fully utilized and accounted for by the operating subsidiaries of
The Southern Company.
Property, Equipment, and Depreciation and Amortization
Property and equipment, including any interest capitalized during
construction, are recorded at cost. Depreciation and amortization are
provided on the straight-line method over the estimated economic life of
the related asset (ranging from 5 to 12 years). Leasehold improvements
are amortized over the lives of the respective leases.
<PAGE>
19A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing at
the end of the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by reference.
On retirement or sale of assets, the cost of such assets and the related
accumulated depreciation are removed from the accounts, and the gain or
loss, if any, is credited or charged to income.
2. SERVICE AGREEMENTS
The Southern Company and each of its operating subsidiaries (Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi
Power Company, and Savannah Electric and Power Company), Southern
Electric Generating Company (an operating subsidiary owned equally by
Alabama Power Company and Georgia Power Company), Southern Electric
International, Inc. (a subsidiary of The Southern Company which designs,
builds, owns, and operates power production facilities and provides a
broad range of technical services to industrial companies and utilities
in the United States and a number of international markets), Southern
Development and Investment Group, Inc. (a subsidiary of The Southern
Company which researches and develops new business opportunities),
Southern Nuclear Operating Company (a subsidiary of The Southern Company
which provides services to the Southern electric system nuclear power
plants), Southern Electric Railroad Company (a subsidiary of The
Southern Company, which provides railroad services to the operating
subsidiaries) and Southern Communications Services, Inc. (a subsidiary
of The Southern Company, which provides wireless communications services
to the operating subsidiaries and their customers) have entered into
agreements with the Company under which the Company renders the
following services at cost: general executive and advisory services,
general engineering, design engineering, purchasing, accounting and
statistical, finance and treasury, tax, insurance and pension, rate,
budgeting, business promotion and public relations, employee relations,
systems and procedures, and other services with respect to business and
operations and, in the case of operating subsidiaries, power pool
operations. The agreements shall be canceled to the extent and from the
time that performance thereunder conflicts with any rule, regulation, or
order of the SEC adopted before or after the execution of the
agreements.
<PAGE>
19B
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes regarding the
financial statements or any account thereof. Furnish particulars
as to any significant contingent assets or liabilities existing
at the end of the year. Notes relating to financial statements
shown elsewhere in this report may be indicated here by
reference.
3. RETIREMENT BENEFITS
Pension Costs
The Company has a defined benefit, trusteed, noncontributory pension
plan which covers substantially all regular employees. The Company uses
the "entry age normal method with frozen initial liability" actuarial
method for funding purposes, subject to limitations under federal income
tax regulations. Amounts funded to the pension trusts are primarily
invested in equity and fixed-income securities. Statement of Financial
Accounting Standards No. 87, "Employers' Accounting for Pensions,"
requires use of the "projected unit credit" actuarial method for
financial reporting purposes.
Other Postretirement Benefits
The Company provides certain health care and life insurance benefits for
retired employees. Substantially all employees may become eligible for
these benefits when they retire. Trusts are funded to the extent
deductible under federal income tax regulations. Amounts funded are
primarily invested in debt and equity securities.
Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" requires
that medical care and life insurance benefits for retired employees be
accounted for on an accrual basis, using a specified actuarial method,
"benefit/years-of-service."
Funded Status and Cost of Benefits
The following tables show actuarial results and assumptions for pension
and post retirement insurance benefits as computed under the
requirements of FASB Statement Nos. 87 and 106, respectively. The funded
status of the plans at December 31 was as follows:
<PAGE>
19C
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
Pension
1996 1995
-----------------------------
Actuarial present value of
benefit obligations:
Vested benefits 208,808 172,643
Non-vested benefits 16,361 12,308
-------- --------
Accumulated benefit obligation 225,169 184,951
Additional amounts related to
projected salary increases 104,606 86,455
-------- --------
Projected benefit obligation 329,775 271,406
Less:
Fair value of plan assets 479,484 376,547
Unrecognized net gain (151,659) (121,438)
Unrecognized prior service cost 13,194 5,303
Unrecognized net transition asset (12,664) (13,970)
--------- ---------
Accrued liability recognized
in the balance sheets 1,420 24,964
======== ========
Postretirement Benefits
1996 1995
-----------------------
Actuarial present value of
benefit obligation:
Retirees and Dependents 29,321 28,054
Employees eligible to retire 5,480 3,869
Other employees 39,655 40,413
------- -------
Accumulated benefit obligations 74,456 72,336
Less:
Fair value of plan assets 18,674 16,656
Unrecognized net loss (gain) 2,849 3,464
Unrecognized transition obligation 6,575 9,807
------- -------
Accrued liability recognized in the
balance sheets 46,358 42,409
====== ======
<PAGE>
19D
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
The weighted average rates assumed in the actuarial calculations were:
1996 1995
---- ----
Discount 7.75% 7.25%
Annual salary increase 5.25% 4.75%
Long-term return on plan assets 8.5% 8.5%
An additional assumption used in measuring the accumulated
postretirement medical benefit obligation was a weighted average medical
care cost trend rate of 9.25 percent for 1996 decreasing gradually to
5.75 percent through the year 2005 and remaining at that level
thereafter. An annual increase in the assumed medical care cost trend
rate of 1 percent would increase the accumulated medical benefit
obligation at December 31, 1996, by $5.9 million and the aggregate of
the service and interest cost components of the net retiree medical cost
by $0.6 million.
<PAGE>
19E
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
Components of the plans net costs are shown below:
Pension
1996 1995
----------------------
Benefits earned during the year 12,538 8,878
Interest cost on projected
benefit obligation 18,031 17,484
Actual (return) loss on plan assets (44,746) (70,331)
Net amortization and deferral 2,613 40,828
------- -------
Net pension income (11,564) (3,141)
======= ======
Postretirement Benefits
1996 1995
------------------------
Benefits earned during the year 2,216 2,441
Interest cost on accumulated
benefit obligation 5,134 5,158
Amortization of transition obligation 405 1,317
Actual (return) loss on plan assets (2,015) (3,230)
Net amortization and deferral 849 2,021
------ ------
Net postretirement costs 6,589 7,707
===== =====
Work Force Reduction Programs
The Company has incurred additional costs for work force reduction programs.
