Form U-13-60
Mutual and Subsidiary Service Companies
Revised February 7, 1980
ANNUAL REPORT
For The Period
Beginning January 1, 1999 and Ending December 31, 1999
--------------- -----------------
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
241 Ralph McGill Blvd., NE
Atlanta, Georgia 30308-3374
Name, title, and address of officer to whom correspondence concerning
this report should be addressed:
Senior Vice 241 Ralph McGill Blvd., NE
W. Dean Hudson Pres.,Comptroller Atlanta, Georgia 30308-3374
(Name) and Chief (Address)
Financial 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>
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
-------------------------
SERVICE COMPANY PROPERTY Schedule II 5
ACCUMULATED PROVISION FOR DEPRECIATION
AND AMORTIZATION OF SERVICE COMPANY
PROPERTY Schedule III 6
INVESTMENTS Schedule IV 7
ACCOUNTS RECEIVABLE FROM ASSOCIATE
COMPANIES Schedule V 8
FUEL STOCK EXPENSES UNDISTRIBUTED Schedule VI 9
STORES EXPENSE UNDISTRIBUTED Schedule VII 10
MISCELLANEOUS CURRENT AND ACCRUED
ASSETS Schedule VIII 11
MISCELLANEOUS DEFERRED DEBITS Schedule IX 12
RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES Schedule X 13
PROPRIETARY CAPITAL Schedule XI 14
LONG-TERM DEBT Schedule XII 15
CURRENT AND ACCRUED LIABILITIES Schedule XIII 16
NOTES TO FINANCIAL STATEMENTS Schedule XIV 17
COMPARATIVE INCOME STATEMENT Schedule XV 18
----------------------------
ANALYSIS OF BILLING - ASSOCIATE
COMPANIES Account 457 19
ANALYSIS OF BILLING - NONASSOCIATE
COMPANIES Account 458 20
ANALYSIS OF CHARGES FOR SERVICE - ASSOCIATE
AND NONASSOCIATE COMPANIES Schedule XVI 21
<PAGE>
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 22
DEPARTMENTAL ANALYSIS OF SALARIES Account 920 23
OUTSIDE SERVICES EMPLOYED Account 923 24
EMPLOYEE PENSIONS AND BENEFITS Account 926 25
GENERAL ADVERTISING EXPENSES Account 930.1 26
MISCELLANEOUS GENERAL EXPENSES Account 930.2 27
RENTS Account 931 28
TAXES OTHER THAN INCOME TAXES Account 408 29
DONATIONS Account 426.1 30
OTHER DEDUCTIONS Account 426.5 31
NOTES TO STATEMENT OF INCOME Schedule XVIII 32
FINANCIAL DATA SCHEDULE Schedule XIX 33
ORGANIZATION CHART 34
------------------
METHODS OF ALLOCATION 35
---------------------
ANNUAL STATEMENT OF COMPENSATION FOR USE
OF CAPITAL BILLED 36
-----------------
<PAGE>
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
- ------- ----------------------- -----------------
CURRENT PRIOR
------- -----
SERVICE COMPANY PROPERTY
------------------------
101 Service company property (Schedule II) 258,843 250,657
107 Construction work in progress (Schedule II) - 98
------- -------
Total Property 258,843 250,755
------- -------
108 Less accumulated provision for depreciation
and amortization of service company
property (Schedule III) 125,810 141,287
------- -------
Net Service Company Property 133,033 109,468
------- -------
INVESTMENTS
-----------
123 Investments in associate companies (Schedule IV) - -
124 Other investments (Schedule IV) 1,936 2,354
------- -------
Total Investments 1,936 2,354
------- -------
CURRENT AND ACCRUED ASSETS
--------------------------
131 Cash - -
134 Special deposits - -
135 Working funds - 4
136 Temporary cash investments (Schedule IV) - 1,100
141 Notes receivable - -
143 Accounts receivable 27,176 28,762
146 Accounts receivable from associate
companies (Schedule V) 119,390 144,467
152 Fuel stock expenses undistributed (Schedule VI) - -
154 Materials and supplies 2,645 2,414
163 Stores expense undistributed (Schedule VII) - -
165 Prepayments 16,088 8,539
(Schedule VIII) - 81
------- -------
Total Current and Accrued Assets 165,299 185,367
------- -------
DEFERRED DEBITS
---------------
181 Unamortized debt expense 282 -
184 Clearing accounts 140 166
186 Miscellaneous deferred debits (Schedule IX) 11,410 15,306
188 Research, development, or demonstration
expenditures (Schedule X) - -
190 Accumulated deferred income taxes - -
------- ------
Total Deferred Debits 11,832 15,472
------- -------
TOTAL ASSETS AND OTHER DEBITS 312,100 312,661
======= =======
<PAGE>
4A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
(Thousands of Dollars)
SCHEDULE I - COMPARATIVE BALANCE SHEET (CONTINUED)
--------------------------------------
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) 47,068 33,295
225 Unamortized premium on long-term debt - -
226 Unamortized discount on long-term debt-debit - -
------- -------
Total Long-Term Debt 47,068 33,295
------- -------
CURRENT AND ACCRUED LIABILITIES
----------------------------------
231 Notes payable 6,532 2,726
232 Accounts payable 19,491 68,808
233 Notes payable to associated companies
(Schedule XIII) 17,000 -
234 Accounts payable to associate companies
(Schedule XIII) 13,189 32,754
236 Taxes accrued 2,461 1,103
237 Interest accrued 217 -
238 Dividends declared - -
241 Tax collections payable 10,274 1,850
242 Miscellaneous current and accrued
liabilities (Schedule XIII) 91,676 84,716
------- --------
Total Current and Accrued Liabilities 160,840 191,957
------- --------
DEFERRED CREDITS
-------------------
253 Other deferred credits 103,317 86,534
255 Accumulated deferred investment tax credits - -
------- -------
Total Deferred Credits 103,317 86,534
------- -------
282 ACCUMULATED DEFERRED INCOME TAXES - -
--------------------------------- ------- -----
TOTAL LIABILITIES AND PROPRIETARY
CAPITAL 312,100 312,661
======= =======
<PAGE>
<TABLE>
<CAPTION>
5
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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
- ------
<S> <C> <C> <C> <C> <C>
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT - - - - -
304 LAND & LAND RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS 42,165 - (40,062) - 2,103
306 LEASEHOLD
IMPROVEMENTS 8,855 7,604 (1,042) - 15,417
307 EQUIPMENT 2/ 101,124 8,426 (2,302) (266) 106,982
-
308 OFFICE FURNITURE
AND EQUIPMENT 2/ 28,071 1,918 (5,973) (472) 23,544
-
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT 2/ 781 5 (36) 21 771
-
310 AIRCRAFT AND
AIRPORT EQUIPMENT 2/ 27,579 43,456 (5,952) (6) 65,077
-
311 OTHER SERVICE COMPANY
PROPERTY 2/ 3/ 42,082 3,739 (878) 6 44,949
- - ------- ------- -------- ------- -------
SUB-TOTAL 250,657 65,148 (56,245) (717) 258,843
------- ------- -------- -------- -------
107 CONSTRUCTION WORK
IN PROGRESS 4/ 98 - - (98) -
- ------- ------- ------- ------- -----
TOTAL 250,755 65,148 (56,245) (815) 258,843
======= ======= ======== ======= =======
</TABLE>
1/ PROVIDE AN EXPLANATION OF THOSE CHANGES CONSIDERED MATERIAL:
- -
Other changes amount of (716,351) include reclasses and adjustments to prior
year assets. Prior year CWIP balance of 97,840.79 place in service 8/99 included
in additions.
(Denotes red figure.)
<PAGE>
5A
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. 1,328 5,026
307/04 Personal Computer Equip. 6,126 56,849
307/05 Computer Equipment 303 24,517
307/11 Telephone Systems 664 10,459
307/12 Telecommunications Equip. 5 10,131
308/01 Furniture & Fixtures 1,381 12,623
308/09 Data Handling Equipment
& Miscellaneous 537 10,921
309/08 Autos, Trucks & Trailers 5 771
310/07 Aircraft 43,456 65,077
311/10 Software 3,739 43,278
311/13 Coal Pilot Scale Combustion
Facility - 1,671
------ -------
TOTAL 57,544 241,323
====== =======
3/ DESCRIBE OTHER SERVICE COMPANY PROPERTY:
- -
1. Purchased computer software and software licenses.
2. Pulverized coal pilot scale combustion facility.
4/ DESCRIBE CONSTRUCTION WORK IN PROGRESS:
- -
None @ 12/31/99
<PAGE>
6
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(Thousands of Dollars)
SCHEDULE III
------------
<TABLE>
<CAPTION>
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) YEAR
----------- --------- --------- ----------- -------- --------
Account
- -------
<S> <C> <C> <C> <C> <C>
301 ORGANIZATION - - - - -
303 MISCELLANEOUS
INTANGIBLE PLANT - - - - -
304 LAND & LAND RIGHTS - - - - -
305 STRUCTURES AND
IMPROVEMENTS 27,756 2,001 (28,610) - 1,147
306 LEASEHOLD
IMPROVEMENTS 3,575 1,028 (217) - 4,386
307 EQUIPMENT 67,166 9,412 (1,779) - 74,799
308 OFFICE FURNITURE
AND FIXTURES 17,118 1,809 (3,239) - 15,688
309 AUTOMOBILES, OTHER
VEHICLES AND
RELATED GARAGE
EQUIPMENT 682 59 (33) - 708
310 AIRCRAFT AND
AIRPORT EQUIPMENT 11,221 1,788 (2,976) - 10,033
311 OTHER SERVICE
COMPANY PROPERTY 13,769 5,814 (534) - 19,049
------- ------ ------- ------ -------
TOTAL 141,287 21,911 (37,388) - 125,810
======= ====== ======= ====== =======
</TABLE>
( ) Denotes red figure.
<PAGE>
7
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- ---------- ------
ACCOUNT 123 - INVESTMENT IN ASSOCIATE
COMPANIES - -
ACCOUNT 124 - OTHER INVESTMENTS
Employee Merchandise Loans - -
Employee Energy Loans 1,666 1,323
ACE Limited - Reserve 69 69
Employee Computer Loans 619 544
------ ------
Subtotal 2,354 1,936
ACCOUNT 136 - TEMPORARY CASH INVESTMENTS 1,100 -
------ ------
TOTAL 3,454 1,936
====== ======
<PAGE>
8
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- --------- ---------
ACCOUNT 146 - ACCOUNTS RECEIVABLE FROM ASSOCIATE COMPANIES
The Southern Company 3,003 7,502
Alabama Power Company 38,099 29,408
Georgia Power Company 58,587 41,384
Gulf Power Company 7,486 6,601
Mississippi Power Company 10,050 11,005
Savannah Electric and Power Company 4,992 3,943
Southern Communications Services, Inc. 2,624 2,419
Southern Company Energy Solutions, Inc. 2,766 1,144
Southern Electric Generating Company 598 826
Southern Electric Railroad Company 254 383
Southern Energy, Inc. 2,192 3,169
Southern Information Holding Company 2 2
Southern Nuclear Operating Company, Inc. 13,591 10,997
Southern Telecom, Inc. 223 607
------- -------
TOTAL 144,467 119,390
======= =======
ANALYSIS OF CONVENIENCE OR ACCOMMODATION PAYMENTS: TOTAL
PAYMENTS
--------
The Southern Company 565
Alabama Power Company 196,192
Georgia Power Company 336,773
Gulf Power Company 41,643
Mississippi Power Company 60,981
Savannah Electric and Power Company 52,416
Southern Communications Services, Inc. 10,333
Southern Company Energy Marketing 16,320
Southern Company Energy Solutions, Inc. 6,992
Southern Electric Generating Company 227
Southern Electric Railroad Company -
Southern Energy, Inc. 46,999
Southern Nuclear Operating Company, Inc. 112,983
-------
The major portion of the above expenses consists of Integrated System Power Pool
transactions, transactions relating to the System Pension Plan, transactions
relating to the Employee Savings Plan, transactions relating to third party
payroll payments, and transactions relating to the Employee Stock Ownership
Plan.
TOTAL PAYMENTS 882,424
=======
<PAGE>
9
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
DESCRIPTION LABOR EXPENSES TOTAL
----------- ----- ------- -----
ACCOUNT 152 - FUEL STOCK EXPENSES
UNDISTRIBUTED 5,703 4,624 10,327
Total amount billed during current
year as follows:
Associated Companies
The Southern Company (1) - (1)
Alabama Power Company (1,647) (1,399) (3,046)
Georgia Power Company (2,412) (1,975) (4,387)
Gulf Power Company (592) (453) (1,045)
Mississippi Power Company (472) (370) (842)
Savannah Electric and Power Company (229) (161) (390)
Southern Company Energy Solutions Inc. (3) (2) (5)
Southern Electric Generating Company (155) (135) (290)
Southern Electric Railroad Company - - -
Southern Energy, Inc. (192) (129) (321)
Southern Nuclear Operating Company, Inc. - - -
------ ------ -------
Subtotal (5,703) (4,624) (10,327)
------ ------ -------
Nonassociated Companies - - -
TOTAL 0 0 0
====== ====== =======
SUMMARY: Fuel services performed by the service company consist 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.
<PAGE>
10
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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>
11
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 6 -
Accounts Payable Suspense 75 -
----- ---
Total 81 -
===== ===
<PAGE>
12
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 YEAR YEAR
----------- ------- ---------
ACCOUNT 186 - MISCELLANEOUS DEFERRED DEBITS
Deferred Payroll Charge 8,181 8,852
Deposit for Georgia Sales and Use Tax 25 25
Wilsonville Clean-up 1,905 22
Executive Stock Option Taxes 5 -
Retire Capital Items 184 185
Unamortized Leasehold - Bldg. 66 2,146 -
Unamortized Leasehold - Bldg. 64 1,853 -
Unamortized Leasehold - Inverness 416 320
Sundry Delayed Clearance 591 2,006
------- -------
Total 15,306 11,410
======= =======
<PAGE>
13
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(Thousands of Dollars)
SCHEDULE X
-----------
RESEARCH, DEVELOPMENT OR DEMONSTRATION EXPENDITURES
---------------------------------------------------
INSTRUCTIONS: Provide a description of each material research, development, or
demonstration project that incurred costs by the service
corporation during the year.
DESCRIPTION AMOUNT
----------- ------
ACCOUNT 188 - RESEARCH, DEVELOPMENT, OR DEMONSTRATION
EXPENDITURES 31,890
Total amount billed/incurred during current year as follows:
Government Projects:
Clean Coal Technology Projects:
Hammond Wall Fired Project (15)
Other Government Projects:
PSDF/Hot Gas Cleanup Project (21,361)
Switchgrass Demonstration (SRI/DOE) (9)
Liquefaction (17)
EPRI Projects:
Time Limited Aging Analysis (80)
GNOCIS Demonstration (16)
RE&A EPRI Contracts (239)
Advanced End-Use Technologies (229)
Engineering EPRI Projects (336)
EPRI Bulk Trans. System Reliability (303)
Associate Companies:
End-Use Research Projects (2,012)
Pwr Delivery Research-Overhead Transmission (625)
Pwr Delivery Research-Transmission Substations (499)
Pwr Delivery Research-Distribution (709)
Air Quality Studies (138)
Combustion & Fuel Effects (762)
Research Administration (492)
Flue Gas Treatment (349)
Power Delivery Research (20)
Advanced End-Use Technology Research (1,188)
Particulate Control Studies (473)
Advanced Energy Systems (1,327)
Thermal & Fluid Sciences (625)
R&D Tech Econ Assessments (66)
--------
TOTAL AMOUNT BILLED/INCURRED (31,890)
--------
TOTAL 0
========
<PAGE>
14
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 that 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>
15
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
SCHEDULE XII - LONG-TERM DEBT
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.
<TABLE>
<CAPTION>
TERMS OF OBLIG DATE BALANCE AT BALANCE At
CLASS & SERIES OF INTEREST AMOUNT BEGINNING 1/ CLOSE
NAME OF CREDITOR OF OBLIGATION MATURITY RATE AUTHORIZED OF YEAR ADDITIONS DEDUCTIONS OF YEAR
- ---------------- -------------- -------- -------- ---------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ACCOUNT 223 - ADVANCES FROM ASSOCIATE
COMPANIES:
NOT APPLICABLE
ACCOUNT 224 - OTHER LONG-TERM DEBT:
NOTES PAYABLE
Merrill Lynch & Co. 12/15/2009 7.625 40,000 - 40,000 - 40,000
Equity Office Properties 12/01/2005 7.25 13,600 - 13,600 6,532 7,068
------- ------ ------ ------ ------
Subtotal 53,600 - 53,600 6,532 47,068
------- ------ ------ ------ ------
CAPITAL LEASE OBLIGATION
Equity Office Properties 02/01/2011 9.25 7,225 5,015 - 5,015 -
Equity Office Properties 02/01/2006 13.00 41,451 28,280 - 28,280 -
------- ------ ------ ------ ------
Subtotal 48,676 33,295 - 33,295 -
------- ------ ------ ------ ------
TOTAL 102,276 33,295 53,600 39,827 47,068
======= ====== ====== ====== ======
1/ GIVE AN EXPLANATION OF DEDUCTIONS: Equity Office Properties (Notes Payable) - Deductions of $6,532,087.13 transferred to
current maturities.