The costs related to these programs were $20 million and $1 million for 1996
and 1995, respectively. These costs were charged to income.
<PAGE>
19F
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
4. LONG-TERM OPERATING LEASES
The Company leases various facilities and equipment under noncancelable
operating lease arrangements. Rental expense under all operating leases
was approximately $23,254,000 and $12,800,000 in 1996 and 1995,
respectively. Future minimum lease payments under these noncancelable
operating leases as of December 31, 1996 are as follows:
1997 30,144
1998 26,785
1999 19,329
2000 8,290
2001 6,275
Thereafter 37,095
-------
Total 127,918
5. LONG-TERM DEBT AND NOTES PAYABLE - OTHER
Details of long-term debt and notes payable - other at December 31 are as
follows:
1996 1995
------ -----
(In Thousands)
Long-term debt
Notes payable:
4.62% due 1996 - 10,000
4.94% due 1997 15,000 15,000
-------- --------
15,000 25,000
-------- --------
Less Current Maturities (15,000) (10,000)
-------- --------
- 15,000
-------- --------
Capitalized lease obligations:
9 1/4% building lease 5,689 5,874
13% building lease 42,761 43,174
-------- --------
48,450 49,048
-------- --------
Less Current Maturities (792) (598)
-------- --------
47,658 48,450
-------- --------
Total long-term debt 47,658 63,450
======= =======
<PAGE>
19G
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
SCHEDULE XIV
NOTES TO FINANCIAL STATEMENTS
INSTRUCTIONS: The space below is provided for important notes
regarding the financial statements or any account
thereof. Furnish particulars as to any significant
contingent assets or liabilities existing at the end of
the year. Notes relating to financial statements shown
elsewhere in this report may be indicated here by
reference.
The Southern Company has guaranteed the payment of the above notes and
the rental payments relating to the 13% building lease.
Maturities over the next five years of the Company's long-term debt
outstanding at December 31, 1996 are as follows:
(In Thousands)
1997 15,792
1998 1,011
1999 1,259
2000 1,542
2001 1,862
Thereafter 41,984
------
Total 63,450
======
Assets acquired under capital leases are recorded in the Company's
balance sheets as office building. The net book value of assets acquired
under capitalized leases was approximately $26,688,179 and $28,572,000
at December 31, 1996 and 1995, respectively.
In January 1994, Southern Company Services, Inc. sold to Orchard L.L.C.
the office building located at 800 Shades Creek Parkway in Birmingham.
The Company at that time entered into a four year operating lease with
Orchard.
Financial Instruments
In accordance with Statement of Financial Accounting Standards No. 107,
"Disclosure About Fair Value of Financial Instruments," all financial
instruments of the Company - for which the carrying amount does not
approximate fair value - are shown in the table below as of December 31:
Long-Term Debt
Carrying Fair
Amount Value
------- ------
(In Millions)
1996 15.0 14.9
1995 25.0 24.8
The fair values for long-term debt were based on closing prices of
comparable instruments.
6. PURCHASE COMMITMENTS
The Company has purchase commitments for computer hardware and software.
At December 31, 1996, future expenditures for these commitments are
estimated to be approximately $3,600,000 in 1997.
<PAGE>
20
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XV
STATEMENT OF INCOME
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR
- -------- ----------- ------------- ----------
INCOME
457 Services rendered to associate companies 506,928 378,677
458 Services rendered to nonassociate
companies 31,893 70,665
421 Miscellaneous income or loss 3,179 2,890
------- -------
Total Income 542,000 452,232
------- -------
EXPENSE
920 Salaries and wages 230,023 181,613
921 Office supplies and expenses 66,950 62,037
922 Administrative expense transferred-
credit - -
923 Outside services employed 115,690 107,105
924 Property insurance 748 1,139
925 Injuries and damages 101 269
926 Employee pensions and benefits 22,029 20,340
928 Regulatory commission expense 606 69
930.1 General advertising expenses - -
930.2 Miscellaneous general expenses 20,696 10,854
931 Rents 23,254 12,807
932 Maintenance of structures and
equipment 22,118 16,520
403 Depreciation and amortization expense 16,922 17,971
408 Taxes other than income taxes 15,176 13,229
409 Income taxes 80 95
410 Provision for deferred income taxes - -
411 Provision for deferred income taxes -
credit - -
411.5 Investment tax credit - -
426.1 Donations 1,014 661
426.5 Other deductions - -
427 Interest on long-term debt 6,296 6,630
430 Interest on debt to associate companies 231 149
431 Other interest expense 66 744
------- -------
Total Expense 542,000 452,232
------- -------
Net Income or (Loss) - -
======= =======
</TABLE>
<PAGE>
21
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DIRECT INDIRECT COMPENSAT'N TOTAL
COSTS COSTS FOR USE AMOUNT
NAME OF ASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL BILLED
- ------------------------- ------- ------- ----------- -------
457-1 457-2 457-3
The Southern Company 7,042 1,677 177 8,896
Alabama Power Company 100,705 28,792 1,683 131,180
Georgia Power Company 145,840 41,317 3,111 190,268
Gulf Power Company 26,416 6,949 353 33,718
Mississippi Power Company 26,621 7,873 358 34,852
Savannah Electric & Power
Company 9,008 1,926 129 11,063
Southern Electric Generating
Company 1,006 376 10 1,392
Southern Electric International,
Inc. 6,667 2,430 136 9,233
Southern Development and
Investment Group, Inc. 5,808 2,206 92 8,106
Southern Nuclear Operating
Company 48,769 16,484 434 65,687
Southern Communication Services 10,437 1,689 87 12,213
Southern Electric Railroad 194 100 1 295
Southern Information Holding Co. - 1 - 1
Southern Telecommunications
Holding Co. 12 12 - 24
-------- -------- ------ --------
TOTAL 388,525 111,832 6,571 506,928
======= ======= ===== =======
</TABLE>
<PAGE>
22
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
ANALYSIS OF BILLING
NONASSOCIATE COMPANIES
ACCOUNT 458
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
DIRECT INDIRECT COMPENSATION EXCESS TOTAL
COSTS COSTS FOR USE TOTAL OR AMOUNT
NAME OF NONASSOCIATE COMPANY CHARGED CHARGED OF CAPITAL COST DEFICIENCY BILLED
- ---------------------------- ------- ------- -------------- ----- ---------- ------
458-1 458-2 458-3 458-4
Department of Energy (DOE) $18,367 $1,998 $ 15 $20,380 $ 0 $20,380
Electric Power Research Institute 4,934 536 4 5,474 0 5,474
Westinghouse 1,456 158 1 1,615 0 1,615
MindSpring 60 6 0 66 0 66
AT&T 15 2 0 17 0 17
Delta Com 29 3 0 32 0 32
Alcoa 24 3 0 27 0 27
MPX Systems 38 4 0 42 0 42
Interstate Fibernet 58 6 0 64 0 64
Bankers Trust Company (Southern
System Master Retirement Trust) 495 54 0 549 0 549
VEBA-Alabama Power 6 1 0 7 0 7
Geothermal Heat Pump Consortium 5 1 0 6 0 6
Fleet Credit Corporation 15 2 0 17 0 17
Powerco Federal Credit Union 27 3 0 30 0 30
Florida Power & Light Co./Jacksonville
Electric Authority/
City of Tallahassee/FPC 1,802 196 1 1,999 0 1,999
Oglethorpe Power Corporation 1,208 131 1 1,340 0 1,340
Southeastern Electric Reliability
Council 32 3 0 35 0 35
Nonassociated Labor Accrual 162 18 0 180 0 180
Other (13 items less than $5,000) 12 1 0 13 0 13
------- ------ --- ------- --- -----------
TOTAL $28,745 $3,126 $22 $31,893 $0 $31,893
======= ====== === ======= == =======
INSTRUCTION: Provide a brief description of the services rendered to each nonassociate company:
Department of Energy (DOE) - Contract services concerning clean coal
technology; hot gas cleanup project, including construction of pilot test
facility. Electric Power Research Institute - GNOCIS demonstrations, ash in
agriculture and land reclamation; burner balancing; multimedia diesel clean-up
at CT; Manages version 2.0 software enhancement; electrokinetic remediation;
fine particulates and air toxic control; pinch study; arsenic remediation;
advanced end-use technologies; bioremediation project; and bulk transmission
system reliability evaluation.
Westinghouse - Subcontracts for the research and design of components of
nuclear reactors.
MindSpring, AT&T, MPX Systems, Interstate Fibernet, and Delta Com -
Telecommunication services related to fiber optics. Alcoa - Purchase of fiber
optic cable. Bankers Trust Co. (Southern System Master Retirement Trust) -
Trustee services provided by Bankers for Southern Company Master Retirement
Trust. VEBA - Alabama Power - Short-term and Financial Services provided to
Voluntary Employee Benefits Association. Geothermal Heat Pump Consortium -
Geothermal Heat Pump Study. Fleet Credit Corporation - Financial services -
Capital replacement services. Powerco Federal Credit Union - Telephone
equipment and other resource usage. Oglethorpe Power - Operating and Planning
Services (OPS) scheduling fees. FP&L, FPC, JEA, and City of Tallahassee - Unit
Power Sales (UPS) agreements. Southeastern Electric Reliability Council -
Occupancy and other related services.
</TABLE>
<PAGE>
23
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INSTRUCTION: Total cost of service will equal for associate and nonassociate companies the total amount billed under their
separate analysis of billing schedules.
( ) Denotes red figure.
ASSOCIATE COMPANY CHARGES NONASSOCIATE COMPANY CHARGES TOTAL CHARGES FOR SERVICE
DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL
- -------------------- -------- -------- ----- -------- -------- ----- ------ -------- -----
920 SALARIES AND WAGES $191,781 $31,680 $223,461 $ 6,224 $ 338 $ 6,562 $198,005 $32,018 $230,023
921 OFFICE SUPPLIES & EXPENSES 51,180 10,414 61,594 5,327 29 5,356 56,507 10,443 66,950
922 ADMINISTRATIVE EXP.
TRANSFERRED-CREDIT - - - - - - - - -
923 OUTSIDE SERVICES EMPLOYED 94,776 7,267 102,043 13,640 7 13,647 108,416 7,274 115,690
924 PROPERTY INSURANCE 346 289 635 112 1 113 458 290 748
925 INJURIES AND DAMAGES 6 95 101 - - - 6 95 101
926 EMPLOYEE PENSIONS
& BENEFITS 1,770 19,859 21,629 - 400 400 1,770 20,259 22,029
928 REGULATORY COMMISSION
EXPENSE 606 - 606 - - - 606 - 606
930.1 GENERAL ADVERTISING
EXPENSES - - - - - - - - -
930.2 MISCELLANEOUS GENERAL
EXPENSES 13,989 1,681 15,670 3,364 1,662 5,026 17,353 3,343 20,696
931 RENTS 12,881 10,245 23,126 30 98 128 12,911 10,343 23,254
932 MAINTENANCE OF STRUCTURES
AND EQUIPMENT 15,618 6,417 22,035 39 44 83 15,657 6,461 22,118
403 DEPRECIATION & AMORTIZATION
EXPENSE 6,761 10,035 16,796 9 117 126 6,770 10,152 16,922
408 TAXES OTHER THAN INCOME
TAXES 1,551 13,195 14,746 - 430 430 1,551 13,625 15,176
409 INCOME TAXES - 80 80 - - - - 80 80
410 PROVISION FOR DEFERRED
INCOME TAXES - - - - - - - - -
411 PROVISION FOR DEFERRED
INCOME TAXES CREDIT - - - - - - - - -
411.5 INVESTMENT TAX CREDIT - - - - - - - - -
426.1 DONATIONS 439 575 1,014 - - - 439 575 1,014
------- ------- ------- ------ ----- ------ ------- ------- -------
SUBTOTAL EXPENSES = 391,704 111,832 503,536 28,745 3,126 31,871 420,449 114,958 535,407
</TABLE>
<PAGE>
23A
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
<S> <C> <C> <C>
ASSOCIATE COMPANY CHARGES NONASSOCIATE COMPANY CHARGES TOTAL CHARGES FOR SERVICE
DIRECT INDIRECT DIRECT INDIRECT DIRECT INDIRECT
DESCRIPTION OF ITEMS COST COST TOTAL COST COST TOTAL COST COST TOTAL
- -------------------- -------- ----------- ----- -------- --------- ----- ------ -------- -----
427 INTEREST ON LONG-TERM DEBT - - 6,274 - - 22 - - 6,296
430 INTEREST ON DEBT TO
ASSOCIATE COMPANIES - - 231 - - - - - 231
431 OTHER INTEREST EXPENSE - - 66 - - - - - 66
------- -------- -------- ------- ------ ------- -------- ------- -------
TOTAL EXPENSES = 391,704 111,832 510,107 28,745 3,126 31,893 420,449 114,958 542,000
421 MISCELLANEOUS GAIN (3,179) - (3,179) - - - (3,179) - (3,179)
-------- -------- -------- -------- ------ ------- -------- -------- --------
TOTAL COST OF SERVICE = $388,525 $111,832 $506,928 $28,745 $3,126 $31,893 $417,270 $114,958 $538,821
======== ======== ======== ======= ====== ======= ======== ======== ========
</TABLE>
<PAGE>
24
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
<S> <C> <C> <C> <C> <C> <C> <C>
INSTRUCTION: Indicate each department or service function. (See Instruction 01-3 General Structure of Accounting System:
Uniform System Account)
( ) Denotes red figure.