Equity Office Properties (Capital Lease) - Deductions of $33,294,657.49 transferred to
current maturities.
</TABLE>
<PAGE>
16
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 - 17,000
----- ------
TOTAL - 17,000
===== ======
ACCOUNT 234 - ACCOUNTS PAYABLE TO ASSOCIATE COMPANIES
The Southern Company 5 -
Alabama Power Company 22,458 4,813
Georgia Power Company 6,185 1,536
Gulf Power Company 2,958 6,013
Mississippi Power Company 151 206
Savannah Electric and Power Company 326 26
Southern Communications Services, Inc. 142 500
Southern Nuclear Operating Company, Inc. 467 33
Southern Company Energy Solutions, Inc. 62 62
------ ------
TOTAL 32,754 13,189
====== ======
ACCOUNT 242 - MISCELLANEOUS CURRENT AND ACCRUED LIABILITIES
Incentive Pay (PPP) 26,516 28,064
Vacation Clearing Account 17,605 17,915
Accrued Labor & Related Overheads 7,220 7,637
Employee Group Insurance Premiums - 1,200
Early Retirement Benefits 1,490 1,483
Productivity Improvement Program 20,924 22,903
Accumulated Provision for Major Overhaul
of Aircraft 1,090 1,809
Supplemental Pensions and Benefits 1,982 1,899
Department of Energy - -
Flex and Save Benefits 4,262 2,015
Post Employment Benefits 66 66
Severance Pay 2,589 2,749
Metro Life Advance-Current 256 296
Performance Dividend Plan 574 2,318
Employee Merchandise Withholding 19 23
(Continued on Page 16A)
<PAGE>
16A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(Thousands of Dollars)
SCHEDULE XIII - CURRENT AND ACCRUED LIABILITIES
(Continued)
BALANCE AT BALANCE AT
BEGINNING CLOSE OF
DESCRIPTION OF YEAR YEAR
----------- ---------- -------
Associate Companies - ESP - -
Commitment Fees - Credit Lines - -
Accrued Bank Fees - -
SCS - Employee Savings Plan - -
Special Transmission Studies - 158
SCS - U.S. Savings Bonds Withholdings 108 99
Funds Dist-Holders SE P&L Corp. 13 13
Employee Energy/PC Loan W/H - -
SCS-FLEX Benefits Premiums - 1,033
Miscellaneous (24 Beginning)(32 Ending) 2 (4)
------ ------
TOTAL 84,716 91,676
====== ======
<PAGE>
17
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
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 3 to 12 years). Leasehold
improvements are amortized over the lives of the respective leases.
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.
<PAGE>
17A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
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.
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), Southern Electric Generating
Company (an operating subsidiary owned equally by Alabama Power Company
and Georgia Power Company), Southern Energy, Inc. (a subsidiary of The
Southern Company which develops and manages electricity and other energy
related projects worldwide, including domestic energy trading and
marketing), Southern Company Energy Solutions, Inc. (a subsidiary of The
Southern Company which develops new business opportunities related to
energy products and services), Southern Nuclear Operating Company, Inc.
(a subsidiary of The Southern Company which provides services to
Southern Company's 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. (Southern LINC; a subsidiary of The Southern Company,
which provides digital wireless communications services to the operating
subsidiaries and the public in the southeast) 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, information resources,
marketing, auditing, 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.
3. RETIREMENT BENEFITS
The Company has a defined benefit, trusteed, pension plan that covers
substantially all employees. The Company provides certain medical 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. In 1998, the Company adopted Financial Accounting Standards
Board (FASB) Statement No. 132, Employers' Disclosure about Pensions and
Other Post-Retirement Benefits. The measurement date is September 30 for
each year.
<PAGE>
17B
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
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 Plans
Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows: (In Thousands)
Projected Benefit Obligations
-----------------------------
1999 1998
---------- -------
Balance at beginning of year 422,401 350,319
Service cost 15,191 12,939
Interest cost 28,079 25,800
Benefits paid (13,994) (13,192)
Actuarial (gain) loss (16,080) 46,535
------- -------
Balance at end of year 435,597 422,401
======= =======
Plan Assets
--------------------
1999 1998
---------- -------
Balance at beginning of year 592,025 557,333
Actual return on plan assets 90,990 3,052
Employer contributions - -
Benefits paid (13,994) (13,192)
Receivables/Payables due to
transfers 7,229 44,832
------- -------
Balance at end of year 676,250 592,025
======= =======
The accrued pension costs recognized in the Balance Sheets are as follows:
(In Thousands)
1999 1998
---------- -------
Funded status 240,653 169,624
Unrecognized transition obligation (8,808) (10,093)
Unrecognized prior service cost 10,583 11,454
Unrecognized net gain (231,104) (167,269)
Fourth quarter contributions - -
------- --------
Prepaid asset recognized in the
Balance Sheet 11,324 3,716
====== =====
<PAGE>
17C
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
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 plan's net periodic cost were as follows: (In Thousands)
1999 1998
---------- -------
Service cost 15,191 12,939
Interest cost 28,079 25,800
Expected return on plan assets (44,715) (38,676)
Recognized net gain (5,748) (5,599)
Net amortization (415) (415)
------- --------
Net pension income (7,608) (5,951)
======= ========
Post-retirement Benefits
Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows: (In Thousands)
Projected Benefit
-------------------------
1999 1998
---------- -------
Balance at beginning of year 101,754 85,163
Service cost 2,540 2,085
Interest cost 6,729 6,252
Benefits paid (2,516) (2,428)
Actuarial loss (13,876) 10,682
------- -------
Balance at end of year 94,631 101,754
======= =======
Plan Assets
--------------------
1999 1998
---------- -------
Balance at beginning of year 22,286 22,154
Actual return on plan assets 3,737 132
Employer contributions 2,516 2,428
Benefits paid (2,516) (2,428)
------- -------
Balance at end of year 26,023 22,286
======= =======
The accrued post-retirement costs recognized in the Balance Sheets are as
follows: (In Thousands)
1999 1998
---------- -------
Funded status (68,607) (79,468)
Unrecognized transition obligation 5,361 5,765
Unrecognized prior service cost (16) (17)
Unrecognized net gain 1,166 17,424
Fourth quarter contributions 743 363
------- -------
Accrued liability recognized in the
Balance Sheet (61,353) (55,933)
======= =======
<PAGE>
17D
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
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 plan's net periodic cost were as follows: (In Thousands)
1999 1998
---------- -------
Service cost 2,540 2,085
Interest cost 6,729 6,252
Expected return on plan assets (1,828) (1,654)
Recognized net gain 472 115
Net amortization 403 404
------- -------
Net post-retirement cost 8,316 7,202
======= =======
The weighted average rates assumed in the actuarial calculations for both the
pension plans and post-retirement benefits were:
1999 1998
---- ----
Discount 7.50% 6.75%
Annual salary increase 5.00% 4.25%
Long-term return on plan assets 8.50% 8.50%
An additional assumption used in measuring the accumulated
post-retirement benefit obligation was a weighted average medical care
cost trend rate of 7.74 percent for 1999 decreasing gradually to 5.50
percent through the year 2005 and remaining at that level thereafter. An
annual increase or decrease in the assumed medical care cost trend rate
of 1 percent would affect the accumulated benefit obligation and the
service and interest cost components at December 31, 1999 as follows:
(In Thousands)
1 Percent 1 Percent
Increase Decrease
Benefit obligation 5,704 (4,866)
Service and interest costs 530 (449)
Work Force Reduction Programs
The Company has incurred additional costs for work force reduction
programs. The costs related to these programs were $5 million, $2
million, and $7 million for 1999, 1998, and 1997, respectively. These
costs were charged to expense.
<PAGE>
17E
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
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. OPERATING LEASES
The Company has operating lease agreements with various terms and
expiration dates. Rental expense under all operating leases was
approximately $76,790,000, $65,769,000 and $49,931,000 in 1999, 1998
and 1997, respectively. Future minimum lease payments under
noncancelable operating leases at December 31, 1999 were as follows:
(In Thousands)
2000 42,519
2001 27,704
2002 17,068
2003 11,877
2004 11,059
Thereafter 21,322
-------
Total 131,549
=======
5. LONG-TERM DEBT AND NOTES PAYABLE - OTHER
Details of long-term debt and notes payable - other at December 31 are
as follows: (In Thousands)
1999 1998
------ -----
Notes Payable:
7.625% Due 2009 40,000 -
7.25% Due 2005 13,600 -
Less Current Maturities (6,532) -
------- -----
Long-Term Notes Payable 47,068 -
Capitalized lease obligations:
9.25% building lease - 5,260
13.00% building lease - 30,761
Less Current Maturities - (2,726)
------- -------
Long-Term Capital Leases - 33,295
------- -------
Total Long-Term Debt 47,068 33,295
======= =======
<PAGE>
17F
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
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.