DEPARTMENT OR SERVICE FUNCTION
Finance Human
Total and Governmental Resources and Information
DESCRIPTION OF ITEMS Amount Engineering Executive Accounting Affairs Administration Resources
- -------------------- ------ ----------- --------- ---------- ------------ -------------- ----------
920 SALARIES AND WAGES $230,023 $ 51,515 $3,592 $15,411 $1,150 $21,342 $ 68,093
921 OFFICE SUPPLIES AND EXPENSES 66,950 8,324 521 1,762 555 4,204 39,325
923 OUTSIDE SERVICES EMPLOYED 115,690 20,476 840 5,573 1,182 10,760 54,578
924 PROPERTY INSURANCE 748 62 3 24 1 31 102
925 INJURIES AND DAMAGES 101 27 - 7 - 9 32
926 EMPLOYEE PENSIONS & BENEFITS 22,029 4,800 128 1,406 82 2,121 6,559
928 REGULATORY COMMISSION EXPENSE 606 - - 2 - - -
930.2 MISCELLANEOUS GENERAL EXPENSES 20,696 383 369 914 463 9,051 7,315
931 RENTS 23,254 2,036 147 652 44 1,606 13,297
932 MAINTENANCE OF STRUCTURES & EQUIP 22,118 1,575 116 726 14 844 11,699
403 DEPRECIATION & AMORTIZATION
EXPENSE 16,922 2,758 159 1,196 47 1,049 7,606
408 TAXES OTHER THAN INCOME TAXES 15,176 3,621 68 987 42 1,451 5,386
409 INCOME TAXES 80 - - - - - -
426.1 DONATIONS 1,014 - 328 3 179 22 2
427 INTEREST ON LONG-TERM DEBT 6,296 255 177 977 7 846 2,733
430 INTEREST ON DEBT TO ASSOCIATE CO. 231 31 2 9 1 16 86
431 OTHER INTEREST EXPENSE 66 (59) (3) (18) 2 (23) (138)
-------- --------- -------- --------- -------- --------- ----------
TOTAL EXPENSES 542,000 95,804 6,447 29,631 3,769 53,329 216,675
421 MISCELLANEOUS GAIN (3,179) (186) (84) (384) (49) (691) (818)
TOTAL COSTS $538,821 $95,618 $6,363 $29,247 $3,720 $52,638 $215,857
======== ======= ====== ======= ====== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
25
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
DEPARTMENT OR SERVICE FUNCTION
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Planning Research and
ACCOUNT Internal Market Research Public Environmental System Administrative External
NUMBER Audit and Support Production Relations Affairs Aircraft and General Affairs
- ------- -------- ---------------- ---------- --------- -------------- -------- ----------- --------
920 $5,587 $4,722 $27,448 $2,101 $ 6,381 $2,774 $17,406 $2,501
921 900 771 3,599 858 3,995 645 769 722
923 281 2,059 5,175 1,586 7,600 29 2,745 2,806
924 7 6 29 3 118 6 352 4
925 2 2 10 1 3 1 6 1
926 543 426 2,334 197 557 298 2,365 213
928 - 604 - - - - - -
930.2 278 (834) 453 137 375 89 1,654 49
931 485 224 1,105 109 129 64 3,219 137
932 141 157 1,246 60 80 3,644 1,652 164
403 158 318 1,684 210 233 1,257 89 158
408 384 315 1,720 134 404 197 322 145
409 - - - - - - 80 -
426.1 - - - 405 - - 9 66
427 154 231 310 86 (1) (28) 375 174
430 2 2 18 3 3 56 - 2
431 1 (5) (39) (5) 11 (105) 449 (2)
----- --------- ---------- --------- ---------- ------- ---------- ---------
Expenses 8,923 8,998 45,092 5,885 19,888 8,927 31,492 7,140
421 (116) (117) (113) (76) (39) (6) (408) (92)
TOTAL COSTS $8,807 $ 8,881 $44,979 $5,809 $19,849 $8,921 $31,084 $7,046
====== ======= ======= ====== ======= ====== ======= ======
( ) Denotes red figure.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
26
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
DEPARTMENTAL SALARY EXPENSE
<S> <C> <C> <C> <C> <C>
NAME OF DEPARTMENT INCLUDED IN AMOUNTS BILLED TO PERSONNEL
- ------------------ ------------------------------ -----------------------
Indicate each department TOTAL PARENT OTHER NON END OF
or service function AMOUNT COMPANY ASSOCIATES ASSOCIATES YEAR
------ ------- ---------- ---------- ------
Engineering 51,515 36 48,348 3,131 631
Executive 3,592 612 2,980 - 6
Finance & Accounting 15,411 815 14,261 335 193
Governmental Affairs 1,150 21 1,129 - 9
Human Resources & Admin. 21,342 61 21,277 4 274
Information Resources 68,093 89 67,770 234 1,011
Internal Auditing 5,587 253 5,334 - 74
Planning Marketing
Research & Support 4,722 14 4,707 1 54
Production 27,448 35 27,079 334 312
Public Relations 2,101 485 1,616 - 31
Research & Environmental
Affairs 6,381 - 4,131 2,250 77
System Aircraft 2,774 311 2,463 - 45
External Affairs 17,406 545 16,861 - 41
Administrative & General 2,501 425 1,801 275 -
------- ----- ------- ----- ---
TOTAL 230,023 3,702 219,757 6,564 2,758
======= ===== ======= ===== =====
</TABLE>
( ) Denotes red figure.