In December 1999, Southern Company Services entered into a lease buyout
agreement with Equity Office Properties on long-term capital lease
obligations of Perimeter Center East. The amount agreed upon includes a
long-term Notes Payable in the amount of $8,200,000 which will be
amortized at 7.25% for six years, ending December 1, 2005.
On December 15, 1999, Southern Company Services, Inc. issued
$40,000,000 of Series A 7.625% Senior Notes to Merrill Lynch & Co. with
proceeds being used to repay short-term debt to Southern Company and
for various other corporate purposes. The entire principal will be due
and payable on December 15, 2009. The Southern Company has guaranteed
the principal and interest of the above.
Maturities over the next five years of the Company's long-term debt
outstanding at December 31, 1999 are as follows: (In Thousands)
2000 6,532
2001 1,217
2002 1,308
2003 1,406
2004 1,512
Thereafter 41,625
------
Total 53,600
======
Financial Instruments
The Company did not have financial instruments, in either 1998 or 1999,
which require disclosure in accordance with Statement of Financial
Accounting Standards No. 107, "Disclosure About Fair Value of Financial
Instruments."
6. PURCHASE COMMITMENTS
The Company has various purchase commitments. At December 31, 1999,
total capital expenditures are budgeted to be approximately $30,043,000
in 2000.
<PAGE>
18
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
SCHEDULE XV
STATEMENT OF INCOME
ACCOUNT DESCRIPTION CURRENT YEAR PRIOR YEAR
- ------- ----------- ------------ ----------
INCOME
457 Services rendered to associate companies 750,217 709,127
458 Services rendered to nonassociate
companies 32,835 35,515
421 Miscellaneous income or loss 15,692 8,339
------- -------
Total Income 798,744 752,981
------- -------
EXPENSE
920 Salaries and wages 286,325 262,950
921 Office supplies and expenses 101,312 104,037
922 Administrative expense transferred-
credit - -
923 Outside services employed 173,709 192,241
924 Property insurance 714 725
925 Injuries and damages 86 81
926 Employee pensions and benefits 26,291 22,830
928 Regulatory commission expense 123 143
930.1 General advertising expenses 15,615 -
930.2 Miscellaneous general expenses 37,827 33,212
931 Rents 76,790 65,769
932 Maintenance of structures and
equipment 29,351 31,897
403 Depreciation and amortization expense 21,911 15,847
408 Taxes other than income taxes 19,223 17,006
409 Income taxes 300 46
410 Provision for deferred income taxes - -
411 Provision for deferred income taxes -
credit - -
411.5 Investment tax credit - -
426.1 Donations 1,544 1,344
426.5 Other deductions - -
427 Interest on long-term debt 4,086 3,737
430 Interest on debt to associate companies 2,352 683
431 Other interest expense 1,185 433
------- -------
Total Expense 798,744 752,981
------- -------
Net Income - -
======= =======
<PAGE>
19
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
ANALYSIS OF BILLING
ASSOCIATE COMPANIES
ACCOUNT 457
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C>
The Southern Company 35,886 3,774 317 39,977
Alabama Power Company 171,329 39,135 2,138 212,602
Georgia Power Company 200,828 49,896 2,700 253,424
Gulf Power Company 33,922 7,956 411 42,289
Mississippi Power Company 35,377 8,880 454 44,711
Savannah Electric & Power Co. 12,107 3,433 181 15,721
Southern Communication
Services, Inc. 24,757 834 70 25,661
Southern Company Energy
Solutions, Inc. 8,067 2,851 120 11,038
Southern Electric Generating Co. 2,402 745 32 3,179
Southern Electric Railroad Company 555 185 7 747
Southern Energy, Inc. 14,428 4,479 236 19,143
Southern Nuclear Operating Co. 62,242 16,877 837 79,956
Southern Telecom, Inc. 1,294 458 17 1,769
------- ------- ----- -------
TOTAL 603,194 139,503 7,520 750,217
======= ======= ===== =======
</TABLE>
<PAGE>
20
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
ANALYSIS OF BILLING
-------------------
NONASSOCIATE COMPANIES
ACCOUNT 458
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C>
Department of Energy (DOE) $19,179 $2,176 $ 39 $21,394 $0 $21,394
DOE/Southern Research Institute 9 0 0 9 0 9
Electric Power Research Institute 908 271 24 1,203 0 1,203
APC Credit Union 39 0 0 39 0 39
Economic Development Partnership 8 0 0 8 0 8
Assoc. of Edison Illuminating Co. 6 0 0 6 0 6
Motorola 12 0 0 12 0 12
Gulf Power Credit Union 17 0 0 17 0 17
Energy Ins. - Bermuda 32 14 1 47 0 47
ALTEC Industries 12 0 0 12 0 12
AT & T 5 0 0 5 0 5
Southern Interexchange 22 0 0 22 0 22
MCI 14 0 0 14 0 14
Mercedes-Benz 8 0 0 8 0 8
Southern System Master Retirement Trust 646 0 0 646 0 646
Geothermal Heat Pump Consortium 85 4 1 90 0 90
Metro Atlanta Host Committee 2,156 120 18 2,294 0 2,294
Infocure 15 0 0 15 0 15
L. M. Berry 35 0 0 35 0 35
GEAC Computer System 428 0 0 428 0 428
Phillips Electronics 33 0 0 33 0 33
Crawford & Co. 123 0 0 123 0 123
GE Capital 325 0 0 325 0 325
SAGE 83 0 0 83 0 83
FP&L; JEA; Tallahassee, FPC (Unit Power
Sale - True-up) 69 50 6 125 0 125
FP&L; JEA, Tallahassee, FPC 1,881 0 0 1,881 0 1,881
Oglethorpe Power Corporation 3,609 0 0 3,609 0 3,609
Southeastern Electric Reliability
Council 15 0 0 15 0 15
Georgia Electric Marketing System Study 7 2 0 9 0 9
CP&L Study 25 9 1 35 0 35
Tenaska 13 0 0 13 0 13
</TABLE>
<PAGE>
20A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
ANALYSIS OF BILLING
-------------------
NONASSOCIATE COMPANIES
ACCOUNT 458 (CONTINUED)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
CP&L 12 5 1 18 0 18
Coral Power 4 2 0 6 0 6
Tenaska/AL 12 5 2 19 0 19
Mobile Energy Services 7 2 0 9 0 9
LPM System 4 2 0 6 0 6
MESCo 5 2 0 7 0 7
AEC 5 2 0 7 0 7
Alabama Electric Cooperative 24 2 2 28 0 28
Crisp County Power Commission 6 1 0 7 0 7
Municipal Electric Authority 32 2 2 36 0 36
Oglethorpe Power Corporation 70 6 3 79 0 79
South Mississippi Electric Power 14 1 1 16 0 16
Southeastern Electric Pwr. Administration 11 1 1 13 0 13
Other (25 items less than $5,000) 22 6 1 29 0 29
------- ------ ----- ------- --- -------
TOTAL $30,047 $2,685 $103 $32,835 $0 $32,835
======= ====== ==== ======= == =======
</TABLE>
INSTRUCTION: Provide a brief description of the services rendered to each
nonassociate company:
Department of Energy (DOE) - Contract services concerning clean coal
technology, Power System Development Facility/hot gas cleanup project.
Cleanup of Liquefaction project main site. Switchgrass Demonstration.
Electric Power Research Institute - Ltd. Aging Analysis; GNOCIS
demonstrations, ash in agriculture and land reclamation facility; NOX
reduction and performance; evaluation of fly ash; real time heat rate &
USABC; CFD Modeling, flywheel evaluation; MGP ROAM modeling; multimedia
diesel cleanup; electrokinetic remediation; phytoremediation of arsenic
contaminated soil; PCB soils treatment, and bulk transmission system
reliability evaluation.
APC Credit Union, Econ. Develop. Partnership, Edison Illuminating Co.,
Motorola, Gulf Credit Union, ALTEC Industries - Telecommunication
services.
Energy Insurance - Bermuda - GPC RMIS conversion project.
AT&T, Southern Interexchange, MCI - Telecommunication services related
to fiber optics.
Mercedes-Benz - Training and materials at Southern Company College.
Bankers Trust Company (Southern System Master Retirement Trust) -
Management and administration of Pension Fund for the Southern Company.
Geothermal Heat Pump Consortium - Marketing Services and Marketing
Research.
Metro Atlanta Host Committee - Planning committee for Super Bowl 2000.
Infocure, L.M. Berry, GEAC Computer Systems, Phillips Electronics,
Crawford & Co., GE Capital, SAGE - O&M sublease expenses at Perimeter
Center East buildings.
FP&L, FPC, JEA, and City of Tallahassee - Unit Power Sales (UPS)
true-up and scheduling agreements.
Oglethorpe Power - Transmission Planning Operations (TPO) scheduling
fees and SERC security coordinator.
Southeastern Electric Reliability Council - Occupancy,
telecommunications and other related services.
Georgia Electric Marketing, CP&L, Tenaska, Coral Power, Tenaska/AL,
Mobile Energy Svs, LPM, MESCo, AEC - Transmission impact and
interconnection studies.
Ala. Electric Coop, Crisp County Pwr. Com., MEAG, OPC, S. Miss Elec
Pwr., SEPA - Southeastern Electric Reliability Council (SERC) security
coordinator.
<PAGE>
21
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
INSTRUCTION: Total cost of service will equal for associate and nonassociate
companies the total amount billed under their separate analysis
of billing schedules.
<TABLE>
<CAPTION>
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
- -------------------- -------- ----------- ----- ------------------- ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
920 SALARIES AND WAGES $264,259 $15,217 $279,476 $ 6,690 $ 159 $ 6,849 $270,949 $ 15,376 $286,325
921 OFFICE SUPPLIES & EXPENSES 85,121 9,678 94,799 6,223 290 6,513 91,344 9,968 101,312
922 ADMINISTRATIVE EXP.
TRANSFERRED-CREDIT - - - - - - - - -
923 OUTSIDE SERVICES EMPLOYED 155,878 7,145 163,023 10,596 90 10,686 166,474 7,235 173,709
924 PROPERTY INSURANCE 348 202 550 158 6 164 506 208 714
925 INJURIES AND DAMAGES 23 61 84 - 2 2 23 63 86
926 EMPLOYEE PENSIONS
& BENEFITS 6,549 19,256 25,805 - 486 486 6,549 19,742 26,291
928 REGULATORY COMMISSION
EXPENSE 123 - 123 - - - 123 - 123
930.1 GENERAL ADVERTISING
EXPENSES 15,615 - 15,615 - - - 15,615 - 15,615
930.2 MISCELLANEOUS GENERAL
EXPENSES (23,759) 55,033 31,274 5,388 1,165 6,553 (18,371) 56,198 37,827
931 RENTS 65,375 11,267 76,642 89 59 148 65,464 11,326 76,790
932 MAINTENANCE OF STRUCTURES
AND EQUIPMENT 26,119 2,347 28,466 870 15 885 26,989 2,362 29,351
403 DEPRECIATION & AMORTIZATION
EXPENSE 17,703 4,146 21,849 33 29 62 17,736 4,175 21,911
408 TAXES OTHER THAN INCOME
TAXES 4,462 14,377 18,839 - 384 384 4,462 14,761 19,223
409 INCOME TAXES 295 5 300 - - - 295 5 300
410 PROVISION FOR DEFERRED
INCOME TAXES - - - - - - - - -
411 PROVISION FOR DEFERRED
INCOME TAXES CREDIT - - - - - - - - -
411.5 INVESTMENT TAX CREDIT - - - - - - - - -
426.1 DONATIONS 775 769 1,544 - - - 775 769 1,544
-------- ---------- ----------- ------ ------- ----------- ----------- --------- --------
SUBTOTAL EXPENSES = 618,886 139,503 758,389 30,047 2,685 32,732 648,933 142,188 791,121
</TABLE>
<PAGE>
21A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
SCHEDULE XVI
ANALYSIS OF CHARGES FOR SERVICE
ASSOCIATE AND NONASSOCIATE COMPANIES
<TABLE>
<CAPTION>
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
- -------------------- -------- -------- ----- ------- -------- ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
427 INTEREST ON LONG-TERM DEBT - - 4,031 - - 55 - - 4,086
430 INTEREST ON DEBT TO
ASSOCIATE COMPANIES - - 2,320 - - 32 - - 2,352
431 OTHER INTEREST EXPENSE - - 1,169 - - 16 - - 1,185
--------- --------- --------- -------- ------ -------- --------- -------- ----------
TOTAL EXPENSES = 618,886 139,503 765,909 30,047 2,685 32,835 648,933 142,188 798,744
421 MISCELLANEOUS GAIN (15,692) - (15,692) - - - (15,692) - (15,692)
-------- --------- ---------- -------- ------ -------- -------- -------- ----------
TOTAL COST OF SERVICE = $603,194 $139,503 $750,217 $30,047 $2,685 $32,835 $633,241 $142,188 $783,052
======== ======== ======== ======= ====== ======= ======== ======== ========
</TABLE>
<PAGE>
22
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
SCHEDULE XVII
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
INSTRUCTION: Indicate each department or service function. (See Instruction 01-3
General Structure of Accounting System: Uniform System Account)
DEPARTMENT OR SERVICE FUNCTION
<TABLE>
<CAPTION>
Finance Human
Total and Governmental Resources and Information
DESCRIPTION OF ITEMS Amount Engineering Executive Accounting Affairs Administration Resources
<S> <C> <C> <C> <C> <C> <C> <C>
920 SALARIES AND WAGES $286,325 $65,692 $ 8,101 $19,107 $ 1,317 $22,490 $ 73,090
921 OFFICE SUPPLIES AND EXPENSES 101,312 11,752 3,189 4,595 826 6,744 49,280
922 ADMINISTRATIVE EXP. TRANSFERRED CR. - - - - - - -
923 OUTSIDE SERVICES EMPLOYED 173,709 42,620 11,692 6,410 709 10,648 32,077
924 PROPERTY INSURANCE 714 63 3 17 1 22 82
925 INJURIES AND DAMAGES 86 20 1 5 - 6 26
926 EMPLOYEE PENSIONS & BENEFITS 26,291 5,295 455 1,543 85 1,895 6,429
928 REGULATORY COMMISSION EXPENSE 123 - - - - - -
930.1 GENERAL ADVERTISING EXPENSES 15,615 - - - - - -
930.2 MISCELLANEOUS GENERAL EXPENSES 37,827 1,958 3,135 424 452 3,572 11,573
931 RENTS 76,790 2,916 1,159 1,334 34 1,872 58,683
932 MAINTENANCE OF STRUCTURES & EQUIP 29,351 1,441 224 111 14 487 18,162
403 DEPRECIATION & AMORTIZATION,
EXPENSE 21,911 1,519 786 482 38 478 8,684
408 TAXES OTHER THAN INCOME TAXES 19,223 4,734 284 1,164 55 1,491 5,625
409 INCOME TAXES 300 - - - - - -
410 PROVISION FOR DEFERRED INCOME TAXES - - - - - - -
411 PROVISION FOR DEFERRED INCOME
TAXES - CREDIT - - - - - - -
426.1 DONATIONS 1,544 1 356 - 340 41 -
427 INTEREST ON LONG-TERM DEBT 4,086 248 398 450 1 403 1,589
430 INTEREST ON DEBT TO ASSOCIATE CO. 2,352 174 40 45 7 65 685
431 OTHER INTEREST EXPENSE 1,185 79 20 20 3 29 324
--------- ---------- ------- -------- ------ ------- --------
TOTAL EXPENSES 798,744 138,512 29,843 35,707 3,882 50,243 266,309
421 MISCELLANEOUS LOSS (15,692) (4,687) (712) (851) (93) (1,198) (1,040)
-------- ---------- -------- ------- ------ ------- --------
TOTAL COSTS $783,052 $133,825 $29,131 $34,856 $3,789 $49,045 $265,269
======== ======== ======= ======= ====== ======= ========
</TABLE>
<PAGE>
22A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
-------------------------------
For the Year Ended December 31, 1999
-----------------
(Thousands of Dollars)
SCHEDULE XVII (CONTINUED)
SCHEDULE OF EXPENSE DISTRIBUTION BY
DEPARTMENT OR SERVICE FUNCTION
DEPARTMENT OR SERVICE FUNCTION
<TABLE>
<CAPTION>
Planning Research and
ACCOUNT Internal Market Research Public Environmental System Administrative External
NUMBER Audit and Support Production Relations Affairs Aircraft and General Affairs
- ------- -------- ---------------- ---------- --------- ------------- -------- ------------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
920 $6,624 $11,437 $46,666 $ 2,600 $ 8,756 $3,484 $ 9,317 $ 7,644
921 1,317 1,588 7,856 1,835 6,672 1,307 2,100 2,251
922 - - - - - - - -
923 1,142 14,965 7,608 2,149 31,161 166 (11,545) 23,907
924 6 13 39 2 166 4 291 5
925 2 4 11 1 2 1 5 2
926 568 1,036 3,721 209 680 323 3,527 525
928 - - - - - - 123 -
930.1 - - - 15,615 - - - -
930.2 911 990 1,232 2,406 685 111 8,233 2,145
931 420 799 2,537 260 155 674 5,349 598
932 51 142 1,514 21 89 5,516 1,544 35
403 83 617 6,607 160 97 1,926 229 205
408 446 818 2,915 173 580 255 319 364
409 - - - - - - 300 -
410 - - - - - - - -
411 - - - - - - - -
426.1 - - 27 563 - - 135 81
427 68 164 278 95 - (6) 163 235
430 12 60 575 37 20 592 - 40
431 6 28 261 17 8 267 105 18
----------- ------- ------- ------- ------- ------- ------- -------
Expenses 11,656 32,661 81,847 26,143 49,071 14,620 20,195 38,055
421 (278) (778) (2,034) (623) (1,660) (349) (482) (907)
--------- ------- ------- ------- ------- ------- ------- -------