<PAGE>
27
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services
employed. If the aggregate amounts paid to any one
payee and included within one subaccount is less than
$100,000, only the aggregate number and amount of all
such payments included within the subaccount need be
shown. Provide a subtotal for each type of service.
<S> <C> <C> <C>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- -------
Legal Services
Balch & Bingham Legal Services NA 2,865
Edison Electric Institute Industry Initiative NA 108
Troutman, Sanders Legal Services NA 2,685
Twenty-One Other Items (less
than $100,000 paid to other
than Associate Cos.) Aggregate NA 519
------
6,177
Auditing Service
Arthur Andersen LLP Audit Services NA 692
Deloitte&Touche Consulting Consulting Services (Credit) NA (160)
One Other Items (less
than $100,000 paid to other
than Associate Cos.) Aggregate NA 2
------
534
(Continued on Page 27A)
</TABLE>
<PAGE>
27A
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services
employed. If the aggregate amounts paid to any one
payee and included within one subaccount is less than
$100,000, only the aggregate number and amount of all
such payments included within the subaccount need be
shown. Provide a subtotal for each type of service.
<S> <C> <C> <C>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
Engineering Services
ABB C-E Services, Inc. Engineering Services NA 145
ADECCO Services Engineering, Personnel Serv. NA 227
Alabama Power Company Contract Engineering Serv. A 649
BE&K Engineering Co. Contract Engineering Serv. NA 4,484
Bechtel Power Corp. Contract Engineers-Constructors NA 4,467
Comprehensive Computer
Consulting, Inc. Contract Programming NA 107
Cowin Equip. Co., Inc. Engineering Services NA 171
Industrial Filter&Pump Mfg. Power Systems Development-DOE NA 249
Radian Corporation Engineering Services NA 410
Rust International Corp. Labor Broker Agreement NA 186
Shook & Fletcher
Insulation Co. Power Systems Development-DOE NA 354
Southern Research Institute Power Systems Development-DOE NA 589
Steel City Erection & Crane Power Systems Development-DOE NA 223
Treco Construction Services Power Systems Development-DOE NA 5,458
Warren Environment, Inc. Power Systems Development-DOE NA 121
Westinghouse Electric Corp. Contract Engineering Serv. NA 190
One Hundred Twenty-Seven Other Items
(less than $100,000 paid to other
than Associate Cos.) Aggregate 369
-----
18,399
------
</TABLE>
(Continued on Page 27B)
<PAGE>
27B
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services
employed. If the aggregate amounts paid to any one
payee and included within one subaccount is less than
$100,000, only the aggregate number and amount of all
such payments included within the subaccount need be
shown. Provide a subtotal for each type of service.
<S> <C> <C> <C>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------ --------------- ------------ ------
Other Services
Acme Printing, Co. Publication Services NA 200
Adia Services, Inc. On-site Clerical Serv. NA 2,372
ADP Proxy Services Mailing Services NA 188
Aerotek, Inc. Radio Services NA 216
Alabama Power Company Contract Services A 9,330
Alabama Staff Contract Personnel Serv. NA 200
America's Registry, Inc. Systems Development NA 1,051
Andersen Consulting LLP Consulting Services NA 27,936
Anderson Lithograph Publication Services NA 700
Aon Consulting Consulting Services NA 121
Application Tech. Serv. System Consulting Services NA 454
Arko Executive Serv., Inc. Security Services NA 234
Arthur Andersen LLP Consulting Services NA 280
AT&T Project Services NA 200
Bowne of Atlanta, Inc. Mail Services NA 265
Cambio Networks, Inc. Contract Services NA 235
Charles River Assoc. Incor Environmental Study NA 265
Comdisco Disaster Recovery
Services Disaster Recovery Services NA 114
Comms People, Inc. Contract Services NA 452
Comprehensive Computer
Consulting Contract Consulting NA 5,054
Computer Associated
International Contract Services NA 319
Dataplex Corporation Microfiche Production NA 353
Deloitte&Touche Consulting Consulting Services NA 885
Dewey Ballantine Consulting Services NA 166
Drake Beam Morin, Inc. Personnel Services NA 475
(Continued on page 27C)
</TABLE>
<PAGE>
27C
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services
employed. If the aggregate amounts paid to any one
payee and included within one subaccount is less than
$100,000, only the aggregate number and amount of all
such payments included within the subaccount need be
shown. Provide a subtotal for each type of service.
<S> <C> <C> <C>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- -------------- ------------ ------
Electric Pwr. Research Inst. Industry Studies NA 806
Elrick & Lavidge, Inc. Survey Services NA 470
Engineering Planning &
Management Consulting Services NA 292
Ernst & Young Consulting Services NA 147
First Union National Bank Banking Services NA 437
Form Maker Software, Inc. Software Services NA 759
Georgia Power Company Project Support A 4,209
Gift Certificate Center Personnel Services NA 199
Griffith & Rogers Governmental Affairs NA 226
Gulf Power Company Project Support A 2,415
Hewitt Associates Personnel Services NA 3,879
Hogan & Hartson Consulting Services NA 122
Huthwaite, Inc. Consulting Services NA 100
Infodesign Group, Inc. Training Services NA 123
J. P. Morgan Securities,Inc. Financial Services NA 196
James W. Rock Consulting Services NA 103
Kercheval Engineers Microwave Consulting NA 211
Lehman Brothers Financial Services NA 129
Magi-Ware, Inc. Programming Services NA 107
Marketing & Planning Sys System Development NA 185
Merrill Lynch Asset
Management Financial Services NA 764
Merrill Lynch Trust Co. Financial Services NA 408
Merrill Lynch Pierce,
Fenner & Smith Financial Services NA 1,152
Microsoft Corp. Technology Planning Services NA 326
Mississippi Power Co. Project Support A 790
Moody's Investor Service Financial Services NA 156
New York Stock Exchange Financial Services NA 436
Paul Griffin & Assoc. Building Maintenance NA 111
Pony Express Courier Courier Services NA 100
Power Energy Services, Inc. Contract Engineering NA 237
Ray Bloch Productions, Inc. Production Services NA 628
Risk Advisory Risk Management Consulting NA 264
RR Donnelley Receivables,
Inc. Financial Services NA 114
Rust International Corp. Personnel Services NA 137
(Continued on page 27D)
</TABLE>
<PAGE>
27D
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
OUTSIDE SERVICES EMPLOYED
ACCOUNT 923
INSTRUCTIONS: Provide a breakdown by subaccount of outside services
employed. If the aggregate amounts paid to any one
payee and included within one subaccount is less than
$100,000, only the aggregate number and amount of all
such payments included within the subaccount need be
shown. Provide a subtotal for each type of service.
<S> <C> <C> <C>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
Savannah Electric & Power Project Support A 648
Sawyer & Associates, Inc. Contract Programming NA 152
Scott, Madden & Assoc., Inc. Personnel Services NA 554
Shoreline Utility Advisors,
Inc. Financial Services NA 209
Software Spectrum Software Upgrade Services NA 529
Southeast Power Corp. Construction Services NA 451
Southern Development &
Investment Group Project Support A 126
Southern Research Institute Consulting Services NA 151
Summit Communications, Inc. Consulting Services NA 104
Systems Applications Intl Consulting Services NA 400
TATA Consultancy Services Systems Support NA 1,097
Technology Partners, Inc. Consulting Services NA 264
Teknecon, Inc. Consulting Services NA 363
The Hawthorn Group Survey Services NA 267
The Smith-Free Group Consulting Services NA 191
Southern Company Financial Services A 122
Towers Perrin Consulting Services NA 517
TQS Research, Inc. Consulting Services NA 289
Wells Fargo Guard Services Security Services NA 544
Windham Brannon Load Research Activities NA 123
Xerox Corporation Facilities Management NA 1,121
120 Items Others Under $100,000 NA 9,555
--------
90,580
-------
115,690
=======
</TABLE>
<PAGE>
28
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
EMPLOYEE PENSIONS AND BENEFITS
ACCOUNT 926
INSTRUCTIONS: Provide a listing of each pension plan and benefit program
provided by the service company. Such listing should be
limited to $25,000.
DESCRIPTION AMOUNT
- ---------- ------
Pensions (437)
Early Retirement Benefits 764
Employees' Group Insurance 8,315
Post Retirement Medical Benefits 4,590
Post Retirement Life Benefits 2,050
Educational Assistance Plan 237
Minority Scholarship Program 53
Employee Savings Plan/ESOP - Company Contribution 6,223
Employee Health and Physical Examinations 107
Post Employment Benefits (53)
Other (Employees' Professional Fees and
Other Employee Fringe Benefits) 180
-----
TOTAL 22,029
======
<PAGE>
29
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
GENERAL ADVERTISING EXPENSES
ACCOUNT 930.1
INSTRUCTIONS: Provide a listing of the amount included in Account
930.1, "General Advertising Expenses", classifying
the items according to the nature of the advertising
and as defined in the account definition. If a
particular class includes an amount in excess of
$3,000 applicable to a single payee, show separately
the name of the payee and the aggregate amount
applicable thereto.
DESCRIPTION NAME OF PAYEE AMOUNT
- ------------ ------------- ------
NOT APPLICABLE
<PAGE>
30
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
MISCELLANEOUS GENERAL EXPENSES
ACCOUNT 930.2
INSTRUCTIONS: Provide a list of the amount included in Account 930.2,
"Miscellaneous General Expenses", classifying the items
according to their nature. Payments and expenses permitted
by Section 321 (b) (2) of the Federal Election Campaign Act,
as amended by Public Law 94-284 in 1976 (2 U.S.C.S. 441 (b)
(2) shall be separately classified.
DESCRIPTION AMOUNT
- ----------- ------
Employee Training 7,734
Expenses of SCS Employees Located at Operating Co. 6,316
Meals, Lodging, & Incidentals Related to
Meetings & Conferences 3,626
Dues and Memberships 937
Recruiting, Interviewing, & Placement
of Employees 282
Corporate Moving Expenses 88
Other General Expenses 1,713
------
TOTAL 20,696
======
<PAGE>
31
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
RENTS
ACCOUNT 931
INSTRUCTIONS: Provide a listing of the amount included in Account 931,
"Rents", classifying such expenses by major groupings of
property, as defined in the account definition of the Uniform
System of Accounts.
DESCRIPTION AMOUNT
- ----------- ------
Office Rents 14,995
Computer and Other Data Processing Equipment Rental 4,451
Software Rental 2,721
All Other (Automobile, Office Furniture & Equipment,
and Miscellaneous Storage & Equipment Rental) 1,087
------
TOTAL 23,254
======
<PAGE>
32
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
TAXES OTHER THAN INCOME TAXES
ACCOUNT 408
INSTRUCTIONS: Provide an analysis of Account 408, "Taxes Other Than Income
Taxes". Separate the analysis into two groups: (1) other
than U.S. Government taxes, and (2) U.S. Government taxes.
Specify each of the various kinds of taxes and show the
amounts thereof. Provide a subtotal for each class of tax.
KIND OF TAX AMOUNT
- ----------- -----
Other Than U.S. Government Taxes
State Unemployment 101
City/Business License Tax 15
Property and Other City and State 1,465
-------
Subtotal - Other 1,581
-------
U.S. Government Taxes
Federal Insurance Contributions Act 13,395
Federal Unemployment 200
------
Subtotal - U.S. Government 13,595
------
TOTAL 15,176
======
<PAGE>
33
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000
may be shown in lieu of details.