TOTAL COSTS $11,378 $31,883 $79,813 $25,520 $47,411 $14,271 $19,713 $37,148
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
23
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(Thousands of Dollars)
DEPARTMENTAL ANALYSIS OF SALARIES
ACCOUNT 920
<TABLE>
<CAPTION>
DEPARTMENTAL SALARY EXPENSE
--------------------------------------------------
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
------ ------- ---------- ---------- ------
<S> <C> <C> <C> <C> <C>
Engineering 65,692 32 64,956 704 678
Executive 8,101 752 6,719 630 13
Finance & Accounting 19,107 1,924 16,676 507 184
Governmental Affairs 1,317 25 1,292 - 13
Human Resources & Admin. 22,490 13 22,458 19 263
Information Resources 73,090 77 72,855 158 1,132
Internal Auditing 6,624 479 6,145 - 67
Planning Marketing
Research & Support 11,437 406 11,031 - 71
Production 46,666 15 46,379 272 625
Public Relations 2,600 996 1,604 - 36
Research & Environmental
Affairs 8,756 3 4,619 4,134 97
System Aircraft 3,484 - 3,484 - 53
External Affairs 7,644 482 7,094 68 68
Administrative & General 9,317 228 9,089 - -
------- ----- ------- ----- ---
TOTAL 286,325 5,432 274,401 6,492 3,300
======= ===== ======= ===== =====
</TABLE>
<PAGE>
24
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
Legal Services
Akin, Gump, Strauss,
Hauer & Feld Legal Services NA 129
Balch & Bingham Legal Services NA 3,599
Dorsey & Whitney Legal Services NA 213
Edison Electric Institute Legal Services NA 162
Hopping, Green, Sams
& Smith Legal Services NA 120
Hunton & Williams Legal Services NA 265
Jones, Day, Reavis & Pogue Legal Services NA 269
McDermott, Will & Emery Legal Services NA 375
Ryan, Phillips, Utrecht
& Mackinnon Legal Services NA 121
Shearman & Sterling Legal Services NA 115
Troutman, Sanders Legal Services NA 6,487
Twenty-Six Other Items Less
than $100,000 NA 481
------
Subtotal - Legal Services 12,336
------
Auditing Service
Arthur Andersen LLP Audit Services NA 1,393
One Other Items Less
than $100,000 NA 25
------
Subtotal - Auditing Services 1,418
------
(Continued on Page 24A)
<PAGE>
24A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
<TABLE>
<CAPTION>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
Engineering Services
<S> <C> <C> <C>
ABB C-E Services, Inc. Contract Engineering Serv. NA 211
Atlanta Technical Support Contract Engineering Serv. NA 822
BE&K Engineering Co. Contract Engineering Serv. NA 15,382
Bechtel Power Corp. Contract Engineers-Constructors NA 5,597
The Babcock & Wilcox Co. Contract Engineering Serv. NA 112
Foster Wheeler Develop-
ment Corp. Power Systems Development-DOE NA 188
Foster Wheeler USA Corp. Power Systems Development-DOE NA 187
GECOH Exploration, Inc. Contract Engineering Serv. NA 203
HDR, Inc. Contract Engineering Serv. NA 129
Industrial Services
of Alabama, Inc. Contract Engineering Serv. NA 273
PB Power Ltd., Merz &
McLellan Contract Engineering Serv. NA 234
The M.W. Kellogg Co. Contract Engineering Serv. NA 520
NWL Contract Engineering Serv. NA 136
Shelby Steel-Vincent, Inc. Contract Engineering Serv. NA 148
Siemens Westinghouse
Power Corp. Contract Engineering Serv. NA 430
Southern Research Institute Power Systems Development-DOE NA 1,008
Ninety-One Other Items
Less than $100,000 1,578
-------
Subtotal - Engineering Services 27,158
-------
</TABLE>
(Continued on Page 24B)
<PAGE>
24B
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
<TABLE>
<CAPTION>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
Other Services
<S> <C> <C> <C>
ADECCO Services Temporary Services NA 4,427
Alabama Power Company Consulting Services A 12,244
Alpha-Omega Power
Technologies Consulting Services NA 165
Alstom ESCA Corp. Information Technology Services NA 130
Andersen Consulting LLP Consulting Services NA 6,657
Ann Randazzo Consulting Services NA 102
Aon Consulting Consulting Services NA 212
Argenbright Security, Inc. Security Services NA 200
Arthur Andersen LLP Consulting Services NA 601
Atlantic Technologies, LTD Consulting Services NA 128
Atmospheric Research &
Analysis, Inc. Consulting Services NA 629
Barbour, Griffith & Rogers Consulting Services NA 228
Billy Andrade Sports Marketing NA 300
Blankenship & Seay
Consulting Consulting Services NA 239
C&LAN Technology, Inc. Information Technology Services NA 127
Caddell Construction Co. Erection Services NA 1,609
Cauthen & Associates Consulting Services NA 471
CDA Investment Technologies,
Inc. Consulting Services NA 113
Charles Rose Consultants Coal Assessment Services NA 134
Chicago Interface Group Consulting Services NA 247
Clarkston Potomac Group,Inc. Consulting Services NA 285
Compass America, Inc. Consulting Services NA 103
Comprehensive Computer
Consulting Consulting Services NA 12,209
Configured Energy Systems,
Inc. Software Consulting Services NA 166
Consumermetrics, Inc. Consulting Services NA 581
Custom Contract Programming Contract Programming NA 229
Decision Strategies/Fairfax
International Consulting Services NA 333
Decisionone Consulting Services NA 142
Deloitte & Touche LLP Consulting Services NA 586
(Continued on page 24C)
</TABLE>
<PAGE>
24C
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
<TABLE>
<CAPTION>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
<S> <C> <C> <C>
Dependable PC Consulting Consulting Services NA 104
DNA Communications LLC Consulting Services NA 176
Docucorp International Programming Services NA 781
Doozer Software, Inc. Software Consulting Services NA 169
Duff & Phelps Credit
Rating Company Financial Services NA 104
Dun & Bradstreet Marketing Services NA 398
Electric Power Research
Institute Research and Development NA 2,732
Elrick & Lavidge, Inc. Survey Services NA 245
Empower Corporation Consulting Services NA 116
Energy Files Consulting Services NA 126
Engineering Planning &
Management, Inc. Software Consulting Services NA 107
Equifax Credit Info. Serv. Credit Information Services NA 656
Ernst & Young Consulting Services NA 116
Fuelcell Energy, Inc. Research Services NA 500
GE Harris Energy Systems Energy Management Services NA 592
Georgia Power Company Project Support A 8,081
Gulf Power Company Project Support A 990
Hagler Bailly Consulting,
Inc. Consulting Services NA 163
Hawthorn Group Consulting Services NA 3,779
Henwood Energy Serv.,Inc. Consulting Services NA 111
Hewitt Associates Personnel Services NA 5,301
Hogan & Hartson Consulting Services NA 110
Intellinet Information Technology Services NA 145
International Bus. Machine Consulting Services NA 7,988
J. P. Morgan Securities,Inc. Financial Services NA 340
Jordan Jones & Goulding,Inc. Consulting Services NA 185
Keith Bissell Consulting Services NA 146
Keppler Associates, Inc. Consulting Services NA 105
Ketchum Public Relations,
Inc. Public Relations Services NA 238
Lehman Brothers Financial Services NA 174
</TABLE>
(Continued on page 24D)
<PAGE>
24D
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
<TABLE>
<CAPTION>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
<S> <C> <C> <C>
Lukens Consulting Group,Inc. Consulting Services NA 230
Magi-Ware, Inc. Programming Services NA 130
Market Strategies, Inc. Marketing Services NA 213
Marketing & Planning Sys System Development NA 876
Marketpro Marketing Services NA 306
Matrix Resources, Inc. Consulting Services NA 250
Mellon Equity Associates,LLP Financial Services NA 166
Merrill Consultants Financial Services NA 224
Merrill Lynch Trust Co. Financial Services NA 1,527
Metamor Information Tech. Information Technology Services NA 488
Metro Atlanta Host
Committee, Inc. Sports Marketing NA 300
Microsoft Enterprise Serv Consulting Resources NA 233
Moody's Investor Services Financial Services NA 223
Morgan Stanley & Co., Inc. Financial Services NA 127
Nature Conservancy Environmental Studies NA 130
New York Stock Exchange,
Inc. Financial Services NA 404
Outlook Policy Forum, Inc. Consulting Services NA 4,991
Paine Webber Consulting Services NA 400
Peoplesoft, Inc. Software Consulting Services NA 161
Performance Contractors,
Inc. Personnel Services NA 179
PGI-Atlanta Consulting Services NA 703
Platinum Technology Software Consulting Services NA 135
Power Policy Group Consulting Services NA 300
Pricewaterhouse, Coopers,LLP Software Consulting Services NA 501
Pro Staff Personnel Services NA 190
Professional Diversified
Service Consulting Services NA 285
Rebis Software Software Consulting Services NA 115
Regional Economic
Research Consulting Services NA 376
Renaissance Worldwide
IT Consulting, Inc. Consulting Services NA 239
</TABLE>
(Continued on page 24E)
<PAGE>
24E
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
<TABLE>
<CAPTION>
RELATIONSHIP
"A"=ASSOCIATE
DESCRIPTION OF "NA"= NON
FROM WHOM PURCHASED LARGEST INVOICE ASSOCIATE AMOUNT
- ------------------- --------------- ------------- ------
<S> <C> <C> <C>
Resource Data International Consulting Services NA 121
Richmark Group, Inc. Marketing Services NA 241
Robert Cobb Consulting Services NA 100
Salomon Smith Barney Financial Services NA 345
Sanders Morris Mundy Consulting Services NA 325
Sanford V. Berg, PH.D. Consulting Services NA 130
Savannah Electric &
Power Co. Project Support A 140
Science Applications
International Information Technology Services NA 389
Scott, Madden & Assoc., Inc. Consulting Services NA 2,523
Shepardson Stern & Kaminsky Marketing Services NA 498
Shoreline Utility Advisors Consulting Services NA 125
Smith-Free Group Consulting Services NA 136
Software Spectrum Software Upgrade Services NA 321
Southern Company
Energy Solutions, Inc. Project Support A 359
Southern Energy
Constructors Inc. Erection Services NA 11,748
Southern Nuclear Project Support A 370
Southern Research Institute Consulting Services NA 496
SPEC Group Holdings, Inc. Personnel Services NA 1,528
Sprint Paranet, Inc. Contract Programming NA 1,158
Standard & Poor's Corp. Financial Services NA 138
Sunbelt Builders, Inc. Erection Services NA 265
Systems Applications Intl Consulting Services NA 441
TATA Consultancy Services Systems Support NA 1,786
Tech Providers, Inc. Personnel Services NA 288
Teksystems Information Technology Services NA 505
Thermafiber Research Services NA 200
Towers Perrin Survey Services NA 314
TQS Research, Inc. Market Research Studies NA 118
Witness Systems, Inc. Consulting Services NA 303
Z Group, LLC Consulting Services NA 210
1,550 Other Items Less Than $100,000 NA 14,399
-------
Subtotal - Other Services 132,797
-------
TOTAL 173,709
=======
</TABLE>
<PAGE>
25
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 $ (2,187)
Early Retirement Benefits 1,004
Flexible Credit Benefits - Company Contributions 10,912
Post Retirement Medical Benefits 5,748
Post Retirement Life Benefits 2,568
Educational Assistance Plan 159
Minority Scholarship Program 14
Employee Savings Plan/ESOP - Company Contribution 7,610
Employee Health and Physical Examinations 72
Other (Employees' Professional Fees and
Other Employee Fringe Benefits) 391
-------
TOTAL $26,291
=======
<PAGE>
26
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
In the past, advertising expenses were paid directly by the Southern Company. In
1999, however, Southern Company Services began to reflect these expenses on its
books. While these costs are billed to the holding company, the change was made
to recognize the Service Company's role in managing these expenses and to add
efficiency to the operations of the company. 1999 advertising expenses are as
follows:
DESCRIPTION NAME OF PAYEE AMOUNT
- ----------- ------------- ------
Corporate Branding American Broadcasting Company $ 108
Direct Mailing Bennett Kuhn Varner, Inc. 74
Corporate Branding Laser & Lighting Design 24
Corporate Branding Market Strategies, Inc. 68
Sports Marketing PGA Tour, Inc. 88
Corporate Branding Shepardson, Stern & Kaminsky 15,230
All other Items 23
-------
TOTAL $15,615
=======
<PAGE>
27
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 4,193
Expenses of SCS Employees Located at Operating Co. 21,271
Meals, Lodging, & Incidentals Related to
Meetings & Conferences 3,973
Dues and Memberships 1,779
Recruiting, Interviewing, & Placement
of Employees 254
Other General Expenses 6,357
------
TOTAL 37,827
======
<PAGE>
28
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 $21,457
Computer and Other Data Processing Equipment Rental 46,914
Software Rental 4,044
Aircraft Rental 237
All Other (Automobile, Office Furniture & Equipment,
Miscellaneous Storage, Equipment Rental & Aircraft) 4,138
-------
TOTAL $76,790
=======
<PAGE>
29
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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
them 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 154
City/Business License Tax 5
Property and Other City and State 1,120
-------
Subtotal - Other 1,279
-------
U.S. Government Taxes
Federal Insurance Contributions Act 17,724
Federal Unemployment 220
-------
Subtotal - U.S. Government 17,944
-------
TOTAL 19,223
=======
<PAGE>
30
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- ----------------- ------------------- ------
American Academy in Berlin Civic & Charitable 60
American Cancer Society Civic & Charitable 4
Andrade/Faxon Charities for Children Civic & Charitable 9
Atlanta Chamber of Commerce Civic & Charitable 11
Atlanta Sports Council Civic & Charitable 13
Atlanta Tribute Civic & Charitable 15
Auburn University Civic & Charitable 10
Auburn University Foundation Educational Matching 11
Big Brothers/Big Sisters of Metro Atlanta Civic & Charitable 13
Birmingham Area Chamber of Commerce Civic & Charitable 11
Boy Scouts of America Civic & Charitable 8
Breast Cancer Detection Center of Alaska Civic & Charitable 13
Business Institute for Political Analysis Support of Program 5
Cahaba Girl Scouts Civic & Charitable 16
Callanwolde Fine Arts Center Civic & Charitable 5
CARE Civic & Charitable 10
Christmas in April Atlanta Civic & Charitable 5
Committee for Economic & Cultural Dev. Civic & Charitable 5
Democratic Congressional Campaign
Committee Building Fund Support of Program 35
Democratic Leadership Council Support of Program 10
Democratic National Committee
Building Fund Support of Program 25
Democratic Senatorial Campaign
Committee Building Fund Support of Program 30
Economic Forecasting Center Civic & Charitable 4
Eisenhower Center Building Fund Support of Program 42
Florida Citizens for a Sound Economy Civic & Charitable 5
Fort Bend CASA Civic & Charitable 6
FUQUA MBA Games Civic & Charitable 4
Georgia Business Forum, Inc. Civic & Charitable 4
Georgia Institute of Technology Educational Matching 18
Georgia State University Educational Matching 4
Georgia State University Educational
Foundation, Inc. Civic & Charitable 100
Georgia Tech Foundation, Inc. Civic & Charitable 10
Georgia Youth Science & Technology
Center Civic & Charitable 15
Gresham Middle School Civic & Charitable 6
Hank Aaron Chasing the Dream Foundation Civic & Charitable 5
Harvard University Civic & Charitable 10
Hawkshaw Lagoon Fund Civic & Charitable 5
Junior Achievement of Greater Birmingham Civic & Charitable 8
Kennedy Center Civic & Charitable 8
Lombardi Cancer Center Civic & Charitable 5
Lupus Foundation of America, Inc. Civic & Charitable 5
March of Dimes Birth Defects Civic & Charitable 11
<PAGE>
30A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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.