<S> <C> <C>
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- ----------------- ------------------- ------
280 Shades Creek Project Civic & Charitable 15
Alabama, University of Employee Matching Gift 12
American Heart Association Civic & Charitable 3
American Legislative Exchange Support of Program 14
Atlanta Chamber Foundation Civic & Charitable 50
Atlanta Classic Foundation Civic & Charitable 7
Auburn University Foundation Employee Matching Gift 5
Boy Scouts of America Civic & Charitable 9
Business Institute for Political
Analysis Support of Program 5
Cahaba Girl Scout Council Civic & Charitable 17
Callanwolde Fine Arts Center Civic & Charitable 5
Center for Legislative Energy &
Environmental Research Support of Program 8
Center Street Middle School Civic & Charitable 4
City Stages - Birmingham Festival Civic & Charitable 5
Eisenhower Center Building Fund Civic & Charitable 115
Georgia Center for Advanced
Telecommunications Civic & Charitable 3
Georgia Institute of Technology Employee Matching Gift 16
Georgia Youth Science & Technology Center Civic & Charitable 15
Hayes, Domenici & Associates Civic & Charitable 55
Index Research & Advisory Services Civic & Charitable 63
Junior Achievement of Greater B'Ham Civic & Charitable 4
Juvenile Diabetes Foundation Civic & Charitable 25
Kennedy Center for Performing Arts Civic & Charitable 5
Literacy Council of Central Alabama Civic & Charitable 5
March of Dimes Civic & Charitable 21
Metropolitan Development Board Civic & Charitable 10
</TABLE>
<PAGE>
33A
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
DONATIONS
ACCOUNT 426.1
INSTRUCTIONS: Provide a listing of the amount included in Account 426.1,
"Donations", classifying such expenses by its purpose. The
aggregate number and amount of all items of less than $3,000
may be shown in lieu of details.
<S> <C> <C>
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- ------------------ ------------------- -----
National Wild Turkey Federation Civic & Charitable 5
Public Affairs Council Civic & Charitable 3
Republican Senate/House Dinner
Building Fund Support of Program 40
Smithsonian Institution Civic & Charitable 8
Southern Governor's Association Support of Program 5
Taste of the South Support of Program 10
The Coalition Support of Program 50
The College Fund/UNCF Civic & Charitable 4
The King Center Civic & Charitable 4
The National Coal Council Support of Program 11
The Nature Conservancy Civic & Charitable 15
The Progress & Freedom Foundation Civic & Charitable 60
United States Energy Association Support of Program 3
United Way Civic & Charitable 194
Washington Legal Foundation Civic & Charitable 5
Woodruff Arts Center Civic & Charitable 10
57 Other Items (Less than $3,000) Civic & Charitable 54
74 Other Items (Less than $3,000) Employee Matching Gift 31
5 Other Items (Less than $3,000) Support of Program 6
-----
TOTAL 1,014
======
</TABLE>
<PAGE>
34
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
OTHER DEDUCTIONS
ACCOUNT 426.5
INSTRUCTIONS: Provide a listing of the amount included in Account 426.5,
"Other Deductions", classifying such expenses according to
their nature.
DESCRIPTION NAME OF PAYEE AMOUNT
- ----------- ------------- ------
NOT APPLICABLE
<PAGE>
35
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XVIII
NOTES TO STATEMENT OF INCOME
INSTRUCTIONS: The space below is provided for important notes
regarding the statement of income or any account
thereof. Furnish particulars as to any significant
increase in services rendered or expenses incurred
during the year. Notes relating to financial
statements shown elsewhere in this report may be
indicated here by reference.
See Notes to Financial Statements on Pages 19 - 19G.
<PAGE>
36
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
(Thousands of Dollars)
SCHEDULE XIX
FINANCIAL DATA SCHEDULE
Net Service Company Property 124,487
Total Investments 3,925
Total Current and Accrued Assets 139,686
Total Deferred Debits 6,851
Balancing Amount for Total Assets and Other Debits -
Total Assets and Other Debits 274,949
Total Proprietary Capital 875
Total Long-Term Debt 47,658
Notes Payable 15,792
Notes Payable to Associate Companies -
Balancing Amount for Total Current and Accrued
Liabilities 132,051
Total Deferred Credits 78,573
Accumulated Deferred Income Tax Credits -
Total Liabilities and Proprietary Capital 274,949
Services Rendered to Associate Companies 506,928
Services Rendered to Nonassociate Companies 31,893
Miscellaneous Income or Loss 3,179
Total Income 542,000
Salaries and Wages 230,023
Employee Pensions and Benefits 22,029
Balancing Amount for Total Expenses 289,948
Total Expenses 542,000
Net Income (Loss) -
Total Cost of Service (Direct Costs) 417,270
Total Cost of Service (Indirect Costs) 114,958
Total Cost of Service (Total) 538,821
Number of Personnel End of Year 2,758
<PAGE>
37
<TABLE>
<CAPTION>
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
ORGANIZATION CHART
Chairman, President & CEO
Southern Company
President & CEO
Southern Co. Serv.
<S> <C> <C> <C> <C> <C>
VP -Human Sr. VP- Director Exec. VP-
Sr. Exec. VP- Sr. VP- Resources(1) External Internal Finance(2)
Chief Production System Trans. Affairs(2) Auditing(1)
Planning & Oper
Exec. VP Sr. VP- VP Corp. VP-Fin.
Engineering Chief Information Communications(1) Planning
Officer
VP Research & VP-Governmental Treasurer
Environmental Sr. VP- Affairs
Affairs So. Wholesale Director
Energy VP-Enviro. Short-Term
VP Procurement Policy Finance
& Materials VP Marketing
& New Business VP-Secretary Director
VP Fuel Development & House Risk
Services Counsel Management
VP-Comptroller
Director & CFO
System Planning
</TABLE>
(1) Report to the President & CEO of SCS for SES related matters only.
(2) Direct reports to Chairman, President & CEO of Southern Company.
<PAGE>
38
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
METHODS OF ALLOCATION
The allocation statistics for each of the methods described below were
calculated using a three-year rolling average with a one-year lag in
implementation; i.e., the 1996 ratios used the average annual statistics
for the years 1992, 1993, and 1994.
1. Annual Operating Area Territorial Load Basis
Each Client Operating Company, other than Southern Electric
Generating Company (SEGCO), will be charged that percentage of the
total Service Company charges to be distributed by this method which
its annual operating area territorial load is of the total annual
operating area territorial load of the Southern electric system,
defined as total energy generated plus energy received minus energy
deliveries to exclude loads and include all Southeastern Power
Administration (SEPA) Preference Customer loads (exclusive of the
direct SEPA-Crisp County component), as well as loads served jointly
by Georgia Power Company and Oglethorpe Electric Membership
Corporation, Municipal Electric Association of Georgia (MEAG), and
City of Dalton through the aforesaid companies joint ownership of
generating facilities with Georgia Power Company. The MEAG component
includes any component for Crisp County under the provisions of the
MEAG-Crisp County Agreement. Excluded areas are such as those of
South Mississippi Electric Power Association, Alabama Electric
Cooperative, Tennessee Valley Authority, Florida Power Corporation,
etc.