NAME OF RECIPIENT PURPOSE OF DONATION AMOUNT
- ----------------- ------------------- ------
National Alliance of Business Civic & Charitable 5
National Osteoporosis Foundation Civic & Charitable 10
National Race for the Cure Civic & Charitable 5
National Republican Congressional
Committee Building Fund Support of Program 75
National Republican Senatorial
Committee Building Fund Support of Program 55
National Society of Black Engineers Civic & Charitable 5
Opportunity XXI Civic & Charitable 10
Prevent Blindness Georgia Civic & Charitable 5
Republican Party of Kentucky Building Fund Support of Program 10
Resources for the Future Civic & Charitable 25
Samford University Educational Matching 4
Southeastern Legal Foundation, Inc. Civic & Charitable 25
Taste of the South Support of Program 23
Tennessee Technological University Civic & Charitable 3
Texas Citizens for a Sound Economy Civic & Charitable 5
The Arby's Foundation Civic & Charitable 5
The Carter Center Civic & Charitable 89
The Jefferson Islands Club Support of Program 5
The National Coal Council Support of Program 11
The Nature Conservancy Civic & Charitable 15
The Presidents Cup Civic & Charitable 18
The University of Alabama at Birmingham Civic & Charitable 4
United States Asia Foundation Civic & Charitable 25
United States Energy Association Support of Program 3
United Way of Central Birmingham Civic & Charitable 122
United Way of Metropolitan Atlanta Civic & Charitable 250
University of Alabama Educational Matching 11
University of Chicago Civic & Charitable 4
Utility Business Education Coalition Civic & Charitable 5
60 Other Items (Less than $3,000) Civic & Charitable 69
76 Other Items (Less than $3,000) Employee Matching Gift 40
2 Other Items (Less than $3,000) Support of Program 4
-----
TOTAL 1,544
=====
<PAGE>
31
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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>
32
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(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 Page 17
<PAGE>
33
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
(Thousands of Dollars)
SCHEDULE XIX
FINANCIAL DATA SCHEDULE
Net Service Company Property 133,033
Total Investments 1,936
Total Current and Accrued Assets 165,299
Total Deferred Debits 11,832
Balancing Amount for Total Assets and Other Debits -
Total Assets and Other Debits 312,100
Total Proprietary Capital 875
Total Long-Term Debt 47,068
Notes Payable 6,532
Notes Payable to Associate Companies 17,000
Balancing Amount for Total Current and Accrued
Liabilities 137,308
Total Deferred Credits 103,317
Accumulated Deferred Income Tax Credits -
Total Liabilities and Proprietary Capital 312,100
Services Rendered to Associate Companies 750,217
Services Rendered to Nonassociate Companies 32,835
Miscellaneous Income or Loss 15,692
Total Income 798,744
Salaries and Wages 286,325
Employee Pensions and Benefits 26,291
Balancing Amount for Total Expenses 486,128
Total Expenses 798,744
Net Income (Loss) -
Total Cost of Service (Direct Costs) 633,241
Total Cost of Service (Indirect Costs) 142,188
Total Cost of Service (Total) 783,052
Number of Personnel End of Year 3,300
<PAGE>
34
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
ORGANIZATION CHART
Chairman and Chief Executive Officer
Southern Company
<TABLE>
<CAPTION>
President
& Chief
Operating
Officer -
Southern Co.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sr. VP- Sr. VP- Sr. VP- President Sr. VP- Exec. VP- Sr. VP- Director Exec. VP Sr. VP &
Transmission Chief Comp- Southern Co. Human Chief External Internal Finance, General
Planning & Info. troller Genera- Resources Marketing Affairs Auditing Treasurer Counsel(2)
Operations Officer & CFO tion(1) (2) Officer(2) (2) (2) (2)
(1) (1) (1)
Exec. VP VP Market- VP Corp. VP-Financial VP-Corp.
Engineer- ing & New Communica- Planning & Secretary
ing Business tion Analysis & General
Development Counsel
VP Research VP Govern- Treasurer
Environ- mental
mental Affairs
Affairs
VP Procure- VP Environ- Director
ment & mental Trust
Materials Affairs Finance
VP Southern Director
Wholesale Risk
Energy Management
VP Genera-
tion Plan-
ning & Dev.
VP Fuel
Services
VPs Senior
Production
Officers
(5 Positions)
</TABLE>
(1) Direct reports to President & COO of Southern Company.
(2) Direct reports to Chairman, President & CEO of Southern Company.
<PAGE>
35
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
METHODS OF ALLOCATION
SCS uses statistics based on a single year with a one-year lag; therefore, 1999
allocations were based on 1997 statistics.
1. Annual Operating Area Territorial Load Basis
Each Client Operating Company, other than Southern Electric
Generating Company (SEGCO), was 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 Southern Company, defined as
total energy generated plus energy received minus energy delivered.
2. Customer Basis
Each Client Operating Company, other than SEGCO, was 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 Southern Company, other than SEGCO.
3. Employee Basis
Each Client Company, other than SEGCO, was charged that percentage
of the total Service Company charges to be distributed by this
method which its number of employees is of the total number of
employees of all Client Companies, other than SEGCO. Employee groups
not benefiting from the services are not included in the allocation.
4. Direct Billing Basis
Each Client Company was 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.
5. Financial Basis
Each Client Company was 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 Southern
Company.
In 1999, Southern Company Services began using versions of the
Financial Basis that recognized only domestic statistics. The
existing versions, based on worldwide statistics, continued to be
used as appropriate.
<PAGE>
35A
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
METHODS OF ALLOCATION
6. Fossil Fuel Generation Basis
Each Client Operating Company was 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 Southern Company.
7. Fossil and Hydro Capacity Basis
Each Client Company was 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 Southern Company.
8. Fossil Capacity Basis
Each Client Company was charged the factor determined by dividing
the total fossil generating capacity for each company, including
capacity attributed to joint owners of system plants, by the total
fossil generating capacity for Southern Company.
9. Insurance Premium Basis
Each Client Company was 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 Southern Company.
10. Number of Vehicles Basis
Each Client Company was 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 Southern Company.
11. Salary Basis
Each client company was charged that percentage of the total Service
Company charges to be distributed by this method which its amount of
historical SCS billed labor is to the total SCS billed historical
labor of all applicable companies. In addition, overhead charges are
allocated to the applicable companies based on actual labor charges
in the current period.
12. Southern System Basis (Capitalization)
---------------------
Each Client Company was charged for the charges to be distributed by
this method in the ratio of such Client Company's total domestic
capitalization to the sum of the total domestic capitalization of
all Client Companies.
<PAGE>
35B
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
METHODS OF ALLOCATION
13. Personal Computers Basis
Each Client Company was charged that percentage of the total Service
Company charges to be distributed by this method which its number of
PCs is to the total PCs for Southern Company.
14. Number of Officers and Directors
Each Client Company was charged that percentage of the total Service
Company charges to be distributed by this method which its number of
defined officers and directors is to the total for Southern Company.
15. Market-Based Equity
Each Client Company was charged in the ratio of such company's total
book equity, adjusted to fair market value, to the sum of the total
market-based equity of all Client Companies.
16. System Aircraft
Passengers on system aircraft were 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 were allocated to all associate companies as an
availability fee based on the number of executives at each company.
<PAGE>
36
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
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 1999:
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 1999, 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 4.87192% to 5.76702%. Interest in
the amount of $2,351,924.90 was accrued on The Southern Company borrowings and
was billed to the client companies.
As of December 31, 1999, Southern Company Services had long-term debt
outstanding from various institutions in the amount of $53,600,000.00. The
interest rates on these borrowings ranged from 7.25% to 13.0%. Interest of
$4,085,954.05 was accrued and billed to the client companies.
In addition, during 1999, Southern Company Services incurred other interest of
$257,345.09 related to the Deferred Compensation Plan and $924,329.20 related to
Transmission Access deposits.
All interest was billed 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 $ 317,362.39
Alabama Power Company 2,137,628.71
Georgia Power Company 2,699,827.93
Gulf Power Company 411,190.56
Mississippi Power Company 454,009.44
Savannah Electric & Power Company 180,471.43
Southern Electric Generating Company 32,349.96
Southern Energy, Inc. 236,145.80
Southern Nuclear Operating Company, Inc. 836,586.27
Southern Company Energy Solutions, Inc. 119,826.74
Southern Communications Services, Inc. 70,489.55
Southern Electric Railroad Company 6,868.66
Southern Telecom Inc. 16,756.84
Nonassociate 103,226.40
-------------
$7,622,740.68
<PAGE>
37
ANNUAL REPORT OF SOUTHERN COMPANY SERVICES, INC.
For the Year Ended December 31, 1999
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)
W. Dean Hudson, Senior Vice President, Comptroller
and Chief Financial Officer
(Printed Name and Title of Signing Officer)
Date: April 27, 2000
--------------------