2. Customer Basis
Each Client Operating Company, other than SEGCO, will be charged
that percentage of the total Service Company charges to be
distributed by this method which its average number of customers is
to the total average number of customers of the Southern electric
system, other than SEGCO.
3. Employee Basis
Each Client Company, other than SEGCO, will be charged that
percentage of the total Service Company charges to be distributed by
this method which its average number of employees is of the total
average number of employees of all Client Companies, other than
SEGCO.
4. Direct Billing Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
applicable Service Company direct billings is to the total Service
Company direct billings.
<PAGE>
38A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
METHODS OF ALLOCATION
5. Financial Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
average of the percentages of net fixed assets, operating expenses
and operating revenue sources is to the total Client Company net
fixed assets, operating expenses and operating revenue of the
Southern electric system.
6. Fossil Fuel Generation Basis
Each Client Operating Company will be charged that percentage of the
total Service Company charges to be distributed by this method which
its generation from fossil fuel sources is to the total generation
from fossil fuel sources of the Southern electric system.
7. Fossil and Hydro Capacity Basis
Each Client Company will be charged the factor determined by
dividing the total fossil and hydro generating capacity for each
company, including capacity attributed to joint owners of system
plants, by the total fossil and hydro generating capacity for the
Southern electric system.
8. Insurance Premium Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
applicable insurance premiums is to the total applicable insurance
premiums of the Southern electric system.
9. Net Fixed Assets Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
net fixed assets is to the total net fixed assets of the Southern
electric system.
10. Number of Nuclear Plants
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
number of nuclear plants is to the total nuclear plants.
11. Number of Vehicles Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
number of vehicles is to the total vehicles for the Southern
electric system.
<PAGE>
38B
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
METHODS OF ALLOCATION
12. Nuclear Plant Capacity Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
name plate kilowatt capacity of nuclear plants is to the total
kilowatt capacity of all nuclear plants.
13. Nuclear Plant Generation Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
net generation of nuclear plants is to the total net generation of
all nuclear plants.
14. Preferred Stockholder Basis
Each Client Company will be charged that percentage of the total
Service Company charges to be distributed by this method which its
number of preferred stockholders is to the total preferred
stockholders for the Southern electric system.
15. Salary Basis
The ratio of all applicable work orders for the appropriate
division, department, groups of departments or other cost centers
that incur salary charges per month. The larger the amount of salary
charges to a direct work order, the larger the amount that work
order will receive in the allocation.
16. Southern System Basis
This method will be applicable only to charges for services which
relate to Southern and other Client Companies. Each Client Company
will be charged for the charges to be distributed by this method in
the ratio of such Client Company's total capitalization to the sum
of the total capitalization of all Client Operating Companies.
17. System Aircraft
Passengers on system aircraft are charged a rate based on
comparable, non-discounted commercial fares for the itinerary
flown. Residual expenses not billed to client companies through the
commercial fares are allocated to all associate companies as an
availability fee based on the number of executives at each company.
<PAGE>
39
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
ANNUAL STATEMENT OF COMPENSATION FOR USE OF CAPITAL BILLED
The following annual statement was supplied to each associate client company
regarding interest billed for compensation of equity capital and borrowed
capital in 1996:
Pursuant to the amended Uniform System of Accounts for Mutual and Subsidiary
Service Companies implemented in January 1980, Southern Company Services is
required to submit an annual statement to its associate client companies stating
the amount and calculation of interest billed for compensation of equity capital
and borrowed capital. Southern Company Services does not bill its associate
client companies for compensation of equity capital.
In 1996, Southern Company Services initiated short-term borrowings exclusively
from The Southern Company; other outside banking institutions were not used. The
interest rates on these borrowings ranged from 5.331% to 6.300%. Interest in the
amount of $230,646.36 was accrued on The Southern Company and was billed to the
client companies. The interest was distributed to each company either on the
appropriate fixed percentage allocation basis or on the salary allocation basis
in accordance with the SEC orders and our service contracts.
In addition, as of December 31, 1996, Southern Company Services had long-term
debt outstanding from various institutions in the amounts of $63,449,564.65. The
interest rates on these borrowings ranged from 4.62% to 13.0%. Interest of
$6,361,435.73 was accrued and billed to the client companies. The interest was
distributed to each company either on the appropriate fixed percentage
allocation basis or on the salary allocation basis in accordance with the SEC
orders and service contracts.
The interest on total service company indebtedness was billed to the associate
and nonassociate companies as follows:
The Southern Company $ 177,232.51
Alabama Power Company 1,683,545.28
Georgia Power Company 3,111,032.15
Gulf Power Company 352,921.20
Mississippi Power Company 357,475.32
Savannah Electric & Power Company 128,809.89
Southern Electric Generating Company 10,180.13
Southern Electric International, Inc. 135,644.49
Southern Nuclear Operating Company 433,561.40
Southern Development & Investment
Group, Inc.91,517.32
Southern Communications Services, Inc. 87,301.37
Southern Electric Railroad Company 868.78
Southern Telecommunications Holding Co. 369.47
Southern Information Holding Co. 47.69
Nonassociate 21,575.09
-------------
$6,592,082.09
=============
<PAGE>
40
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1996
SIGNATURE CLAUSE
Pursuant to the requirements of the Public
Utility Holding Company Act of 1935 and the rules and
regulations of the Securities and Exchange Commission
issued thereunder, the undersigned company has duly
caused this report to be signed on its behalf by the
undersigned officer thereunto duly authorized.
Southern Company Services, Inc.
(Name of Reporting Company)
By:
(Signature of Signing Officer)
/s/ W. Dean Hudson
W. Dean Hudson, Vice President, Comptroller
and Chief Financial Officer
(Printed Name and Title of Signing Officer)
Date: April 28, 1997
<PAGE>
